Some people make great software and try to make money by selling it as compiled (runnable, but not readable) programs. Others make great software, then give it away for free, and even let people both see and reuse their source code as they see fit.

These are the two typical ways of distributing software today. It’s commercial and secretive versus free and open. It’s business versus community. You might even say it’s capitalism versus communism. That’s the simplified, black and white way of seeing it, a way of seeing that misses out on the complexities and nuances of software development and distribution today.

It seems quite natural that when you spend lots of money and effort on developing a product, you want to be able to make money by selling it. And since it’s difficult to make money from the product if it’s easy for your competitors, or even individual users, to copy your software, you naturally feel inclined to protect your intellectual property by only distributing it in an unreadable form. This is the traditional software business model, that we are all familiar with. Developers know how to make money from their software, and customers know who to bark at when it doesn’t work.

Then there is the open source beast. State of the art software given away for free along with its blue prints. open source software is a disruptive phenomenon to the traditional software industry. Suddenly lots of people, and even large, well established companies are giving away their products and revealing their trade secrets. Today you have free alternatives to almost every mainstream computer program, both on the desktop and on the server side. Most notably you have the Linux operating system and the OpenOffice.org office application suite. How can this be?

Quite a lot of open source software is developed through some kind of community collaboration process. Groups of developers get together to develop the software of their dreams, either for fun, pure altruism or dire need. When what you need is not available or too expensive, why not make it yourself? If you make a good program and make it freely available, then others might use and improve it too, and before you know it, you have the most widely used web server or a nice little object database. This is cooperation, and there is nothing strange about that. People have been cooperating to achieve their goals since the dawn of ages. A mammoth is just too much for any of us guys or girls to handle alone, so we get together and drive it off the cliff together.

But companies usually don’t cooperate. (Except for illegal price fixing.) Companies compete to sell as much as possible at the highest possible price. When they give something away, it is usually part of some devious marketing entrapment scheme. And when they enter into the open source market and start giving away their most valuable assets, their software, that is usually nothing different. They give away software because they want to sell something else.

You see it everywhere. I got a free alarm system in exchange for signing up for an expensive security service, and my mobile phone, which cost me exactly NOK 1,-, is paid for through an over priced monthly subscription. Printer makers sell their printers at a loss, but make up for it with the sales of expensive replacement ink cartridges. The practice of giving something away in order to sell more of something else is a common business model today.

The Norwegian company eZ Systems freely distributes their open source content management system eZ Publish. Most users never pay a dime to use it, but corporate users with special needs when it comes to support and uptime can buy expensive service and support packages. MySQL AB, the Swedish makers of a widely popular open source database system, distribute a community version of their system while making money from an enterprise version with extra features and mandatory support packages. The company was recently acquired by Sun Microsystems for a considerable sum.

Sun is an interesting case to look at when you want to understand the free and open source software game. Sun made a gazillion dollars during the dot com era, which to a large degree was powered by their servers and their flavor of Unix operating system called Solaris. After the dot com bust, they suffered massive losses and struggled hard to re-position themselves in the new and much tougher market. One of their moves was to sponsor an open source version of the Solaris operating system, called OpenSolaris. By doing that, they made their server ecosystem more open and accessible, widened their user base and probably sold a few extra servers and plenty of services as a result.

Selling complimentary products and related services might not be the only reason to give away your software. Hurting your competitors can be just as rewarding. That could well be the reason why Sun launched their most successful free software project, the OpenOffice.org suite of office productivity programs. OpenOffice.org is a highly capable alternative to Microsoft’s Office application suite, and runs on all main operating systems, including Linux. Thanks to OpenOffice.org, Linux is now a feasible alternative to Windows and Mac OS as a desktop operating system.

Sun has also released their Java implementation as open source. Java has always been more or less free, so cost wise this changes nothing, but it is probably a move intended to strengthen the OS independent Java platform’s position against Microsoft’s .NET platform.

Hopefully this article has shed some light on why giving away state of the art software is a sound and not so uncommon business model. By giving away the core product, you gain a much bigger user base than would have been possible with a traditional model, which again increases your base of potential customers for add on products and services. It’s all about gaining traction and volume for the totality of your business.

InfoWorld has just announced the results of the 2008 Bossies, or Best of Open Source Software Awards. No less than 60 open source software programs have been awarded with a Bossie this year. Stuff your toolbox with whatever you need from the list of award winners, and be ready to take on any task, be it in personal productivity or in enterprise application development.

See the complete list here.

The new reality of marketing is about customers, or users, and the increasing power that they represent. The balance of power between suppliers and customers has clearly shifted in the last decade. Where suppliers previously commanded a large amount of credibility, customers now chose to listen to and take advice from each other.

Users have become a dominant influence in marketing

What sort of power are we actually talking about? Well, users don’t just want to participate – they expect to. They use the increased influence they possess to spread their perspectives, to share with others. Today, anyone who wants to be relevant as supplier of goods and services for the future generation of users must embrace this. They must allow consumers to participate in the company. Let them comment, question, and even create.

Consumers have many ways of finding or sharing the information they want. They use social networks, they blog, and they send messages to each other. Today’s technology makes it possible to easily send, share and publish anything, so that the public can participate.

Permission-driven and authentic communications

Consumers are constantly bombarded with advertising. This has turned many of them into highly selective recipients. If we wish to talk to this new generation of users, we must talk to them on their terms. In other words, with their permission and in an authentic manner that makes us credible. Permission-driven communication is based on the idea of giving consumers what they want, when they want it. By communicating with consumers on these terms, we can give them a relevant and engaging brand experience.

Embracing a new level of engagement with customers

In marketing, the focus is now B2U, Business to You. Here, we are talking about the market of one. This means that the individual or niche group is the focus, rather than a mass audience. Relationships must be based on targeted, permission-driven knowledge of the user’s unique need. If we manage to establish a strong, interactive relationship with each user, we are also creating evangelists for our product or service. To do this, marketing communications must be engaging and not least, express a message that the user can be proud of and therefore be willing to share. Good messaging can spread virally and reach a virtually unlimited audience in a short time.

Feel free to watch our presentation form our seminar on the subject:

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- ubiquitous and powerful mobile devices can help brands make b2u a reality.

Mobility is the next big frontier in digital branding. It offers immense possibilities in making B2U a reality, because of the uniquely personal and immediate nature of the platform.

>powerful and ubiquitous devices.
Mobile phones are easy to use and have an enormous user base, with over 2 billion devices in use worldwide.

They are well established as personalised communications and simple networking devices, using tools such a SMS and MMS.

Currently, there is an ongoing software and hardware convergence between these devices and PCs, the result of which is a new generation of smartphones. “Current smartphones, like the iphone, are not really phones: they are actually little laptops and time shifting devices”, says product design expert George Arriola, who has developed devices and services for several major technology companies.

This change is creating mobiles that are incredibly powerful personal communications and media tools. They combine both user identity and a critical networking role, both in business and private settings.

growing use of mobile media.
Already, mobile devices are the preferred platform for communication. OECD statistics show that the Nordic mobile phone ownership is at world-leading levels, with subscription rates in excess of one per inhabitant. Like the rest of the world, Nordic users are increasingly expanding their use of both smartphones and wireless networks that operate at speeds rivalling those of fixed broadband internet connections.

As technology develops, newer, more user-friendly interfaces for mobile devices will emerge, including headmounted displays, augmented reality displays, sensor and haptic technologies. These improvements in ease of use will fuel a surge in user demand for mobile networking, information and entertainment services – and create huge possibilities for brand owners to reach these people. A study from research firm eMarketer underlines this, estimating that between
2006 and 2011, worldwide mobile advertising spending will increase by a factor of ten.

personalised branding possibilities.
The possibilities for mobile branding are virtually limitless. Mobile devices have smaller screens that are not as overloaded with options for distraction as mainstream computers. And mobile software has arguably not kept pace with the possibilities of the hardware. Consequently, there is room open for brands to gain attention and “own” the mobile space, by creating software, games or other tools that are useful and fun for users.

The GPS and geo-location features now common on mobile phones can be used to “tag” people to a specific location at a specific time, with the permission of the user. This creates even more possibilities for developing messaging and value that is relevant to the user’s context.

Furthermore, mobile devices lend themselves to viral marketing campaigns, because people have been conditioned to utilizing phones for social networking, like sending SMS and MMS messages to friends.

Successful mobile branding concepts build on these elements. For example, phone-readable 2-dimensional barcodes, called QR codes, have already been utilised extensively in Japan. With QR codes placed in magazines, on billboards, or even on the back of a piece of clothing, people can scan the code with their phone camera, connect to a website where they can buy the item immediately or learn more about it. This type of concept could also be used to generate leads for business-to-business sales, or enhance brand presence in employee recruiting.
open field.

The race is on. Google, for example, has invested significantly in order to create an open-source operating system for mobile devices, called Android. Efforts such as this have set the table for brand owners
and developers to create the content that will push mobile devices into the forefront in web access and media consumption.

However, in the big picture, mobility remains largely untapped as a personalised branding opportunity.

Brand owners have a lot to gain by seizing the initiative.

“Web 2.0” is a catch-all term for a variety
of technologies and tools. They can be useful for building interactive elements into your branding approach. Here, we provide a primer on some important Web 2.0 tools:

blogging.
Blogs are diaries published on the web, often with functionality for readers to enter, read and respond to comments. They can lend an element of humanity to what could otherwise be perceived as a faceless entity. However, blogs must be insightful, engaging and frank, in order to attract attention and generate value for both readers and brand owners.

Corporate blogs are useful for engaging external stakeholders. Technology firms such as Microsoft and Nokia often use blogs authored by product development teams and marketing managers to generate interest in products or maintain an ongoing dialogue with customers.

crowdsourcing and wikis.
Crowdsourcing is a principle, rather than a technology. It is about harnessing the knowledge and power of the group, often enabled by digital media, to create more effective results than any single individual

or company could produce. For example, Threadless, a Chicago-based T-shirt retailer, allows customers to submit proposals for shirt designs, which are published on its website. The Threadless customer community rates the proposals and comments on them. The company then buys and produces the highest rated designs, assured that customers really want those products.

Crowdsourcing is also a key element of wikis, which are web-based applications
that allow groups to input, categorise, tag, share and verify knowledge. Wikipedia, the web-based encyclopaedia, is a well-known wiki, but the tool is equally effective in customer self-service and support, for example.

ajax.
AJAX (Asynchronous JavaScript and XML) are techniques for creating interactive
applications. They allow asynchronousactivity. For example, a web page is served to a customer with information generated from a database. The page and its underlying database are then modified with data input by the customer into the web page. Yahoo’s Flickr, Google’s Gmail and Google Maps are example of AJAX-based tools.

By combining the vast amounts of knowledge that can be embedded in data stores, with live user input, AJAX makes it possible for brand owners to create powerful, mass-customised brand experience.

rss.

RSS (Really Simple Syndication) is a standardised data format, with which web publishers can deliver updates of content to an audience. For example, readers can use RSS-based tools to re-quest that newspaper websites or blog writers send certain type of articles, in real time or at predetemined intervals. This tool allows users to determine precisely what content they receive, rather than wading through reams of unwanted material. It disaggregates or chops up large groups of content created by publishers but in the process, creates the opportunity for permission-based interaction with highly targeted audiences.

social networking.
Social networking websites are bridges between the web and the offline world, in which individuals interact in webs defined by friendship and niche interests. Facebook and MySpace are the best known social networking websites, but there are also countless other niche-oriented social websites, such as the photography-based Flickr, which takes photography as the basis for its networking.

Traditional marketing approaches can face difficulties in tapping into social networks. Facebook was forced to back down last year, when its users reacted to the company’s plans to sell information about them to marketers. However, social networks are inherently suited to user-driven efforts to learn about products.

British fashion retailer Primark, for example, benefits from a large following
on Facebook, where a huge Primark customer group shares news and opinions on the company’s products, stores and sales promotions.

- by using digital media creatively, brands can develop closer ties to customers.

The internet, mobile services, gaming and other digital media are tremendously flexible and far- reaching media channels. They provide easy access to authoring tools in many formats, such as video, images and the written word. These media are being advanced every day by millions of bloggers, writers, artists and filmmakers who are both customers and influences.

It is increasingly clear that with a voice and an audience, these people are changing the way brands will behave in the future. By engaging more actively with these voices, brand owners can build unique and special relationships with customers and partners, turning them into evangelists of the brand.
To do this, brand owners will need to treat each customer as a unique individual, using the possibilities of digital media. To move beyond B2B or B2C and reach “B2U”.

the hangover of mass media.
The traditional media platforms of television and print, as well as the economies that have grown up around them, have shaped our lives and the way we market products and services. In the traditional marketing model, brand owners delivered one-way messages to customers, who had no voice. Traditional media are being replaced by more specialised and interactive digital channels that have created greater possibilities for customers – and raised their expectations.

the power of niches.

Recently, the expansion of digital media and production tools have lowered barriers to entry and democratised the media landscape. Now, niche media and markets are becoming immensely powerful, focusing on the intensely personal and specific interests of individuals.

Retailer Amazon now dominates its industry because it has harnessed the niche and “long tail” possibilities of the Web effectively. It makes previously obscure products widely available, then infuses life into these niches by letting customers review the products and generate excitement about them, using tools such as discussion groups and user-generated “Listmania” lists. By catering to the long tail of thousands of narrow market niches, Amazon has achieved more success than it would have by replicating the mass market approach of traditional retailers.

customers demand to participate.

Digital media have also empowered consumers. With blogs, review sites, instant messaging and wikis, customers’ ability to communicate with each other – and to influence brands – is radically amplified.
This is eroding the old branding model built on oneto-many broadcast communication. In its place, a more democratic, network-based model of branding is growing.
The rise in customers’ influence on brands is an opportunity, not a threat, for brand owners who embrace the reality of the situation. By using new media constructively and engaging consumers in meaningful, two-way dialogues, companies can develop stronger brand relationships. IBM, forexample, encourages its employees to create public blogs, thus achieving a greater market presence, credibility and influence than it could achieve with its marketing staff alone. Participation also bonds customers to the brand and provides it with a virtually unlimited source of creativity. IBM has also engaged its clients and partners in a network-based open meeting, in which they examined the company’s technology assets and generated ideas for new products. At the consumer level, Nintendo has infused enthusiasm into its brand by actively courting users of its Wii gaming console and encouraging them to develop communities of interest. The benefit was vividly demonstrated during the simultaneous launch of the Wii and Sony’s competing PS3 console, which was deflated by a user-generated ad campaign that compared the consoles, favouring the Wii.
Web-based social networks, such as Facebook, are also becoming increasingly important arenas for participation. Using traditional marketing approaches in these channels can be a challenge for brand owners, because users perceive these networks as user-driven zones, rather than platforms for advertising. However, brand owners can benefit from grassroots-based movements, such as British discount fashion retailer Primark’s 100,000-strong Primark Appreciation Society on Facebook. The group generates tremendous benefits for the company in terms of brand equity, customer engagement and marketing efficiency.

serving markets of one.
Marketers now have the opportunity to create closer bonds with customers than ever before, by using new media to reach specific segments of an increasingly wider and more diverse audience.

To do this, the branding must now be tailored to a market of one: the person receiving the message. That is the essence of the B2U model. It is about developing closer, interactive relationships, built on detailed knowledge of the customer’s specialised needs. Google has been one of the biggest beneficiaries of this model. For example, with users’ permission, Google analyzes their e-mail activity, then serves up relevant advertising – useful information – directly related to the activity and location of each particular individual. The model works because customers welcome brand owners that engage in helping them find what they want, rather than force-feeding them with irrelevant offers.
That B2U branding approach, driven by engagement, insight and relevance to the individual, is repeated in the company’s other products. It has made Google the strongest brand in the world. In the future, consumers and businesses will continue to expand their use of the new, niche-driven media. And brand owners can generate similar benefits for their brands, by finding and tapping into the elements of B2U that are most relevant to their businesses.
b2u: business to you

The world is communicating differently. We have passed B2B and B2C. The future is B2U - “Business to You“. Organisations must reach out to their target customers as unique individuals. New technology makes it possible, but must be linked to the timeless art of communication. This is what Creuna is about. We build brands and business concepts for a digital reality.

By Ian Cocoran (Allworth Press; 2007)“The Art of Digital Branding” is written by Ian Cocoran, a regular contributor for Interbrand’s Brandchannel. He has extensive experience with digital branding and has been reviewing websites for Brandchannel since 2001.This book, Cocoran’s first on this topic, is a well-written and often humorous look at the web, how it is best utilized for branding and why many online branding attempts fail. Drawing on real-life examples, it covers both the psychology and the practicalities of online branding. It shows that if you intend to live your brand, it must be lived online as well.

By Thomas L. Friedman (Farrar, Strauss, Giroux; 2005)In “The World Is Flat: a brief history of the twenty-first century”, New York Times columnist Thomas L. Friedman strips away the apparent complexity of situations to explain why and how globalisation and technology have driven the great changes we have experiencedin our time.In addition to shedding a fresh light on events, Friedman points to more surprising developments to come over the next few decades. Follow his nine rules and it will change your point of view on how business will be practiced in the future.Buy the book here.