How Open-Rate could be disruptive!

UPDATE: The Open-Rate team has been very cooperative and are now providing an Open Source version again. Read more about it.

 

For those unfamiliar with Open-Rate, Open-Rate is an open source rating and mediation framework. Open-Rate is a framework more than a finished rating solution. You can build advanced rating and mediation solutions with it such as real-time charging.

Unfortunately Open-Rate decided to withdraw the option to download the GPL version from its website. Their feedback was that operators were not contributing to the open source product.

How can Open-Rate be disruptive?

There are very few open source rating and mediation solutions that are ready for prime-time production usage. Open-Rate could be the first one. Like any telecom software vendor, Open-Rate is looking at operators to be their prime customers. However they are forgetting some new customer segments.

Real-time charging, subscription-based billing, complex rating, etc. are problems that are not only for telecom operators. Cloud-solution providers (IaaS, PaaS and SaaS) all are candidates for real-time charging. M2M solution providers will have millions or even billions of transactions that will be flowing between machines. Even by charging €2500 for a license [extremely cheap in telecom land], Open-Rate is closing the doors for many start-ups. These start-ups want to try out new ideas and when successful then they will want support and other services. However they are unlikely to pay upfront.

Open-Rate should be looking to build a new community of cloud and M2M solution providers. These customers will be happy with GPL since they are hosting the solution and not selling software. However by launching LTS versions [Long-Term Support – similar to Ubuntu] every now and then, customers are very likely to go for support contracts for the LTS+GPL versions as soon as their businesses gain volume.

Their will also be other possibilities to get a larger Open-Rate user base. An example could be an Opencart integration. Opencart is one of the many open source e-commerce solution. However it currently does not support subscriptions and complex event rating. By partnering with some of the existing Opencart solution providers, Open-Rate is very likely to find their solution becoming an extension of Opencart. Again in the beginning Opencart users will not pay a license but when their webshops have to be up 24×7, support and services can and will be sold. Customers will come and ask, instead of having to chase them…

These are just two examples on how Open-Rate could expand its customer base and revenues by offering their software for free. A final example could be hosted/cloud subscriptions and real-time rating solutions. Zuora is an example of a company that is active in this space but the market is just starting.

The conclusion is, Open-Rate should reconsider offering their solution as a GPL download again and to target it towards new customers outside of telecom operators. These new customers are a lot more agile, do not go through lengthy RFP processes, and there are a lot more of them although each is small. Instead of trying to be the cheap telecom solution, Open-Rate should be trying to be the default open source solution for anybody that wants to do complex rating, charging, mediation, etc. You can make money from free, Redhat, Ubuntu, etc. are all good examples. A good book on the subject is “Free: The Future of a Radical Price” by Chris Anderson, download the audio files for free.

Advertisements