Dennis Howlett recently wrote an aggressive post in his Irregular Enterprise blog.  According to him, the traditional software maintenance pricing model is dead.  Dennis is convinced that enterprises are rejecting this pricing model when they realize the incredibly high profit margins of proprietary software vendors.  Their operational margin is often close to 30%, and it obviously comes from maintenance services.  In parallel, the ability of user organizations to invest is reduced in the same proportions.  Dennis questions the long term interest of such a strategy.

As far as maintenance is concerned - as in many other domains - open source solutions vendors focus first on customer satisfaction. I can’t help thinking about this client of ours who, when asked to talk about product features for a case study, spoke first about the high quality of our technical support services - which was, according to him, the main reason why he gave up his proprietary solution to adopt our solutions.

To quote him: “Even as a user of Talend Open Studio - the free tool from Talend - we are getting high quality support. The vendor offers a Bugtracker on their web site, which helps us to track the process of reported bugs. The first reaction of Talend’s support operators when a problem is reported is to try and solve the problem, not to brush it under the rug with classical arguments too often heard (’you are the only one with this problem’ - sounds familiar?).”  This specific client is now building a connector that they will donate to the community.  This is not what I call give-take but win-win!

This simple example illustrates the richness and advantages of the open source model.  But let’s not be hypocrites: our ambition is to grow our business and improve our products.  But we will not do this against our users, or by not providing good service.  This is the difference pointed out by Dennis, whose views clearly go in the right direction.

As a conclusion I would also recommend reading this other post by Dennis, inspired by a Gartner case study that details the benefits Ikea Components got from a large Business Intelligence and Process Management project:

• Product availability: improved 30%
• Customer lead time: decreased 50%
• Customer claims: decreased 85%
• Inventory days: decreased 40%
• Order-handling costs: decreased 30%

But they still built an online help system that did not meet clients’ expectations…

I’ll close this post with Dennis’ conclusion: “Isn’t it a pity when companies that otherwise make great IT investments succeed in torpedoeing themselves by implementing something that is horribly flawed and detracts from the customer experience?”

Worth thinking about?

Bertrand