In case of Aras, it is like an Aras and Microsoft hand in glove. For every sale of Aras there is a guaranteed sale of Microsoft IT infrastructure like server and tools for developing utilities.

This strategy my find takers in some segment but not in majority of segment as the IT strategy of the manufacturing companies drive the technology and not otherway.

In fact, I think this is an underlying & unstated point in the NYT article that ‘open source business model is elusive’. Focusing heavily on building a big community is expensive.

It’s awesome to have a million developers doing things, but developers really don’t buy enterprise systems. Business managers / IT executives make purchase decisions.

We believe that to satisfy the requirements of global corporations necessitates delivering a PLM system that is fundamentally better that any of the others.

We focus first and foremost on making sure Aras is the most advanced product on the market… no exceptions. By doing this, people are finding us and the community is building slowly but surely… just like SolidWorks back in the 90’s.

MarcL
http://www.aras.com

However, we do believe strongly in the concept of community and my team is giving content back to the Aras community as we develop it. Aras has a share area on their website where members of the community can exchange solutions. The workflow I write for my business might not work in your business, but maybe one feature of it will. So the exchange between community members is going to be lower than something like Wiki, but it is still a community.

At the end of the day I don’t really care if Aras is open source or not. The licenses are free, the software works, and I can exchange ideas with other users. That model works great for us. The millions we save on PLM licenses each year can be invested more productively into product development and process improvement.

Open source, in its traditional form, is very much about a community, because the “product” is developed, maintained and enhanced for the benefit of the community, and ownership of the IP is in the public domain. Taken in that context, community size certinaly matters.

However, I don’t see this as an adequate description of what Aras is doing, and Andy’s comments re-inforce that. It might be more accurate to describe what Aras and others like them are doing as “open distribution”, rather than open source, because Aras takes its revenues and re-invests them into the product for the benefit of the community; the community itself is not making that investment in any great way. Rather, they (the community) are able to dedicate the vast majority of their expenses to the implementation of the “product” to their particular unique requirements, which may not have value to the larger community.

By breaking down the number one barrier to adoption within the PLM world – license costs – Aras is poised to turn the business model on its head, provided the model has staying power. In other words, as long as they can make a viable business from this new way of looking at the market, there is no reason to doubt that they will continue regardless of the community size.