>>how does INPR make money with those free downloads<<
As the RHAT experience indicates, a price tag of zero on the actual software is no impediment to creating a valuable service-based business model. I am not convinced that the "Standard, Professional, Enterprise" product pricing model has much longer to live.
It is interesting that someone at Borland/Inprise is working on this one, (>>as the 4th Q conference call discussed, INPR will tie-in "services" with each product.<<) for two reasons. One, there could be an early-to-market advantage in building a "Standard, Professional, Enterprise" differentiation at the service, rather than the product level. Two, if the tide does turn quickly, relying on trade-up revenues to support their business model could leave the company well and truly stranded.
However, this makes it even more essential to achieve a higher margin on services in general, 6.5% is not impressive in anyone's language, and certainly won't build a lasting business.
david |
