Michael Robertson: Moving from Geekland to the Mainland with CompareSoft


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Moving from Geekland to the Mainland with CompareSoft

Many of the readers of the Minute have probably heard of Linux, OpenOffice, GIMP and other open source programs. But I wanted to find out how commonplace those products were outside the Internet community. I decided to conduct a survey one lunch hour at a mall near the Linspire offices to investigate people's knowledge of their software options. I decided to ask questions about OpenOffice and GIMP, two of the more popular open source products competing with very expensive proprietary alternatives (Microsoft Office is $400 and Photoshop $500). First I wanted to investigate if regular people had ever heard of the open source alternatives, so I asked 10 people the questions below. (I have included the answers I received, plus the number of people who gave each response):

What are your options in computer software when looking for an office suite?
    6 - Don't know
    3 - Microsoft/XP Office
    1 - Mac Office

What are your options for sophisticated photo editing software?
    5 - Don't know
    3 - Photoshop
    1 - Photoshop/Microsoft Photo
    1 - Shutterfly

I must point out that the people I surveyed were shopping at an affluent shopping mall right next to University of California, San Diego (UCSD), and some appeared to be students. Yet none mentioned open source products when asked about their software options. Next I wanted to measure if people really had heard of OpenOffice, but couldn't think of the name. So I asked a different 10 people:

Have you ever heard of Open Office? Where would you get it? How much would it cost?
    10 - Never heard of it.

Have you ever heard of GIMP? Where would you get it? How much would it cost?
9- Never heard of it.
1- I think I have heard of it, not sure where I would buy it and have no clue how much it costs.

This survey was hardly scientific, but it confirms my belief that just putting software on the net and expecting people to find it, download it and install it is not a practical approach for competing with proprietary software companies.

The Compare Line

I decided to start a software company called CompareSoft, which would try to better market and sell open source alternatives for Macintosh and Microsoft Windows computers. The driver behind this idea was to take the "generic drug" approach to marketing - promote open source products as software with the "same active ingredients" as Windows or Mac, but at a much lower price. We spent the money to create beautiful packaging and build versions of several open source products with more mainstream titles and terminology... OpenOffice.org became CompareOffice, GIMP became ComparePhoto etc.

The packaging encourages shoppers to compare features, formats and price. The Compare line costs hundreds of dollars less than the better known competitors. It often reads and writes the most popular file formats and can be freely installed to multiple computers. We wanted to put "copy to as many computers as you like" as a specific feature, but software retailers refused to carry the product if that was on the box. If generic soda pop, generic drugs, and generic paper towels can garner 20-40% market share, generic software such as CompareSoft should be able to as well.

Some may criticize CompareSoft for charging for software that can be downloaded for free online, but this is necessary if open source is going to grow beyond 1% geek market share. If something is free, then there is no profit and therefore no incentive for retailers or distributors to merchandise the products. By charging a reasonable amount for CompareSoft products, we are able to build a profit motive for retailers and distributors so they are encouraged to stock open source solutions and not just expensive proprietary ones. We're also planning to re-invest a percentage of profits to encourage ongoing development and support of the products CompareSoft is re-branding and packaging.

CompareSoft President Jan Schwarz has done a terrific job in just a few short months building a company that can compete with software powerhouses not just at the code level but in the retail marketplace. By the first quarter of 2006, CompareSoft products will be in nearly 3,000 locations nationwide such as BestBuy and Circuit City. This will give retail outlets - where many people buy and learn about software - a low cost open source alternative for the first time. CompareSoft has also partnered with an international republisher, Questar, a long time follower of my initiatives. They are working to release and distribute the localized versions of these products throughout Europe, adding international sales and focused marketing exposure to those territories. This large distribution network will put pricing pressure on companies like Microsoft and Adobe to re-assess their oversized profit margins for software that they have long since captured their research and development costs. Making software more affordable will be a win for society.

-- Michael
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