Strategic Marketing Plan
Welcome to the Strategic Marketing Plan for the OpenOffice.org Marketing Project. Copies of the marketing plan are available at marketing.openoffice.org in a variety of formats. This section of the wiki has been setup to transfer a copy of the plan to this site.
- 1 Cover Page
- 2 Table of Contents
- 3 Introduction
- 4 Community Review
- 5 Market Review
- 6 Product Review
- 7 Competitor Review
- 8 Market Segmentation
- 9 Review of the External Environment
- 10 SWOT
- 11 Goals and Objectives
- 12 Strategic Proposals
- 13 Appendix
- 14 References
Table of Contents
What this Plan is...
This document is the first published Strategic Marketing Plan for the OpenOffice.org office productivity suite. Its publication is timed to coincide with the run-up to the second major release of OpenOffice.org, version 2.0. The Plan follows a three-month consultation process with the whole OpenOffice.org Community, and seeks formal adoption by the Community Council at the end of 2004.
The Plan looks at the current market for office productivity suites, at the major players in the field, and seeks to identify trends which will influence the market over the next five years. It looks at OpenOffice.org’s place within the market now, and where it should aim to be by 2010.
The analysis looks at the strengths and weaknesses of the OpenOffice.org suite, and how these should help influence the Community’s response to opportunities and threats in the marketplace.
It also looks in detail at the features of OpenOffice.org and the benefits these deliver to customers. From this analysis, the Plan identifies a number of target markets whose needs are most closely matched by the benefits provided by OpenOffice.org.
Finally, the Plan sets targets for penetration by OpenOffice.org into these target markets, and lists the main strategies which the Marketing Project proposes to achieve these goals.
...and what it is not
This document is not a Strategic Marketing Plan for the OpenOffice.org Community. Just as the software needs to attract users, so the Community needs to attract contributors who want to help the Community achieve its mission statement. This will be the subject of a separate Plan.
As the Plan continues to evolve, the latest version will be available on the Marketing Project web site: http://marketing.openoffice.org/strategy. Comments and contributions are always welcome in the Marketing Project’s strategy discussion forum - see the Project web pages for an archive and details of how to participate.
StarDivision, the original author of the StarOffice suite of software, was founded in Germany in the mid-1980s. Its StarOffice product developed over the next decade into a fully-fledged office productivity suite (spreadsheet, word processor, graphics, presentations) comprising over 7.5 million lines of code, and equalling in functionality the market-leading product (Microsoft Office).
The company was acquired by Sun Microsystems Inc during the summer of 1999, and StarOffice 5.2 was released in June of 2000(1). That same year, Sun made the momentous decision to open-source(2) the product as OpenOffice.org 1.0 and kick-start the OpenOffice.org Community (the Community) to support, develop, and promote the software under open-source principles(3). At the same time, Sun decided to use the same codebase as the foundation for the continuing commercial StarOffice product.
The Community(ii) was set up with the following mission statement:
OpenOffice.org Mission Statement To create, as a community, the leading international office suite that will run on all major platforms and provide access to all functionality and data through open-component based APIs and an XML-based file format.
The Community’s Success Criteria are derived directly from the mission statement:
- to grow a world wide Community capable of maintaining, developing, supporting, and promoting OpenOffice.org
- to develop OpenOffice.org to provide all the features expected from a world class office productivity suite
- to grow the market share of OpenOffice.org to a position of leadership
- to design OpenOffice.org to support easy translation into any language (including complex text and vertical writing languages), and provide translations and support in local languages worldwide
- to encourage porting to any computing platform capable of running the software (MS-Windows - all variants; Unix variants - e.g. Sun Solaris; Linux - all significant distributions; Apple Mac; etc)
- to architect OpenOffice.org on a modular basis, callable from all major programming languages, and document fully all APIs(4).
- to store all OpenOffice.org data in published XML formats and work with standards bodies to ensure compliance with emerging standards for office documents(5).
[ii]In this document, the term OpenOffice.org is always used to mean the software; the term the Community is used to refer to the OpenOffice.org project.
There are various business models for sustaining open-source activities. One model, used by Red Hat, is to charge customers subscription fees for services and support around free software. Open-source database company MySQL has a commercial licence for customers who want a support contract and a separate open-source licence(6). Other companies, such as toolmaker Zend Technologies, charge for commercial products that are more functional than the open-source versions of their software. The Linux kernel itself is now developed largely by corporate employees(7).
As of today (2004), both OpenOffice.org and the Community are heavily dependent on the support of Sun for their continued survival. The Community has set itself a challenge to become completely self-sufficient, and rely on volunteer effort and/or funds generated by the Community. Given the changing patterns within the global IT industry, this is a desirable position for the Community to be in. However, the challenge of reaching full financial and legal autonomy is not to be underestimated.
As of summer 2004, some projects within the Community are well-supported and successful - for example, the native language projects are providing support for over 30 languages. Overall the Community is still immature in terms of governance, organisation, and ability to reach consensus and mobilise around an agreed plan. The creation of this Strategic Marketing Plan by the Community’s Marketing Project (the Project) is part of this Community development process. It is recognised that the Community itself will need to change in order to adopt this Plan and those from other projects.
The Project has sole or joint responsibility for the first five of the success criteria listed above. In the five years since launch, OpenOffice.org has been highly successful in attracting downloads(8) and distribution. However, its share of the global office productivity suite market is probably no more than a few percent(9), with Microsoft’s Office product (MS-Office) the firmly entrenched market leader.
Studies have shown the difficulty of replacing an established brand leader in conventional products. For example, one study was made of 25 brands that held the number one position. Sixty years later, 20 of those 25 brands still held the number one position. Similarly, studies show that historically, the top three brands in a product category typically occupy market share in a ratio of 4:2:1. Gartner Group predicted in May 2002 that the OpenOffice.org codebase could eventually reach 10% market share(10).
On the other hand, academics such as Christensen have demonstrated that under certain conditions, newcomers can dethrone even the most firmly entrenched market leader (see A Game Plan for Disruptive Marketing). The project believes that with targeted marketing, OpenOffice.org can fit the criteria of being a ‘disruptive technology’, and that the ambition of being ‘the leading international office suite’ is achievable within the five year timescales of this Plan.
By 2010, the Project’s goal is for the OpenOffice.org codebase to be in a position of market leadership (>50%) in all its target markets; for it to be the office suite of choice for a majority of all PC users; and for it to be in use by a significant percentage (>40%) of all office users worldwide. The analysis behind these targets is explained in Target 2010.
Thanks to the long history of development,OpenOffice.org is a mature product and independent reviewers acknowledge that it ‘provides the core functionality that most users need’(11). The Community’s goal is for OpenOffice.org to stay in this position of meeting all the needs of the typical ‘office’ user; to offer a simple and clean migration path from significant competitors; and to be available to users on the platform and in the language of their choosing.
The roles of the Marketing Project in meeting this product goal are primarily those of ensuring product development meets the evolving needs of users, and attracting members to the Community who will become active in any aspect of the Community’s activities. As explained earlier, this Plan looks at the first of those roles.
It is a truism that a PC is useless without software. Once an operating system has been installed, a PC can be used to run application software. While there is a market for PCs running specialised applications, the majority of PCs sold are used to run one or more ‘office’ applications for at least some of the time.
The potential market for office suites providing these applications is therefore almost as big as the market for PCs, and growing at the same dramatic rate (see Target 2010).
Currently, the market is dominated by the Microsoft Windows (MS-Windows) operating system, and within this platform, the dominant office suite by far is Microsoft Office (MS-Office) in its different versions.
What is an Office Suite
The concept of an office suite arose out of the limitations of legacy computing technologies. Word processors, spreadsheets, and drawing packages each met generic office user needs; bundling them together made good commercial sense. So, in features(iii) terms, an office suite is typically a bundle of a word processor, spreadsheet, and presentations package with a similar look and feel and interoperability.
However, in benefits terms, the Project would define an office suite as a single package that helps a large population address the most common tasks in their working lives. In today’s internet-enabled offices suggests that the conventional trinity of applications is no longer sufficient. The Project contends that a single package that helps a large population address the most common tasks in their working lives is incomplete without at least email and web browser capabilities.
Types of Office Suite
Providing different ‘flavours’ of office suite enables COTS2 software vendors to achieve marketing goals including targeting different markets, introducing differential pricing, or extending the life of products.
- Entry Level
- These software packages provide basic ‘office’ functionality within a single offering (e.g. Microsoft Works). The Project contends that users are constrained into this segment by one or more limiting factors, such as: price (the user cannot afford anything better); requirements (the user’s needs are completely met by the product); hardware (the users PC cannot run bigger software); knowledge (the user believes they can only use this product); and so on.
- Full Function
- The usual definition of office ‘suite’ refers to more powerful separate packages which inter-operate closely with a common look and feel (e.g. MS-Office with Word, Excel, and Powerpoint).
- ‘Professional’ editions of office suites add in other packages, for example, databases and photo-editors.
- Internet enabled
- Increasingly, customers expect office suites to also provide internet capabilities such as:
* web browser / html editing * email * groupware (e.g. shared calendars)
According to the definitions above, OpenOffice.org falls between the Full Function and Professional market segments, with some elements of internet enablement.
StarOffice and OpenOffice.org
Sun Microsystems’ decision to open-source the OpenOffice.org codebase has created a de-facto segmentation of the market by licence, with the same underlying codebase available under open-source licencing (as OpenOffice.org) and as a COTS product (StarOffice).
The two different product offerings are targeted at two different market segments, although there is a considerable ‘grey area’ in between.
Some typical key differentiators are as follows:
Reasons for preferring StarOffice to OpenOffice.org
- A user currently has a proprietary licenced competitive COTS product, and prefers to continue to use proprietary licences
- Company policy forbids open-source software
- There is a requirement to purchase world-class support from a large vendor
- A company needs the security of having a large corporate supplier to sue if anything goes wrong
- A user needs the additional commercial products included in StarOffice (fonts, Adabas database, etc.)
Reasons for preferring OpenOffice.org to StarOffice
- A user does not currently have a licenced competitive COTS product
- StarOffice is not available in the user’s local language/on their chosen platform
- An organisation wants to minimise its acquisition cost
- A user believes in the principle of open-source software
- An organisation would like to be able to give away copies of the software (e.g. to students, employees, etc.)
Other products using the OpenOffice.org codebase
Products have already emerged based on the OpenOffice.org codebase, for example, versions targeted at particular sectors(12), or geographies(13), or operating systems(14). Sun Microsystems have also actively encouraged the emergence of commercial products based on the codebase (AOL Office, Novell Office, Lycoris Office, etc)
Given the diversity of the open-source development community, it is also inevitable that other development streams will emerge. For example, the Ximian ‘fork’ of OpenOffice.org(15) has attracted contributions from the Fedora and Debian communities, some of whose developers are uncomfortable with the Community licence / development model, or with software which has any dependencies on non-free software (such as Java).
The Project considers that these developments all contribute to the adoption of the OpenOffice.org codebase, and as such are welcomed. However, the Project’s main focus is on the branded OpenOffice.org product, and as such has adopted the following principles in respect of third party products.
- All users of the codebase are actively encouraged to give prominence to the fact they are based on the OpenOffice.org codebase.
- On a reciprocal basis, the Project should use third party brands to build product credibility (AOL is a bigger consumer brand than OpenOffice.org or Sun Microsystems).
- Any improvements to the OpenOffice.org codebase should be fed back into the Community.
- Organisations using the codebase for commercial ends should also be encouraged to feed back to the Community either in kind or in cash.
- The Community should work to remove any barriers which prevent organisations or individuals contributing to the Community.
[iii]See Features and Benefits
Marketing Goals noted that delivering the Community’s Mission Statement means creating disruptive change in the marketplace. The seminal text on disruptive change - The Innovator’s Solution(16) provides some strategy guidelines for identifying target markets:
A Game Plan for Disruptive Marketing
Target only those customers and markets that look unattractive to every established competitor. If an idea is sustaining (an improved version of an already available and popular product) relative to even a single competitor, the idea will not succeed as a disruption.
Try to compete against nonconsumption: customers who are currently unable to use currently available products at all, either because they can’t afford them or are too inexperienced to use them. These markets have the most potential because these customers will compare your product to having nothing at all, and so will be thrilled to buy it even if it’s inferior to currently available products.
If there are no nonconsumers available, explore the feasibility of a low-end disruption instead: customers who can’t use all the functionality they currently have to pay for and who won’t pay premium prices for upgraded products. If this isn’t possible either, and you’re not an industry incumbent, don’t invest in the idea.
When searching for ideas with disruptive potential, look for ways to help customers get done more conveniently and inexpensively what they are already trying to do. Don’t invent new problems for customers to solve - they won’t reprioritise what’s important in their lives just because your product is available.
The Project plans to address both overserved users and non-consumers. Many overserved users who are considering upgrading do not use all the features of their current office suite. These users are ripe for the message that OpenOffice.org provides the full-featured office suite functions at a lower (or no) cost. Non-consumers are rampant in countries with annual incomes below $10,000 – about five sixths of the world’s population. For these potential users, even $100 would be too expensive for an office suite.
Within these guidelines, the Project has identified a number of market segments where the benefits of using OpenOffice.org provide a particularly good match to the needs of the market. It has also identified a number of segments where the fit is less good. A detailed analysis of the product features of OpenOffice.org and the benefits perceived by users is given below in Features and Benefits. The full analysis of the target markets is given below in Market Segmentation.
Features and Benefits
Other Office Suites
Review of the External Environment
Social and Cultural Environment
Political and Legal Environment
Goals and Objectives
PR and Publicity
Building the Plan
- OpenOffice.org uses a dual licence strategy for the source code: the GNU General Public licence and the Sun Industry Standards Source licence. See http://www.openoffice.org/license.html
- See for example What is Open Source on http://www.oss-institute.org/
- There is a good explanation of this and UNO technology at IBM’s DeveloperWorks site: http://www.ibm.com/developerworks/library/co-uno.html
- For example MySQL AB, developers of the popular open-source database MySQL: http://www.mysql.com/company/
- Andrew Morton speaking at a meeting sponsored by the Forum on Technology and Innovation in July 2004 - http://gcn.com/vol1_no1/daily-updates/26641-1.html
- Monitored by the Statistics Project at http://stats.openoffice.org/
- Unpublished paper from Erwin Tenhumberg soo_ooo_market_share_analysis_draft_21july2004.sxw
- Reported in http://www.itworld.com/nl/lnx_desktop/05302002/
- For example the comparison of Office suites in ZDNet UK June 2004 http://reviews.zdnet.co.uk/software/productivity/0,39024195,39158410,00.htm
- e.g. Logotron’s SchoolOffice (education sector) - http://www.logo.com/cat/view/school-office.html
- e.g. KaiOffice (Chinese) - http://www.kaisource.com/kaioffice68en/index.html
- e.g. SotOffice (LBA-Linux)- http://www.sotlinux.org/en/sotoffice/index.php and NeoOffice (MacOS) http://www.neooffice.org
- The ooo-build parallel fork is a good thing: it brings the notoriously unapproachable OpenOffice.org development process closer to what the rest of the community expects to deal with Linux Weekly News Aug 19,2004 - http://lwn.net/Articles/97549/bigpage
- Christensen and Raynor The Innovator’s Solution http://theinnovatorssolution.com
- e.g. OpenOffice.org is one of the main pretenders to the Microsoft Office throne, one of the few that can measure up to one of the most formidable office suites in the world http://www.itreviews.co.uk/software/s236.htm
- Typical estimates give MS-Windows 95%, Mac OS 3%, GNU/Linux 2%
- ...Microsoft increasingly offers licenses to the larger key accounts at very attractive cut prices to beat the competition http://www.researchandmarkets.com/reportinfo.asp?report_id=222210&t=o&cat_id=4
- Microsoft has been reprimanded over misleading advertising by the Advertising Standards Authority (ASA). The UK watchdog upheld complaints about a magazine advert which claimed that the open-source operating system Linux was more expensive than Windows. http://news.bbc.co.uk/1/hi/technology/3600724.stm
- Microsoft: Linux is a threat, it may mean prices cuts and less business for us Jo Best, Silicon.com 03-Sep-04 http://software.silicon.com/os/0,39024651,39123685,00.htm?nl=d20040906
- Microsoft Pushes Translating Its Programs into Developing Nations’ Languages Seattle Times July 2004 http://www.newsgleaner.com/site/news.cfm?newsid=12315035&BRD=2340&PAG=740&dept_id=226964&rfi=6
- Microsoft has slashed prices on Windows XP and Office to join the Thai government’s ‘people’s PC’ project CNet Asia June 2003 http://asia.cnet.com/newstech/systems/0,39001153,39136847,00.htm
- e.g. the now discontinued Javastation product
- IBM’s new software is designed to be distributed and accessed through a Web server TechRepublic, May 2004 http://techrepublic.com.com/5100-6265-5209067.html
- IBM Developerworks, June 2004 - http://www-106.ibm.com/developerworks/lotus/library/article/lwp20-features/
- For example Anyware Office - http://www.anywareoffice.com
- Open Source Lending CDs in Libraries: Howto, Bob Kerr, 2003 http://www.openoffice.org/nonav/issues/showattachment.cgi/11838/Open%20Source%20CD%20in%20libraries%20Howto.pdf
- Circuit Riders: A technology support solution for the voluntary sector http://www.lasa.org.uk/cgi-bin/publisher/display.cgi?1358-7102-93792+computanews
- Open source in the small and medium business sector Gavin Dudley, September 2004 http://www.tectonic.co.za/view_feature.php?viewid=2
- Microsoft broken up BBC Business News Wednesday, 7 June, 2000 http://news.bbc.co.uk/1/hi/business/781852.stm
- See for example http://www.quickmba.com/strategy/PEST Analysis.htm
- You can see that in places like China where they have this huge software market - $35bn in the next couple of years, according to IDC. They are endorsing Linux and paying stipends to the corporations there to use Linux, in an effort to try and keep the software business inside China. Carol Stafford, IBM worldwide vice president of Linux sales, July 2004. http://www.vnunet.com/analysis/1156787
- See for example Nicholas Carr’s now infamous Harvard Business Review articleIT Doesn’t Matter in May 2003 http://www.nicholasgcarr.com/articles/matter.html
- e.g. Within Australia the small business sector comprises around 97 percent of all private sector businesses and employs 49 percent of the total work force or some 3.3 million people. http://www.sbdc.com.au/documents/5.3/BECreview2003CommunitiesofEnterprise.pdf
- Estimates from the Washington-based Business Software Alliance in July 2004 http://australianit.news.com.au/articles/0,7204,10071717%5e16123%5e%5enbv%5e,00.html
- e.g. Oracle’s 2000 patent application for content management systems granted in 2004 http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO1&Sect2=HITOFF&d=PALL&p=1&u=/netahtml/srchnum.htm&r=1&f=G&l=50&s1=6,745,238.WKU.&OS=PN/6,745,238&RS=PN/6,745,238
- In Vietnam, the cost of MS-Office represents 1.4 years’ average local wages Miguel de Icaza, OOoConf 2003
- For insights into this see http://www.it-analysis.com/article.php?articleid=12142
- Microsoft estimates widely reported in the press in July 2004.
- Jupiter Media reported in http://yahoo.pcworld.com/yahoo/article/0,aid,111616,00.asp
- Forrester Research reported in http://www.consultingtimes.com/archives/2004_03.html
- e.g. PC Treasures Inc’s Business Works Suite http://www.pctreasures.com/bundles/bussworkplus04.htm
- e.g. Scotland, Europe - http://www.theregister.co.uk/2003/12/18/openoffice_cds_live_for_lending/
- SourceForge at http://www.sf.net is the best known and most widely used repository of open-source projects. Several OpenOffice.org ‘spin-offs’ are hosted there such as OOoExtras
- php - php Hypertext Processor - is a common open-source scripting language for web sites - see http://www.php.net
- Thanks to Bob Kerr for this list http://marketing.openoffice.org/servlets/ReadMsg?list=dev&msgId=1489564