Microsoft can roll out countless studies that point out how proprietary software is cheaper and more practical than open source code. But how can Microsoft counter open source software's ability to make a Japanese woman give birth to a horse in a convenience store?
That's the question being raised by Japanese software pioneer SourceNext. The company has launched an astonishing advertising campaign featuring a horse, famous actress Norika Fujiwara and a couple of Slurpee slingers to promote StarSuite - Sun Microsystems' Japanese Office knock off based on the open source OpenOffice. In one television ad, Fujiwara is so overcome by the $18 StarSuite price tag that she pops out a foal near the magazine rack of a corner store.
"We convey a concept of our $18 strategy as surprising and moving in the ad," said Nori Matsuda, the president and CEO of SourceNext. "The ad basically says, 'Anything can happen.'"
SourceNext started in 1996 with a limited software portfolio. The company, however, managed to attract a lot of attention quickly with a typing tutor game that led to more than $7m in revenue by the end of 1997. Since that time SourceNext has added hundreds of software products to its lineup and should cross the $100m revenue mark this year. The company currently claims 23 percent of all Japanese software shipments - beating out Microsoft and Symantec - and 8 percent of software revenue.
One of the keys to SourceNext's success has been the use of flamboyant advertising. What says cheap software better than an attractive woman birthing a farm animal? It beats the hell out of a tubby man in a butterfly costume.
The other secret is SourceNext's unorthodox sales model. StarSuite is just one of 150 products that SourceNext sells on a $18 per year subscription model. This low price has allowed the company to tap sales channels its rivals can't match. Unlike most software makers that are confined to computing-related stores, SourceNext sells its wares in book stores, convenience marts, home improvement stores, toy stores and movie rental shops. In total, SourceNext software is available in 25,000 locations throughout Japan.
"We are the only company with a price low enough to reach these markets," Matsuda said. "We call it our commodity strategy, and, if Microsoft continues to sell Office for $500, it can't compete against our model."
Along with flashy ads, SourceNext uses unique packaging. It chucked out the massive software box common on retail shelves and went with a standard DVD case. This saves shelf space and packaging costs and lets consumers chuck the software in their backpack or briefcase.
SourceNext has managed to tempt people buying candy bars and condoms to try out a cheap office suite or Adobe Acrobat knock off. It has, for example, moved 200,000 copies of StarSuite since it started selling the product in February. Other products include anti-virus software, map software, mobile phone software and soon enterprise software such as Java development packages.
SourceNext's dominance in the Japanese software market has allowed it to become a type of clearing house for foreign companies. When Sun needed a partner for StarOffice/StarSuite, it turned to the retail giant. Now Oracle will follow suit on the enterprise software front, Matsuda said.
We can only hope that as SourceNext builds out its enterprise business it can maintain the same advertising flair. Wouldn't it be something to see Larry Ellison pass a goat? ®
Thanks to SourceNext for providing us with the following translation of the commercial.
"Sourcenext products are just 1980 Yen?! Oh, my Goodness....!" She faints suddenly. A guy rushs to her and says, "She is having a baby!" Everyone looks at her anxiously. The guy says, "Now, the baby was born!" And for no special reason, she had a colt. It tries to rise unsteadily to its feet. "Oh! It stands up!" Everybody is moved.