I was just reading Deloitte Research’s Technology Predictions for 2006, a 20 page pdf report. It is quite inciteful and it’s free. Here are Deloitte’s 10 emerging technology trends / predictions.

1. Search engines will challenge email as the leading digital application.
2. Research and development will become more collaborative as business, government and academic institutions increasingly work together on new innovations.
3. Offshoring as a way of minimizing costs and optimizing efficiencies will continue to grow in popularity.
4. Classrooms of the developed world will incorporate more digital aids in their instruction.
5. Open source will pose an ever-greater challenge to the established software model, impacting both providers and end users.
6. Governments will increasingly regulate the Internet.
7. Technological advances such as speech recognition and voice synthesis, along with improvements in artificial intelligence, will change the way humans interact with computers and computers interact with each other.
8. Products will become less static with the launch of many more devices, from cameras to cars, that can be upgraded remotely.
9. The gap between those with digital technology and those without will widen and put undeveloped countries at an even greater disadvantage.
10. Those technologies that permanently change human behavior will continue to be the most profitable.

The report includes recommendations from Deloitte’s Technology, Media & Telecommunications industry group on how to take advantage of these emerging trends. I really like the last one. Perhaps it is time I came up with a new idea that permanently changes human behavior. Or at least find the opportunity to work closely with someone that has such an idea.

I was very surprised to see that VA Software had sold the Animation Factory assets to JupiterMedia. This brings an additional $9.35M cash to the company, bringing the total equity to approximately $55M. Is this a single event, or is this the start of a strategy to re-invent the company? I hope it’s a re-invention. This is what I’d also like to see.

1. Quickly grow the equity by selling off the rest of the e-commerce business (Thinkgeek).
2. Divest of the media business (Slashdot, freshmeat, Newsforge, ITMJ and Linux.com), but keep Sourceforge.net.
3. Change the name of the company to Sourceforge Corp, — there is far more brand equity in Sourceforge than VA Software.
4. Change the stock ticker symbol from LNUX to SFRG.

Steps 1 & 2 should yield at least another $50M to $100M cash. Maybe Novell or Red Hat would be interested in the Linux.com url. If done correctly it would free up a significant server farm that could be used for the new Sourceforge on Demand ASP solution. By keeping one or two of the media ad sales team, revenue from ads on sourceforge.net would be easily accomplished. The cash on hand might very well be used to purchase companies that fit with the sourceforge business and result in faster company growth.

Of course this is wishful thinking. As the former executive who turned around OSTG, I would like to see VA Software succeed at last, and see OSTG become a part of a larger media business where it can take advantage of media synergies.

Technorati Tag: Open Source, Software, Slashdot, Sourceforge, Media

There are many open source business models. Perhaps the most notable are the following three: The services model, the product subscription model and the product dual license model. A recent article, How to make money from open source, published at the Australian web site Builderau, perpetuates the myth that the open source revenue model is only a service revenue model. Although services are fundamental to all open source business models, as they are with most proprietary software models, they are not the only source of revenue.

The Services Model
Many services business have been created around open source projects. Nagios, a well respected open source network and application monitoring application, list approximately 100 companies and several individuals offering support, implementation and other consulting services centered around their open source project. Cnet’s recent article, Open-source services field heats up lists several companies that have adopted this model.

The product subscription model
The product subscription model, simplifies delivery of the software. Companies using this model save customers time and effort by eliminating the need to download software, compile source and figure out how to install it. In this model, the open source project is packaged into a standard installable product that can be downloaded, delivered pre-installed on hardware, such as an appliance, or published on a CD. In addition to the standard packaging a set of support services are also packaged into a single SKU. An annual fee is charged for the combined package — including product and support services — along with guaranteed future deliverables, such as tested patches and updates provided during the subscription period. This is not unlike the 10%-25% annual maintenance fee charged by proprietary software vendors. Commercial Linux distributions such as Red Hat and Novell’s SUSE utilize the subscription model.

The product dual license model
This model only works when the commercial open source company owns all copyrights to their open source project. With this model there are two licenses. One is a free open source license, such as the GPL, offered with the standard product. The other, is a more restrictive fee based license which includes product guarantees, and is often associated with a more feature rich and robust product. MySQL and SugarCRM are examples of commercial open source companies that implement the dual license model.

Common characteristics
There are several common characteristics among viable commercial open source companies that implement either the subscription or the dual license model. The most important is that their open source project is ready for commercial success and has an existing base of users and a growing demand for support and other services.

All offer supplemental services in addition to those packaged with the product as additional revenue streams. These supplemental services offered by commercial open source companies are not unlike the services offered by proprietary software companies and may include:

• Multi-level support services including 8×5 email and forum support through 24×7 service level agreements
• Education and certification training with product discounts and incentives for fully certified or trained customer teams
• Standard professional services including installation and implementation services
• Custom projects.

Other characteristics include: giving back to the community through open source code drops, hiring developers and encouraging them to spend a percentage of their time working on other community based open source projects, and a strong advocacy of open source development and business models.

Technorati Tag: Open Source

A recent article in CIO magazine The Don’ts & Do’s of Creating an Inspired Workplace made some very good points. The Do’s in the article are common sense practices all managers should follow, however the article didn’t go far enough. I believe in establishing a corporate culture that lets everyone, not just management, participate in the organization’s success and survives any particular manager.

There are three basic cultural approaches I’ve used in the past that have worked well.

The first is elimination of fear. Once people understand that every idea they have deserves consideration, and they will not be shot down for raising it, their passion for improving the business will manifest. Many employees are afraid to raise ideas for fear that their boss will respond with ridicule or apathy. The open door management policy is largely a myth. To make it real, it’s important to acknowledge all ideas. Let employees know that even if an idea is, at this point in time impractical, it is still worthy of consideration nevertheless.

The second is communication between people — not just top down. I’ve seen many cases in which employees say they can’t get something done because a peer is not cooperating. More often than not, they’ve not communicated with each other. They get signals from management that empowerment is only top down. Establishing a culture where people are expected to communicate with each other and commit to each other goes a long way to fueling successful business gowth.

The third is respect. Several of the Don’ts and the Do’s from the article in CIO magazine are manifestations of the disrespect/respect behavior. Respect is a behavior that must come from the leadership of any organization, and must be demonstrated by the entire management team and expected of everyone. Treating all people in an organization with respect and dignity will forge a healthy relationship between the individual and their employer. The consequences of a culture of respect, may not directly translate to better or faster growth or even higher profits, but it will ultimately make sure people feel good about the contributions they make or are asked to make.

Recently, I led the turnaround of a high-tech online media company. This turnaround would not have been possible if not for the team of individuals who were inspired to work together toward a common set of goals. Eliminating fear, fostering communication and emphasizing respect set the stage for the turnaround.