“Ten is too many. Two is not enough.” That’s the rule of thumb I was taught by an IT manager from General Electric years ago. When you’re deciding which software to buy, 10 choices make too long a list to sort through easily. Having just two choices doesn’t offer enough flexibility. The sweet spot is somewhere in between.
The government of Israel went looking for that sweet spot late last year, when it decided to abandon annual updates to its Microsoft applications and throw its support behind the open-source OpenOffice suite.
Israel’s Ministry of Finance was reportedly unhappy with Microsoft’s unwillingness to cut prices for users who don’t need the whole Microsoft Office suite.
Does this represent an attack on the proprietary software business, or a commitment to an open-source philosophy? Nah — it’s just old-fashioned, negotiating hardball. As with most big IT customers looking at open-source software, this isn’t about philosophy. It’s about money.
A decade or so ago, you could play the vendors of PC office suites off one another and threaten to walk away from any of them. That forced prices down and kept vendors listening hard for what would make you happy.
But today you don’t have 10 competing vendors for PC office suites. You don’t even have two credible commercial alternatives.
Enter open source. Suddenly, you can get some leverage again — but only if you’re willing to do the same things that hardball negotiations required in the pre-monopoly days.
You can’t afford a philosophical or personal commitment to either open source or Microsoft. You’ve got to be focused on the best deal.
Are you ready for that? Maybe for your company, that competitive sweet spot doesn’t exist yet but now is the time to start your evaluation.
Every time a high-profile customer walks away from Microsoft, you’ve got a little more potential leverage — if you’re prepared to use it.
After all, you’re never likely to see 10 competing vendors in this space again. And even though two still isn’t enough, right now it may be the sweetest spot you’re going to find.