A while ago, while I was OpenOffice.org Marketing Project lead and full of fire-in-the-belly to evangelize OpenOffice through local retail establishments, I had an edifying series of encounters on the Mean Streets.
At the time -- this must have been back in the Autumn of 2002, the year OpenOffice.org 1.0 came out in that May with our big globally coordinated PR push led by the wonderful Zaheda Bhorat (ex- of Apple & Sun, now at Google) -- Members of NYLUG and elsewhere were rather interested in the idea of an OpenOffice boxed set to fill the shelves at retail. This conceptually was the bricks & mortar version of colleague, Anthony Long's, Flexeity Software: selling OpenOffice CD's bundled with pre-paid email & online support. Here's Anthony's Z-Shop at Amazon, still up.
On my own reconnaissance mission in NYC, I went down to some retailers and took the temperature of the store managers' attitudes to giving shelf space to a $19.95 to $49.95 boxed version of OpenOffice.org 1.x. There were also discussions with some college book stores (Columbia, Yale & Princeton) about a possible unobtrusive countertop display -- like the nicely designed & branded cardboard holder that Ubuntu ships with each substantial ShipIt shipment -- holding free OpenOffice CD's or those including OpenOffice and other great free apps from The Open CD Project (which Canonical, Ubuntu's pecunious parent, has since "acquired"). The two retailers I visited were CompUSA and Tekserve, the latter being the most successful Apple retailer in the world which has the best support shop to prove it (still offering 10-cent Cokes from an old-fashioned Coke machine, while you wait for your number).
Long story short, the response from retailers about OpenOffice was tepid, ranging from an Academy Award-winning glassy-eyed stare of feigned ignorance to overt hostility and threats of violence. It took me a while to process the meaning of this -- I mean, shouldn't the world, tut monde, love a cheaper alternative to MS Office? But it hardly takes an MBA to figure out the problem. It's Retail 101 from the OldSchool: the problem is retail margins, i.e, at our price-point and market share we had nothing in the long green department to offer retailers.
If OpenOffice -- or Sun's StarOffice, for that matter -- wanted shelf-space at retail, it would need to dice & price the same as MS Office and its myriad versions (in order give the retailer an equal dollar profit on each unit) AND pay additional marketing spiffs to the retailers just to get on the shelves. This, to say the obvious, is beyond the means of the duct-taped mailbag toting rabble of students, college professors, save-the-whales do-gooders, office suite hackers and dot-com refugees who made up the OpenOffice Marketing Project at the time. Tea & toast as well as the one step above dial-up DSL plan was about the extent of our individual resources in addition to lots of time for endless threads of opinionated, often directionless, chat across time zones at weird hours of night and weirder hours of the day.
In retrospect, our intention that OOo would penetrate through retail channels, catch fire and overtake Mindshare in the general populace was Quixotic. It was the manager at Tekserve whose laconic cocking of his head (like a less excited version of my dog when I'm speaking to her) first disabused me of this enterprising daring do. When I asked him if the shop would like to offer free OpenOffice CD's on the counter, which I would happily re-stock regularly, he said, "Ah, no," as if (I now realize) he was only pretending to consider it.
In CompUSA, I got a really enthusiastic young guy who loved the idea to pitch it to the Manager; they were over there together for 10 minutes. The young attendant was gesticulating with his arms ('...but can't you see...it's so great!...). The Manager was looking up at me from their conversation like I was a homeless person and he was about to call the police. The young attendant came back and simply told me the news: "Uhm, you see. We make over a hundred bucks on each box of MS Office Pro...ya get it?" Following the math, I now can hardly believe the level of my own naivete'.
My experiences at the college bookstores were similar, if not actually life-threatening. At one -- which shall remain nameless (the one in NYC with no undergraduate social-life) -- the store manager yelled at me and saw me out with a large security guard checking me with repeated nudges past the t-shirts, coffee mugs, baseball caps and shrink-wrapped boxes of MS Office (priced low for edu). After gathering my mail bag and my cell phone which had skittered across the floor under the Alternative CD display, it took me a while and a bit of research through my connections in Registrar's to realize that part of the university agreements with Microsoft prohibit alternative software to be sold at the universities' on-campus bookstores. So much for our liberal bastions of free-thinking. The truth would make Larry Summers run swiftly and even apologize.
The MS Office alternatives like OpenOffice cannot crack the Mindshare Bind by naively accumulating users and developers alone until they can offer something like real cash to the retail channel or until some courageous or foolhardy soul sues the universities and Microsoft for having made illegal agreements. Same with the OEM channel. Open source must be able to replace the vigorish coming from Windows & MS Office if our new, new thing is going to play hardball.
The commercially inept open source projects won't ever go there successfully and, thankfully now that OpenDocument is taking off in its own right, they won't need to. Google is going to come in with Writely and whatever OpenOffice code they need and fund a competive office suite web service that will catch on and provide the necessary sprinkling of the retail and OEM channels to bump the other guy. It was Jason Calcanis who I saw speculating that Google will be able to cut a revenue share of the ads delivered via Goolge Desktops on Dell, hp or other OEM PCs. Perhaps Jason wasn't the first to make this point.
With regard to interrupting the influential cash flows that sustain the Microsoft Kairetsu, Google is the only open source entity with the dosh and the intent. Watch how quickly Dell, hp, Fujitsu Siemens, Lenovo and the whitebox chorus leap to Linux when Google demonstrates where Daddy really lives.
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