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Perforce has played this game very well by setting up their own category called "fast source control tools". Speed is their differentiator, and they seem to be having a nice measure of success with this approach
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Understanding categories has been critical for SourceGear as we do business in the source control market. People sometimes ask us how we can possibly sell source control tools when CVS is free. The reason is that "open source" is merely one category in the source control space. This market has quite a few categories, and the competition across those categories is minimal. If the customer wants a workflow-based tool, they only look at the tools in that category. If cross-platform support is critical, the customer isn't paying much attention to the Windows-centric products.
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But do make sure there are enough of those people. Every difference defines a category, but not every category matters. For example, suppose you want to create the number one IDE for programmers who develop enterprise accounting software in Forth. I daresay you won't encounter much opposition in your effort to win this category. However, you won't encounter much revenue there either.
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