Ignorance to Competitive Business Models Costs Incumbents $60 Billion by Refusing to Pay Strategy Taxes

There is a really dumb press release (and I say dumb because of its FUDy tone) at Marketwire suggesting that open source is a threat to the software business. This is may be true, but I think my post title says it all. Plus, the Standish Group wants to charge you $1,000 to prove this to you. Smart companies are succeeding with open source, such as MySQL and RedHat. From their inceptions, their business models were designed to give away or use free software, an infinite good that can be copied at zero cost, to sell services such as time and expertises, a finite good. Incumbent market leaders are not willing to pay what Dave Winer calls The Strategy Tax. It seems like the same idea as Clayton Christensen’s The Innovators Dilemma. Companies are not willing to change so drastically that they cannibalize their current value proposition, turn off their currently paying customers, and find new ones, so they whine when someone comes to eat their lunch. These companies must die off or they will create poisonous incongruencies inside of an industry, just like in the recording industry.

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