Mind to Market

Thursday, December 14, 2006

Commercialization

After explaining our new software platform to Dr. James Wasmuth, a post-doc at the Hospital for Sick Children in Toronto, he asked me how we could compete with a university that may write a similar software application and offer it free as open source software. His view of the situation was that people would rather use free software than pay for software with the same functionality. His is a common view of software that is based on the assumptions that:

  1. the technology is the product
  2. the value of software is in the code


If a university group, funded by a grant, developed code that could reproduce the feature set that we as a for-profit company had also developed, they would have technology that would be comparable to ours. But technology per se does not have value in the market. Only by commercializing that technology through a product development process can you deliver value to the market. Although the university group may have employed certain commercialization methods; a snazzy user interface, documentation, etc. it is doubtful that they would have employed enough of these methods to make the software truly commercial. Universities neither cultivate the skills nor fund the efforts of commercialization and thus any attempts at commercialization would tend to fall short.

With that in mind, the simple answer to his question was "we don't." Our intent is to provide a commercial software product to the market. A product that has the full suite of commercial features such as proper documentation, high reliability and customer support and training to name a few. If we came across a university group that was developing a similar technology our strategy would be to collaborate; there must be something that they have that our product does not which could lead to licensing their technology in our product.

The second assumption is the old "factory model" of software production; software has the value characteristics of a typical manufactured good. This concept has been thoroughly debunked by Eric S. Raymond in his seminal book on open source software: The Cathedral and the Bazaar. Because software is in constant flux; expanding, adding new features, fixing bugs and adapting to new environments, it is never really "finished," you simply use a single version of a process that will continue on into the future. The value of a single static version of that code is small, what is of much more value is the ability to have access to the continuing process of development.

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