Is the LAMP shining on your online business?

Start up costs for an online business no longer require massive capital outlay as they once did. Lessons learned from the dot.com bust as well as the commoditization of hardware, bandwidth, and software have driven prices lower. The introduction of enterprise cloud computing and shift of data storage into the cloud has provided a viable alternative which is both efficient and cost effective.

Companies can now operate in a more cost effective way which helps to support lightweight and scalable business models. By choosing open source software as an alternative to commercial products along with cost effective marketing (network effect) and hardware means that there no longer needs to be big expenditure into large development teams.

Open source software such as LAMP which stands for;
* Linux (operating system),
* Apache (HTTP Server),
* MySQL (database software) and,
* Perl/PHP/Python
have allowed businesses to create application servers at virtually no cost.

iStockphoto the world’s original source for user-generated, royalty-free stock images, media and design elements was built on the LAMP stack. The below video is a preview into how iStockphoto works.

According to Patrick Lohr, the president of iStockphoto, one of the biggest drivers for the use of the LAMP stack was cost (Bradbury, 2005).

LAMP allows minimal capital expenditure prior to identifying what the potential return on investment (ROI) will be.

What businesses need to do is start out and test their business concepts in a way that gets them to market fast, with a proof of concept. It’s what some people call ‘fail fast’. If you have an idea that sucks, find out that it sucks fast. That is what the LAMP stack lets you do (Lohr, 2005).

Although iStockphoto which was started by Bruce Livingstone was totally free it has since evolved and developed a revenue model. This is something that came about as a result of the network effect.

By Livingstone providing his own material free for download it created a massive interest with web designers. Some of these designers began uploading images of their own. Livingstone then polled the growing iStock community to find out if people would support paying for images.

In 2002, iStock began selling credits. Now you could get a high-quality image for under a dollar, and the artist who contributed it got paid a royalty.

It was an entirely new way of doing things. Some people called it the birth of ‘microstock‘.

By maintaining reasonable user costs Livingstone encouraged participation, which in turn helped foster growth, community, and ultimately user generated data as part of an ‘Intel Inside’ data strategy. iStockphoto was designed with strategic and tactical choices which enabled future scaling as the business grew.

By creating a diversified revenue model, including subscription and premium services, companies can build long-term growth and stability as proven with iStockPhoto.

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