It is hard to shut up the analyst voice inside my head.

Last night I went to the movies to see “There Will be Blood” (Which was, probably intentionally, short on blood but long on amazing performances especially by Daniel Day Lewis. I highly recommend the film.) and when I went to the concession stand, I was hit with an odd realization.

The way that movie concession stands tend to railroad users into an upsell is very similar to the vendor lock-in model we try to debunk at SugarCRM.

What I mean is that apart from being irrationally over-priced (like most proprietary software) the sizes of popcorn, soft drinks, etc. is inherently designed to force customers to consider the upsell. For example, a tiny bag of popcorn was $4.50, but a much larger bag was only $5.00. The idea being that only an idiot wouldn’t upgrade to get nearly twice the popcorn for a nominal upgrade fee. But really, this is customer railroading and essentially price fixing and creates a disconnect between customer choice and value-received.

That is why I like open source software so much. The value received to total cost is much more in line in the application space. Take SugarCRM’s Module Builder concept, given away for free in our open source Community Edition, as well as our commercial editions. Users can test this functionality, create modules, new applications, etc. OR decide not to use it and their subscription price is the same. With a product like Salesforce.com’s Apex code, the cost of entry is inherently high- to even decide if Apex applications can and will work for your organization - one must invest time to learn proprietary closed-source code,a s well as pay extra for subscriptions for Unlimited Edition, etc.

To keep the movie analogy going…it is like the closed-source vendors are the popcorn and the soft drinks…while the new, cooler open source vendors are those pay by the pound candy displays in some theaters - expanding customer choice and matching value received to price paid.

There are countless other examples, but ideally more organizations will demand more value-based pricing from their software suppliers. Then SugarCRM’s pricing model will be more the norm, and not a breath of fresh air.