Open source is a sales model

"The way to profit is to sell in a cost effective way. Capital efficiency is king," Soward says. By offering free downloads and a GPL license, Adaptive Planning cuts its sales costs to the bone and can address parts of the middle market other firms can't touch.

Bill Soward, the visionary CEO at Adaptive Planning, has something important to say about open source. (The image is from a

German production of the Arthur Miller play, Death of a Salesman.)

It's not a business model. The business model, he insists, is software-as-a-service, or SaaS. Open source is merely an efficient sales method for that business model, which now works for client applications, not just hosted offerings like Salesforce.com.

"The way to profit is to sell in a cost effective way. Capital efficiency is king," Soward says. By offering free downloads and a GPL license, Adaptive Planning cuts its sales costs to the bone and can address parts of the middle market other firms can't touch.

"We don't have outside people. We don't make sales calls. We do everything over the phone and remotely." While most open source firms look at open licenses as lowering their R&D costs, it's this lower sales cost Soward believes is the real story.

"We have over 7,500 downloads in 60 countries, we're #28 at Sourceforge, so it is clear the demand is there." And one more thing. Since adding optional registration to downloads, Soward has found more than half of his prospects now have finance titles.

"The concept of downloading at Sourceforge has moved from the IT guy to businesspeople who do it themselves. To the extent that the Sourceforge channel broadens it's a whole new ball game."

One without a place for Willy Loman.