New OSS business models

(start-ups) have to think about making money. From day one they have to figure out the best working business model for their social business. Fortunately there are a quite a few business models out there to evaluate: subscription, affiliate & referrals, lead generation, selling virtual goods or content, discounts & deals, freemium and … advertising.”

Last week I spoke about “The Enterprise OSS play” and pondered whether an open-source OSS might be the catalyst to bringing virtualised networking to the masses (ie taking OSS from a customer-base primarily consisting of tier-one telcos out to the enterprise market and its increasing network sophistication).

At the moment, the enterprise market struggles to pay the premium required of sophisticated OSS. To build a sophisticated OSS requires a significant amount of effort by a vendor, which represents a significant investment, which in turn needs to be recouped from their customers.

To take sophisticated OSS to the enterprise will need a critical mass to be reached, firstly in terms of revenue streams and secondly in terms of the amount of product development that can be expended from reinvested profits. I’m not certain that such a business model can be derived from product sales alone since the revenue streams tend to be too lumpy.

Perhaps one of the other models mentioned in the quote above provides the critical mass of revenue? Perhaps it’s not the customer, but the customer’s customers that represent this opportunity? The mix of depersonalised data, location-based analytics and advertising seems the most likely to reach critical mass to me. Check out some big-number digital advertising projections here.

What are your thoughts? What are the most innovative, value-add business models you’ve seen (or can envisage) in the Telco / OSS industry?

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