--- title: "Open Source Hardware: Distribution first, Dollars second.. or Hardware As A Service" date: 2007-02-16T15:22:59Z modified: 2007-02-16T15:22:59Z permalink: "https://redmonk.com/jgovernor/open-source-hardware-distribution-first-dollars-second-or-hardware-as-a-service/" type: post status: publish excerpt: "" wpid: 906 categories: - Uncategorized timestamp: 2007-02-16T15:22:59Z tags: - Uncategorized --- I recently asked about a RedMonk [innovation match-making service](http://www.redmonk.com/jgovernor/2007/02/01/a-redmonk-service-match-making-smartups-and-suppliers/). 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](http://aqualung.typepad.com/aqualung/) 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](http://www.computerworld.com.au/index.php/id;1171201922;fp;2;fpid;1): > “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](http://www.thewhir.com/blogs/isabel-wang/index.cfm/2007/2/12/You-Need-An-Evangelist). 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](http://www.redmonk.com/cote/2006/10/06/redmonk-radio-episode-27-games-and-mainframes-hoplon/)). 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](http://www.humwin.com/index.cfm) 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](http://redmonk.com/sogrady/2007/02/15/triangulation/#comment-18577)? 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.