One of my great Eurofriends linked me to his 2009 predictions piece over the holidays, noting that companies like Acquia are “appropriating returns from the commons.” This may be one of the great misunderstandings of the open source era, and a big part of the FOSS-open source split. Commercial open source, some think, does indeed “appropriate returns from the commons.” I, ... [
I don’t think so, but then I read headlines like this, from the Manila Bulletin in the Philippines, and I wonder if such a boycott does not already exist. (Search Google images under “unholy Microsoft” and this is the first image that you get. From Vishal Sharma.) Pinoy open source firm, MS ink unholy alliance. Unholy, Sparky? Really? The story describes ... [
Matt Asay is not alone in wondering why EMC bought Sourcelabs. Sourcelabs will now be part of a new personal storage unit of EMC called Decho, under former Microsoft executive Harel Kodesh, who has done a blog post heralding his own appointment. What’s the strategy? Will the SASH stack now become the management center of Decho’s online backup service? Will Sourcelabs ... [
Version 3 of the Cfengine is out, and as with Windows 3.0 a generation ago it claims this release fulfills the promise, in this case of a data center that can heal itself. As part of the roll-out we have a commercial affiliate, Cfengine.com, with fireworks on the home page and binaries you can buy. An enterprise edition is promised real ... [
The obvious can make anyone seem like a genius. Back in October I suggested that the Android has to be more than an iPhone, has to be more than a phone actually: What if someone built, say, a flash drive with the Android software that turned your PC into an Android device? Or turned your Linux-based Netbook into one? It took ... [
Security and updates, which are often the same thing. There is no longer any doubt that hackers and malware writers are going after open source projects as they once went after Windows. Vulnerabilities are being found, discovered, created, exchanged. The best protection against vulnerabilities is to keep software updated, but most open source lacks update services. That’s one part of the ... [
In writing about the open source rollup yesterday I added the gaming market almost as an afterthought. The problem has always been that the graphics drivers needed for really high-end gaming just were not available through open source. Yesterday AMD tore down that wall. Thanks to some determined AMD engineers the company was able to release open source Linux code for ... [
As a business reporter for 30 years I have made a detailed study of rollups. They come in all types: The buy-out rollup, as in Bernie Ebbers’ MCI. They started as a tiny long distance operator in Mississippi, LDDS, then bought everyone else out and sought monopoly profits. The organic rollup, as in WalMart (right) or any big box retailer you ... [
Hard times make for hard choices. The loss of control implied by cloud computing, which may have been inconceivable in 2008, may become much more appealing in 2009. (My son took this picture on a hiking trip in the Smokies this summer. So credit John F. Blankenhorn.) The Yankee Group sent over an e-mail recently predicting this will take the form ... [
The most popular piece I wrote here during 2008 concerned the importance of the iPhone and Google Android. It was the fourth most-read post here during 2008. I find this interesting because, as you’ll see if you click the link, the item drew just three talkbacks. Maybe I nailed one and there was nothing left to say. My point in February ... [
Back in January I wrote that HTML 5 would prove one of the big stories of 2008. You agreed and made it the 6th most popular post at this blog for 2008. Maybe we were both wrong. As I write this in December HTML 5 seems no closer to implementation than it was in January. This is not an overt criticism ... [
Just two months after a court, in re Bilski, demanded strict scrutiny of software patent claims, a small Michigan outfit has issued a direct challenge to the new standard. Cygnus Systems, a 20-year old Midwest networking outfit, claims a March patent approval gives it control over all thumbnails used as icons on networks, and has filed suit against everyone. Well, not ... [
One of the big journalistic trends of 2008 was to call every new Internet paradigm open source. Blogging was open source journalism. Social networks were open source crowdsourcing. This was both a compliment and a warning. Even journalists who wouldn’t know a Linux penguin from a Disney one (above) were giving open source its props. But as with e a decade ... [
Entrepreneur Dave Rosenberg has a Christmas wish for you. (This is the first cat my wife and I owned. Mouse over to get the name for this Cat of Christmas past.) Dave wants to make everyone pay for open source in 2009. Money is the fuel that keeps things going. Entrepreneurs are in business to make money. It is reasonable for ... [
If you haven’t heard this already it bears repeating. (Picture from the University of Rochester.) Internet bandwidth is essential infrastructure. Like freeway lanes, like sea and airports, the quality and price of your Internet bandwidth determines how much it costs to do intellectual business with you. Open source and open spectrum are incompatible with monopoly gatekeepers. They create unnecessary economic friction. ... [
As I noted earlier in this review of 2008 one of the best ways to get traffic and talkbacks among open source readers is to say the magic word. Microsoft. But as our 11th and 12th most popular posts of the year demonstrate the real key to success lies in casting Microsoft as the villain. It’s also best if you’re specific, ... [
Stanford law professor Larry Lessig, father of the Creative Commons license and author of the classic Code is Law, has a modest proposal to help open source and open spectrum make progress in the Obama Administration. Abolish the FCC. Newsweek’s headline writers call it a “reboot” but Lessig is clear. You can’t fix DNA. You have to bury it. President Obama ... [
One point I must constantly make to PR folks and others is that there is a big difference between writing a blog and writing news stories or a column. News stories must be double-checked and just state what happened. Columns must stand alone, like a sermon or a jewel. Blog posts are the start of a discussion. You are not a ... [It’s interesting to see the many approaches that management and marketing folks take in valuing their products or creating pricing for them, particularly now when information is so readily available online.
At a very basic level, the only reason that something has value is because someone else wants it. Give that some thought. If you’re the only person that has the product and no one knows about it or wants it, then the product has no marketable value. That’s always been an interesting way of looking at products and markets for me.
So how do companies go about pricing their products? Any number of ways I would say.
- Some will take the financial approach - this is often the one that your typical accounting and business management folks take. They will evaluate their cost numbers for the product and then go through some exhaustive financail P&L and margin analysis, thus arriving at some sell price number. Generally, this will be based on many, many assumption about projected sales and whatnot, often leading to total catastrophe in the marketplace. I’m not sure just what products you can do this for.
- Some will do a competitive analysis - This approach at lease attempts to measure relative value with actual consumers in the marketplace. In many cases where the product has moved or is moving into a relatively well know or even commodity category, this can work well.
- Some base price on a value proposition - They take a look at how someone is working with item A and then try to place a relative value on the relative value of using Item B or some new item. This values the relative utility of the other product but can be extremely complex due to the many assumptions required plus the fact that Item B generally has a different utility value for different consumer based on use case.
So the real question is how do we value and price products in the marketplace? Are you one of those marketers that believe that you can create demand? Maybe so, but it’s a big job particularly with a new category. Taking product slices off of a larger market, like Apple manages to do is much easier.
Next to think about is differentiation…..
0 responses so far ↓
There are no comments yet...Kick things off by filling out the form below.
Leave a Comment