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January 05, 2005

microeconomics, open source, and commoditizing your complements   (link)

http://www.joelonsoftware.com/articles/StrategyLetterV.html
Commoditize your complements. (Make the total cost of ownership, "TOC", of the prerequisites of your service/product/whatever as close to zero as you can so customers have more money to spend on your product. At that point, it's easier to use your whatever so more people will do it and demand will be higher, so the price can be raised.)

Understanding this strategy actually goes a long, long way in explaining why many commercial companies are making big contributions to open source.

Posted by yargevad at January 5, 2005 01:40 PM


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