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Prepared by: a. Pritish Sinha

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Case Name: Open Source: Salvation or Suicide Problem Statement The primary question of the case is: Should KMS "Open Source" their electronic music game? And why should they do this?

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Background a. Describe the company/department 1. History i. ii. iii. Founded in 2004 Focus on in-house development of a music software A very successful firm an innovator that had dominated the market KMS is into mass marketing of its flagship software product that deals with music making using computer Amp Up was the name of the product that KMS launched and it became an instant hit. The software code was closed Company is facing still challenges because of open source revolution Good programmers to build software Lead by Marty Dirweg who has good marketing experience and leadership skills COO is an efficient in pursuing people and getting things done Proud of the IP of its software A robust software that is developed and tested inhouse Good network of loyal customers Operational overheads are outsourced to minimize

2. Conditions i. ii.

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3. Culture i. ii. iii. iv. 4. Strengths i. ii. iii.

capital cost iv. i. ii. Association with Z3 band enhances the brand Highly protected software and code is not accessible to users A strong open source community that has built similar music software which is available for free with options to modify code 5. Weaknesses

b. Describe the industry situation 1. Customers i. ii. From all across the globe who can not only product great music but can work together Rapid growth of customer base initially but they are now also attracted to open source software Other proprietary software firms Open source software movement Retain the niche and quality seeking customers Serve the high end users with sophisticated software needs Open source can ease burden on programmers Open source adoption might save coding time Open source movement had led to creation of similar music software and objects that looked like Amp Up Axes
a) Free software now available b) Code is open and any one can modify it based on his/her needs c) Open source initiative is increasing and user and getting attracted to it d) Exclusive partners now performing with Open source products

2. Traditional Competitors i. i. i. ii. iii. iv. 5. Threats i. 3. New market entrants 4. Opportunities

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Not clear about the future of IP protected software Expensive lawsuits against infringers causing financial strain

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Key Issues a. Issue #1: How should KMS deal with the "Open Source" movement that is hurting its electronic music gaming business?

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Relevant Areas, Facts, Conclusions a. Relevant areas for Issue #1 1. Protecting Intellectual Property i. KMS has developed a proprietary software in-house and the CEO is reluctant to give away the companys crown jewel Company is wary about incorporating random codes into the product which is also not tested Open-source software doesnt have any earning model for companies CEO is concerned about the protecting the amount of efforts programmers have put in to developing this software Conclusion: Sometimes customers are not happy about rigid software rules that is imposed on them because of the closed software architecture

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b. 1. Market impact i. ii. iii. iv. The market is drifting towards adopting open source software. Bands like Z3 that advertises for KMS are also seen adopting open source technology in their performances. KMSs view of market has to change in order to keep pace with the changing environment Pricing the product will be critical as customers will expect a greater value for their investment in form of services Conclusion: Market dynamics has changed considerably because of the open source movement. Both developers and customers are supportive of this idea. This has impact the business of traditional proprietary software players

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c. Development Impact i. ii. iii. Software programmers are generally happy with sharing codes and indulge in a collaborative environment Free flow of knowledge and information saves time and effort Conclusion: Open-source is supported by the technology work force. But this approach is not profitable since it cuts the revenue scope of a company,

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Recommendations a. KMS must redefine its target market 1. Market dynamics has changed and so should the marketing strategy 2. Need to identify a target market whose needs an open source software cannot carter 3. Need to get into niche category with an excellent support service to make a point of differentiation b. KMS must allow its software to become open-source 1. This will ease the development process 2. Make the customers happy by bring down the wall 3. Help retain the loyal customers who would not want to switch as they have built their system around KMS software c. KMS must target niche customers 1. Customers who have special support requirements are the best customers. 2. KMS should develop products around the needs to these customers who would be able to pay for a premium software with bundled service.

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