New sales model on tap: exec

The days of selling software through the traditional commercial model are numbered, as open source is becoming the paradigm of choice, said Greg Stein, chairman of the Apache Software Foundation, at the EclipseCon 2006 conference last month.

Software is becoming increasingly commoditized, Stein said during his keynote presentation, and more of it is available free and it is easy to get. He cited the OpenOffice office automation package as an example of free software to replace Microsoft Office.

“As the [open source] stack grows and grows and takes over more areas, there’s less money available in packaged products. All of your software [will be] free. It means that over time, you aren’t going to be paying for software anymore” but will instead pay for assistance with it, Stein said.

He estimated that in five to 10 years, most software used today will be free. “The notion of packaged product is really going to kind of go away,” Stein said. Eventually, a free software project will overtake a commercial effort in functionality; there are almost always more developers in the open source community, Stein said.

Making money in software will involve selling assistance services for functions such as: installation, configuration, maintenance, upgrading, testing and customization, Stein said. Basic software components themselves will be free. “As our systems grow more and more complex, more and more assistance is necessary,” he said.

An audience member was not entirely willing to concede the software market to open source. “I think there’s always going to b a spot for commercial, closed source for specialized tasks, but the base infrastructure will be more open source or easily available,” said Danny D’Amours, computer systems officer at the National Research Council.

Commercial, closed source software will not go away “because there’s so many small niches that people will be able to exploit or be able to make commercial solutions off of,” D’Amours said. In other parts of his presentation, Stein discussed the evolution of software licensing and compared Apache to Eclipse.

“A license can ruin a perfectly good piece of software,” Stein said, borrowing a quote from participant Jon Stevens.

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