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Are You "OSS-SOL" or "OSS-OK"?

By Henry W. (Hank) Jones, III, Intersect Technology Consulting -and- Law Office of Henry W. Jones, III

The New "Battle-Preparedness" Requirement:
Open Source Challenges For Software Sales Teams

Your road-tested, career-long plans for selling no longer provide an adequate playbook. The old rules for selling software don't govern the entire game anymore. Do you have a "General Public License ["GPL"] defense"? Has your squad huddled about the impacts on your quota and value proposition of the Free Software Foundation and the Open Source Initiative? Have you gotten down and dirty in the field banging heads with customers about "freeware""? It's time for your team to improve your performance of the sport of modern-day software sales. If you're a v.c. or other investor, there are new questions for smart "team ownership" and for hiring, assessing, assisting, and even firing coaches.

Over seven months ago, the cover story of CIO magazine said "The CIO who doesn't have an open source software plan implemented in 2003, will be paying too much for software in 2004." Way back in the springtime, the emergence of Linux and other open source was the cover story of Business Week. What have you done about it?

What has your sales team gone about OSS? How has your sales training been modified to adapt to OSS? How have your company's products, pricing, licensing terms, marketing messages, and other habits and tools changed?

If your prospects think that they can "get it for free" (rightly or wrongly), why should they marry up with you? What will you be forced to do about OSS to survive and hopefully thrive?

You don't have a choice. In the last year, your customers and prospects have been adjusting their perspectives on budgeting, i.t. spend ROI, and supplier choices. So have senior executives and boards of directors C the decision-makers who control funding for new software, upgrades, and even studies to consider new i.t. expenditures.

So, what have you and your sales team done so far, to adapt promptly to the accelerating, broadening OSS revolution and its multiple impacts? Where is OSS in the agenda of your next sales meeting? What is your "OSS action plan" for the remainder of 2003? What are your specific plans, their timing, and their interdependencies during Q4 of '03?

This is the first of a planned series of articles addressing why you should, and how you can, adapt to OSS. This installment covers the why's, who's, and when's of the new OSS threats to enterprise and other software sales. A second article, to appear in a later issue of The Sterling Report, will lay out more detailed suggested solutions - recommended how-to's for coping with the new software world order.

So What's The Big New Deal About Open Source?

What, me worry? If my company claims proprietary technology inside our products, can't I laugh off those freeware geeks? My R&D people would never cut a corner C download third-party code from the Web and then bake that into our products that I sell C right? Must I really consider OSS as a relevant management issue, or a threat, if my company has solid products, management, funding, customers, prospects, marketing, and tech support? I have years of software sales experience, do I really need to reassess the adequacy of my software-related skills and prospects?

Savvy sales executives and teams have already modified their training, messaging, and contracts to cope with the new reality of OSS. And technology vendors have modified their strategies, product offerings, license terms, and value propositions, to adapt to the new "free code" paradigm. Why?

1. OSS Is A New Challenge In Sales Calls

If you're part of a true "A Team," then your shop should be able to address right now, without hesitation or muddling, the questions below (and other questions that will appear in a later installment of this series). If you want to be part of a survivor, then consider whether every member of your sales team (and marketing, tech support, and other groups) is prepared to answer credibly and persuasively the new questions triggered by the "OSS inside" phenomenon.

Read each question below and imagine that you're meeting face-to-face now with the buying manager(s) of a key customer or prospect. If you haven't yet been confronted with these objections, worries, or requirements by customers or prospects, you will be soon.

  • "What exactly are the differences between "open source," "freeware," "copyleft," and "shareware" anyway?"

  • "Why did that industry executive say at a recent conference "now OSS just Linux and = LAMP and"? What does that mean, in our industry and to me?"

  • "Do your products include any OSS now?"

  • "If you say 'no', why are you so sure, when every programmer can download and bake in third-party code easily, including from home PCs?"

  • "Has any third party audited all your company's code and verified your individual understanding about this? When? What qualifications and expertise in OSS issues do they have? What were the results of the audit? Can we see it?"

  • "What written, specific policies, processes, and tools have been implemented inside your company to prevent leakage of OSS code into your product line?"

  • "If your answer is 'yes, we do have some OSS inside our product(s)" and an intellectual property problem arises with the OSS component(s), then you'll pay all our legal, internal, and other costs (i.e., fully indemnify us), right?"

  • "If your answer is 'yes, we do have some OSS inside our product(s)', how do I know that your company has complied with the GPL? Is the GPL code incorporated by 'static" or 'dynamic" linking in your products?"

  • "If your answer is 'yes, we do have some OSS inside our product(s)', how does any strict license for your upstream component(s) limit my company's modification, extension, or integration of your product C if we decide to buy from you?"

  • "If your answer is 'yes, we do have some OSS inside our product(s)', was it OSS with one of those more flexible types of OSS licenses? Which one(s)? BSD? Academic? Mozilla? Some variant? Will you please explain to me the differences between the restrictive and more permissive OSS licenses involved here?"

  • "If your answer is 'yes, we do have some OSS inside our product(s)', since your development cost is reduced as a result, by how much will you reduce your prior pricing?"

  • "How can I be confident regarding the quality of your products, once you've baked in OSS? Shouldn't I lose sleep, imagining my internal audit manager, CFO, Audit Committee to our Board of Directors, and 20/20 News chasing me?

  • "Will your competitors who incorporate OSS into their products consequently have reduced costs and be more competitive in the future, especially in the down economy?

  • "If your answer is 'no', why aren't you adopting OSS, to reduce your costs and my pricing?"

  • "How have you changed your customer license contract terms to address OSS components?"

  • "Has your company modified its H.R. policies within your product development organization, to help take advantage of OSS cost control and other benefits, and to attract and keep OSS-leaning techies? What have been your company's particular changes regarding hiring, training, performance evaluation, and moonlighting or side projects?"

  • "What's your company's position on the validity and future outcome of the SCO v. IBM litigation, now that SCO got a $50,000,000 investment in mid-October? How long will it last? Who will get subpoenaed to provide factual testimony or documents?"

  • "Is my company at risk of getting sued, if you incorporate OSS? If you say 'no', then why have other publicly traded tech vendors included such product-content litigation warnings in their recent S.E.C. filings?"

  • "Will you place some of your product code into an OSS model, to hopefully allow it have more support among tech folk, as have Netscape, RealNetworks, and others? If so, how? If not, why not?"

  • "What training activities has your company initiated inside, to adapt to OSS? Which modules have you personally completed?"

  • 2. OSS Changes The Rules Of Competition Among Vendors

    "It's hard to compete with free."

    As you should have heard by now, "freeware," "copyleft," and "open" code, applications, and tools bear no license fees. Yes, there are costs for planning, integration, and technical support included in any correct calculation of "total cost of ownership." But have your customers and prospects really forgotten that foul word, "free"?

    More tech vendors now feel and confess to the threat of open source alternatives. For example, the impacts and variety of OSS challenges increasingly are specified in risk disclosures to current and prospective shareholders in annual reports, quarterly reports, stock offering prospecti, and merger deal documents filed with the U.S. Securities and Exchange Commission.

    For example, what do you think was the number-one threat to profitability admitted by Microsoft in its October 15 prospectus, stated before a dozen other competitive, technology, litigation, and other pressures? Answer: open source.

    The same acknowledgement that "it's a new world" has surfaced in S.E.C. filings in recent weeks from Palm (10/14), Sun (9/29), Silicon Graphics (9/29), Caliddus Software (9/22), Provide Commerce (9/22), Oracle (9/18), Opsware (9/12), RealNetworks (9/12), NetIQ (9/9), and others. "OSS worries" are a clear, accelerating trend for traditional, proprietary-only vendors - both pure software companies and vendors of hardware, peripherals, and other technology products with software inside.


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