Relationships: Key to getting buisiness
Over the holiday weekend, I was discussing with a few friends the reasons why our customers hire and continue to use our respective firms. One friend owns an advertising firm providing advertising and design services to Fortune 500 companies. The other has a wholesale business, selling to large retail companies. Both clearly agreed with each other that the relationship is the key reason why customers bought from them.

I agree, but what establishes the relationship? Most customers buy because they trust the company, the products or services and/or the people they buy from. Relationships are born out of trust between organizations. Even in a firm with high transaction volume, trust is established from product or service quality. Regardless of why or how, without trust, a relationship will deteriorate. But trust can be fickle; one simple misstep can cause trust to evaporate, potentially creating enough FUD (fear, uncertainty and doubt), opening the door to competitors. Think Bear Stearns. Trust with their trading partners evaporated overnight despite adequate capital reserves beforehand ($17 billion). Essentially, the FUD caused a virtual run on the bank, perception became reality, and employees and shareholders paid dearly as JP Morgan bought up the assets cheaply.

Trust plays a huge role in keeping customers over the long-term.  
And, trust is built based on delivering above and beyond what’s promised and expected. But, what role does it play in establishing the initial relationship? In open source software sales cycle awareness shrinks for open source software vendors, so there’s less time to establish trust prior to the initial transaction. So, in this instance trust needs to be built on product or service differentiation, which open source establishes in cost, transparency and freedom of choice. However, as the CIO of CorraTech’s largest customer pointed out to me last night over dinner, he said that CIO’s don’t lose jobs over spending too much money or creating little flexibility (clear benefits of open source software), but they do lose jobs over not meeting delivery promises to the business. Proprietary software vendors that have the perceived stability through proven longevity clearly have advantages here; at least for the short term.

Add the benefits of Open Source and provide value
Beyond the hype around open source, it is still a mere blip on the screen of most large company CIO’s. As a percentage of IT budgets, open source has a long way to go—or more optimistically, grow. For my company, CorraTech, although about to achieve more than 80% revenue growth in the second quarter this year, we’ll continue to be patient, as we see the market quickly coming towards us. We believe we are in the right place; establishing the right relationships with an innovative business model, ready to help organizations willing to take the risk to invest in open source software. Why? Beyond losing ones job, there is truly organizational value to be had --- and frankly, value will always prevail once realized.