Open source price point

Just to amplify Joe's previous post on BEA's open source strategy, let me offer a Wal-Mart analogy. That may sound strange but bear with me. As the recent Frontline documentary on the retailer revealed, one of the secrets of Wal-Mart's extraordinary success is a little thing called the "opening price point." It's the unbeatable price one sees advertised on smiley face displays throughout the store. What you didn't realize, perhaps, is that OPP is a clever tool of seduction.

Yes, you can buy the shoes or the microwave at the advertised price. But chances are pretty good you'll wander around the department until you find a similar product that you like just a little more. You won't even notice that it costs 40% or 100% more than the product that got your attention in the first place. You may also buy some supplemental items to fill your shopping basket. You have already been persuaded by the OPP that you are going to get a good deal.

So it goes with open source. The software is free, right? How's that for an opening price point? The trick for BEA and others is to encourage customers to then walk around the "department," enabling them to drop premium and supplemental products/services into their "shopping baskets." That's why it's so important to "engage" the open source community as opposed to simply throwing free code "over the wall." Sellers should be thinking Wal-Mart. Open Source equals Opening Price Point. As for buyers, well, you can complain about hidden costs (and you can distort the case, as Frontline did), but you'll probably end up in the store anyway. Sam Walton is smiling from heaven.