Customer Segments are served and Customer Relationships fostered by offering a compelling Value Propositions via communication, distribution, and sales Channels1

Commercial Open Source makes it easier to target new vertical business domains (Fitzgerald, 20062). Because the Open Source project is free, it achieves much greater adoption and has added potential to reach additional customer segments or verticals. Transparency and clear project deadlines are essential when communicating with customers, managing customer channels and engendering trust. This is in contrast to proprietary software products where project management tasks and timelines are typically kept secret.

Communication channels should be tailored for the more technical members of a customer organization and feedback to customers should be provided by technical members of the supplying organization (Ågerfalk and Fitzgerald, 20083). Fitzgerald (2006, p. 591)4 recommends “leveraging the open source brand” to ease entry to a market and foster customer loyalty. Shaikh and Cornford (2011)5 warn of the reluctance of customers to adopt OSS based products that may be lacking in documentation and support services. Distribution channels are a vital aspect of Innovation and the literature doesn’t cover this in any details. Firms that devote resources to Value Creation may find they cannot capture significant value unless they address distribution issues.

At Snapfix we’ve already had a taste of this in our delivery of our nascent email service. We found that clear communication of the capabilities of the service was essential in delivering the value to customers.

Next: Final Thoughts and Commercial Open Source Revenue

  1. Osterwalder, A., Pigneur, Y., Clark, T., 2010. Business model generation: a handbook for visionaries, game changers, and challengers. Wiley, Hoboken, NJ. ↩︎

  2. Fitzgerald, B., 2006. The Transformation of Open Source Software. MIS Q. 30, 587–598. ↩︎

  3. Ågerfalk, P.J., Fitzgerald, B., 2008. Outsourcing to an Unknown Workforce: Exploring Opensourcing as a Global Sourcing Strategy. MIS Q. 32, 385–409. ↩︎

  4. Fitzgerald, B., 2006. The Transformation of Open Source Software. MIS Q. 30, 587–598. PAGE 591 ↩︎

  5. Shaikh, M., Cornford, T., 2011. Framing the Conundrum of Total Cost of Ownership of Open Source Software, in: Hissam, S.A., Russo, B., de Mendonça Neto, M.G., Kon, F. (Eds.), Open Source Systems: Grounding Research, IFIP Advances in Information and Communication Technology. Springer Berlin Heidelberg, pp. 208–219. ↩︎