WTP Economics in Java

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WTP Economics
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The preceding discussion addressed the cost half of the equation It should be clear now that vendors can reduce development expense by adopting WTP, and that for WTP to be sustainable, vendors will also have to contribute resources to WTP How can vendors generate revenue from WTP The following revenue streams are some of the main opportunities: commercial products, commercial plug-ins, application servers, customer support, application development services, training, mentoring, tool development services, and tool management services Let s now explore these in more detail
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Commercial Products Based on WTP
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The simplest way for a vendor to generate revenue from WTP is to create a commercial product based on it This is the approach that most vendors will adopt initially because it is the traditional way to generate revenue Commercial products that are based on Open Source software are often referred to as distributions The vendor packages the software in a convenient form, and often adds components and customer support to it Vendors can differentiate themselves along many dimensions, such as the additional components they add, the quality of their customer support, the price, the range of the operating systems they cover, their sponsorship of the Open Source community, and so forth Of course, vendors will have to add significant value to compete with the freely available version of WTP Also, users may want to combine plug-ins from different vendors in a common installation of WTP rather than having multiple stand-alone installations Nevertheless, many customers are used to buying fully integrated products and may be more comfortable dealing with a vendor in the traditional way Such customers may not even be aware that their vendor has adopted WTP as the base
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Many customers will be satisfied with WTP as a starting point but require additional plug-ins to complete the solution The scope of WTP is restricted to Web and J2EE standards, so support for popular technologies such as Struts, Spring, and Hibernate must come from elsewhere The decision to focus on standards in WTP was intended to encourage vendors to innovate in the nonstandard areas Vendors can generate revenue by developing commercial plug-ins that extend WTP Individual plug-ins will undoubtedly command a much lower price than traditional IDEs This is a high-volume, low-margin business model Vendors will probably sell their plug-ins through online stores in order to reduce sales expenses Eclipse includes an Update Manager that allows additional plug-ins to
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CHAPTER 2 About the Eclipse Web Tools Platform Project
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be easily installed Vendors can exploit the Update Manager to deliver extensions on top of existing WTP installations Imagine finding some cool new plug-in at a vendor s Web site, entering your credit card number, and clicking a link to download and install it in your WTP installation The benefit to developers is that they can easily buy and install exactly what they need, when they need it, and from the supplier of their choice
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J2EE Applications Servers and Middleware
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As mentioned previously, many vendors derive more of their revenue from the sale of J2EE application servers and related middleware such as databases, message brokers, and so forth than from tools Such vendors have a vested interest in the success of J2EE as a programming technology If the market adoption of J2EE increases, then the pie grows and each vendor can grab a correspondingly larger slice of it This is sometimes referred to as the drag effect Vendors will invest in a low-profit product, such as a J2EE IDE, if it drags along the sale of high-profit products, such as J2EE middleware The market adoption of a technology such as J2EE depends on many factors, but among the most important are the availability of applications and a skilled labor pool for developing them Customers often consider the cost and availability of skilled labor when selecting a programming technology Some excellent technologies have literally priced themselves out of the market because the small developer pool could command very high wages The free availability of development tools is a key contributor to the growth of the developer community By funding the development of WTP, J2EE vendors are investing in the growth of the developer pool Ideally, WTP will even be used in universities and community colleges to teach J2EE development This will result in an abundant source of J2EE professionals WTP can therefore, in part, be cost-justified as an extension of the developer relations program of J2EE vendors
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