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Technology Stocks : RealNetworks (NASDAQ:RNWK)

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To: Goodboy who wrote (4733)12/27/1999 2:26:00 PM
From: Scott C. Lemon  Read Replies (2) of 5843
 
Hello Goodboy,

I agree that Servers and Players will move more and more to a "free" or "Open Source" model. But as I have recently been looking at this, it appears that the business model that arises is not so different from the one that we have.

In a "Open Source" model, the "customer" can get the product for "free", but this does not represent a complete model. Because they are then left with one of three (maybe more?) choices ...

1. They hire an in-house development staff to support the code and any problems that occur. (Remember that a bug which causes the server to crash will have to be fixed very quickly!)

2. They could rely on the "Open Source" community to beg for fixes, or limit the expansion of their services to the rate at which the free-workers decide to implement code.

3. They could pay the original vendor to support the code and innovate with new features! This is a possible outcome that I am really starting to like ... it appears that this is then a "best of both worlds" scenario ... the customer gets the product and code for free, but then pays (or "outsources") the support and enhancements. If the vendor provides the best support and enhancements, then they still get paid ... if the customer finds another source for better support and enhancements, then they migrate their "business" to that vendor.

Of course there could be variations on this ... but I see something like this unfolding with people like VA Linux, etc.

Just an opinion/speculation ...

Scott C. Lemon
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