Back when publishers were defined as people who bought ink by the barrel, I was taught what is known as the inverse square law of journalism.
A great big newspaper, with hundreds of pages, may cost a quarter. A magazine, smaller but still pretty big, may cost a few bucks. But a tiny little newsletter, maybe 8 mimeographed pages, might cost hundreds of dollars a year.
The reason we were given was the newspaper served millions, the magazines thousands, and the newsletter just tens of readers. The rarer the information, the smaller number of people in its market universe, the more you charged them.
This occurred to me while interviewing Ned Lilly of OpenMFG in Norfolk today. OpenMFG is "a full bore ERP manufacturing system. It has fully integrated financials, capacity planning, everything short of HR (human resources)."
Trouble is, OpenMFG is aiming at a fairly small universe of customers, small manufacturers without much money for IT. Yet to serve these people professionally, OpenMFG needs to extract great value from each customer. Lilly also knows the trend is toward an open source world.
So OpenMFG is the open source version of a gated community. "OpenMFG is built on open source pieces like postGRES, with Linux, Windows and Mac clients, but for the application itself it’s a source code license." Everyone pays to play, but "all customers and resellers get source code and we manage that community like an open source project."
The software is in its fourth major release, and his community is starting to give code back, but he's still got just a few dozen members. So Lilly goes to open source trade shows like OSBC, checks out the state of the art in licensing, and moves toward openess carefully, in what you'd call a calibrated manner.
"I would not be surprised to see us move further down that road, but I’m not hearing a clamor from our current customers and partners. They like our hybrid. It gives them all the functionality they need."
Open, but not too open.