1.20.2008

free for consumers, sold to enterprise.

The internet, and attached economy, is more or less built on ad revenue supporting the idea that things should be free, accessible, and equal. I think this model works, to an extent, but I think the greater idea should tie back to one that has become popular in software, whether or not anyone discusses it.

Microsoft, and Adobe, as two basic examples, create software that is world-standard in what it does. It's also absurdly, and often prohibitively, expensive. If the big money is coming from enterprise sales, whether through licenses, or through packages that pro designers or artists buy, then the model is, to an extent, built on piracy, or extreme discounting.

In short, Microsoft got rich not off selling software at full price to home users, but instead offering it to equipment manufacturers dirt cheap, having it pirated, and then, as world standard, charging a ton for business users (who are easier to track and sue if they pirate it), and selling support, etc. Open Source software business works more or less the same way, they just remove any impediment to ubiquity, and say -go forth, adapt, improve, and if your company needs some experts, well, a whole industry has popped up to serve that need.

This is really, really obvious, but I needed to get it on the page before we can move on.

I think this is the model that will take internet based business somewhere special. You can see it already in the trendwatching/coolhunting/business intelligence industry that has, on many sites, developed a blog (free) / report (enterprise pricing) / support and consulting (enterprise pricing) stance. This serves the same purpose as people pirating Adobe products does. It creates respect and reputation for the product (or the ideas, or the advice, research, etc), and some level of ubiquity. With that achieved, enterprise customers can be convinced to pay handsomely (but reasonably considering what they get in return) for a more advanced, more targeted, more tailored version of the same.

This model can be adapted to most internet based business. The blog / report / consultant model, mentioned above, is just the only approach in which I can currently see this happening. I do think, however, that this model is the future of most things. Imagine free news and newspapers, delivered and ad-supported, with more in depth versions targeted to specific industries, sold at a premium, with the research appended.

To be continued.

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