Knowledge == value

I heard some wise words yesterday in a discussion over a new business venture. “If you know more than your customers and you know more than your competitors, you should be fine.”

I’ve really been struggling to come up with a justification on how you can still make money in the tools industry. There is such a rich set of open source freely available tools that developers can easily download and adopt. And no matter how you spin it, those free tools cut into the value proposition of a traditional commercial tools offering.

But that’s why it so important to focus your investment on unique knowledge areas that you have or can acquire. Developers still face very difficult problems that free and open source tools won’t solve for them. And that’s where the money is still to be made.

But the converse is also true. For a complete tools solution, you still need the entire stack. And for those things where knowledge is common place, which have the least value (sorry), working in open source is really the only way to keep the costs down to match.

Engineering is expensive. Having the right open source strategy is critical to ensure your business is successful. And that strategy needs to be continuously updated. What you might think is unique knowledge today could become common knowledge tomorrow and you need to have a transition plan to keep above the line. It’s certainly a lot of work, but it needs to be done.