Whenever I give advice to people about what to look for in a collaborative tool, I tell them to steer clear of anything that is based on a licensing model where the organization has to buy a license for every person in the organization, preferring instead to look at open source alternatives.
If you combine the 90-9-1 rule with a proprietary licensing arrangement (as I have in the info graphic above) you can see why: the return is only about ten cents on a dollar.
Let’s consider the following:
- 500 person organization
- Enterprise wide solution at $130/license
Making the total cost to the organization $65,000
The participation breakdown within in a organization of 500 people is approximately:
- 5 heavy contributors
- 45 intermittent contributors
- 450 non contributors (lurkers)
Therefore the approximate cost breakdown under this model is:
- $650 spent to enable heavy contributors
- $5,850 spent to enable intermittent contributors
- $58,500 spent to enable lurkers
The production breakdown within this model is:
- 1% producing 90% of the outputs
- 9% producing 9% of the outputs
- 90% producing 1 % of the outputs
Overall licensing is cost neutral but with significant differences:
- Licensing heavy contributors is highly cost effective because they produce at a 1:9 ratio.
- Licensing intermittent contributors is cost neutral because they produce at a 1:1 ratio.
- Licensing lurkers is cost burden because they produce at a ratio of 9:1.
Looking over this example, it is no surprise why I recommend against engaging with vendors that use per user licenses as a distribution control. The model absolutely breaks down when you look at participation models. I personally think there are two caveats worth discussing from here: (1) what does this mean for vendors and in house resellers and (2) what is the value of lurking.
Terrific way to envision the ROI. What about licensing based on set levels of participation? Such as free for ten users, $20 for 11 to 50 users, and on up.