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Open Source Hardware: Distribution first, Dollars second.. or Hardware As A Service

I recently asked about a RedMonk innovation match-making service. I didn’t get so much as a morsel of feedback on the idea from my colleagues, so I assume it was a duff idea. Or maybe they just don’t read my blog. 

Ric liked the notion though, so perhaps I am not completely batshit.

I think IBM Systems and Technology Group and other hardware vendors could benefit from engaging with RedMonk in order to discover compelling early stage opportunities at an earlier stage. Why not give some zSeries mainframe capacity to Linden Labs, say, but before it got famous. Perhaps we could identify some POWER opportunities.

RedMonk already has one major systems company that we act as eyes and ears for, to help them seed, rather than cede, new markets. But there are plenty of other opportunities out there.

So to reiterate:

We often deal with people that are incredibly talented, but also resource constrained-many of our best insights come from those folks. But we also deal witha firms that have effectively limitless resources in comparison – the IBMs and Microsofts of the world.

Sometimes we help smartups within those large corporations to make change happen. The thing is, we’re very good at having conversations with smartups and knowing what is going on, while big vendors invariably find it difficult to focus there. Of course we’re not so good at talking to the mainstream and late adopters- the area in which Gartner’s awesome firepower is amassed.

Should we then formalise our ability to find great opportunities for leading edge software and hardware, and great great hardware and software, as loaners, or freebies, or cheap, or free-supported? At the moment RedMonk tends to do this on an ad-hoc basis, as “part of the service”.

I was recently quoted in Computerworld, in a story about open source:

“Success in IT is increasingly defined by what vendors or organizations give away, as much as what they charge for,” Governor said. “The world is moving on. It’s increasingly a commodity business. Brand, packaging in the broad sense, and the service wrapper are what organizations can charge for.”

Hardware vendors need to understand they are competing against Amazon Web Services, which puts an incredible premium on time to market, with price of hardware as a barrier to entry. But how to lower that wall? The answer-learn from open source and give stuff away…

You need to capture the customer at the point of desire, but then charge them at the point of value. You need to be able to get hardware to a prospect early, especially if you’re competing against a force of nature called Jeff Barr.

IBM has already done had some success with an on demand model with a Brazilian games company called Hoplon, which will only pay IBM as its customer base increases (our podcast here). But how many opportunities is IBM missing? I know IBM is prepared to push back and tell me its doing well with startups through relationships with the likes of Hummer Wimblad but I don’t buy it. Its not just BigCos that are late to the party these days – VCs too are finding it harder than they used to to get ahead of the game, because the need for third party investment is less than it used to be.

In the late 1990s VCs acted like resellers- any startup would be given buy to but Cisco, EMC, Oracle and Sun, then spend the rest of the $10m on advertising.

But we’re entering an era of advisory, rather than venture, capital in the technology business, and it should be obvious to anyone that social networks have taken over from advertising as the vehicle of choice for service adoption. RedMonk knows next to nothing about advertising but we’re experts at social networking.

Why not engage with us to help you triangulate for success?

Being truly On Demand might mean giving away some hardware, seeding markets, learning some lessons from your brethren in Software Group.

For other companies, if you have some hot new hardware techology and you’re looking for the smartest developers to target your platform, then you should probably be in touch, if you have some decent gear you can offer on a long term-ahem-loan basis. We’d be more than happy to act as an innovation match-making engine.

Is it really possible there might be a model in giving away hardware, at least to selected early stage companies? Sounds crazy – but then again go back 12 years of so people would have locked you up if you said software was going to trend towards free, and that anybody was going to be able to look at and contribute to the source code of products sold by the likes of IBM and Sun.

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5 Responses

  1. Seems (and seemed) like a good idea to me. In fact, if kept at a casual level to start playing with, I’d suggest people doing what Ric had done and start engaging with us to sort out their impossible to get RFPs. There’s the usual dance of what’s free, what ethical questions exists, and what’s not free to sort out: but, the point is that I think we could help people in the RedMonk community sort out what and which IT to get and not get, both in buying and general direction. Sounds like more of an enterprise angle than vendor.

  2. Cote’ – “Sounds like more of an enterprise angle than vendor” – I think you’ve nailed it, and this is the one area where (perhaps – this is an observation not a judgment) Redmonk has a gap: you have vendor clients rather than buy-side clients. This is possibly for historical reasons – both your own backgrounds and because vendors have been heavier users of analysts generally, and I know it’s something James would like to remedy (no I’m NOT ignoring your proposal!). That’s why I was supportive of the ‘matchmaking’ idea when James put it up – I think it is a good step in the right direction.

  3. Indeed, Ric, I couldn’t agree more. I think the match-making service would be a good service that we could provide to enterprises. And, in doing so, we could get to know and work with enterprises more than we currently do, which would certainly be exciting ;)

  4. Hi James

    I think this is a direction you guys could very easily evolve in. Of course you are thinking about this as analysts and your background is in reporting and analysis of strategies. But where you guys differ from conventional analysts is because you have a hunger to make sense of the context – of how society is changing, how its relationship with technology is changing, how systems, software architecture, project management, sales, etc etc reinvent themselves. That’s something everyone needs help on. In my opinion Gartner, Forrester, etc just don’t really get that stuff… and when they try to, they run it like a research project where objectives are defined 12 months ahead and then studious researchers go out and measure things. That’s what MIT’s Tom Malone (in ‘The Future of Work’ – a great book) would term a ‘command and control’ approach to analysis. You are part of his new breed – those who ‘coordinate and cultivate’.

    Maybe much of what you do is about supporting the (re)design process. I got the chance to spend a few hours talking recently with Sam Lucente, HP’s design boss. Sam was passionate about trying to drive a regime of simplicity throughout his “14bn dollar model shop”. He argued to me that nothing now from people like Google and the others would be possible without the really big, complex, back end systems work that was done in the 1990s by the likes of Cisco, IBM and Netscape to name a few. It was about connecting really complex stuff into really great, really simple things. You guys help each side connect with the other – the creators of the big, complex back end stuff need new ways to sell that shake away the 1970s-hangover IT sales channel.

    We are now entering a different time. I started my career in ICL’s sales training division of 1991. Full of suits learning to sell expensive software to people employed to buy it. But the most exciting part of the equation doesn’t work like that today. Those who are creating stuff need to start with the ideas and then build a flexible ecosystem around them – a shared vision with partners, a process to evaluate, select and integrate technologies and a strategy along the way to build awareness and to launch the thing (or not if you’ve done your job really well). But that’s not done by people off Accenture’s management training programmes – it’s done by people who understand that stuff evolves – it doesn’t get created in a plan on day one with three years implementation. Developing a brief is a problematic experience in almost every conceivable situation. What you describe as Redmonk’s strength in ‘social networking’ acts as a way of helping people evolve their brief, through observation, engagement, networking and the testing of ideas.

    This isn’t systems integration – there’s more art in it than that (and I always say the best inventors are artists who trained as engineers).

    If I was IBM or Sun or whoever, I’d want to be reaching the people designing the new really simple, but clever, stuff. They want to be selling to those people. And you find those people way better than they can.

    Disclaimer: Sam Lucente is a client. And you and I are friends / business cohorts.

    Oh and glad you liked the latest Re*move blog :-)



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Continuing the Discussion

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