Commercial Open Source Model View
If you are selling commercial open source software then this article would have some resonance with your present experience out there with customers and prospects. There are number of challenges around commercial open source software selling that warrants clear attention. Understanding these challenges will help address the arguments related to this model more effectively and help business leaders evolve the right set of arguments and demonstrate value of the commercial open source model.
Initiate the Uninitiated
A lot of organizations are not well versed with the commercial open source model or have limited understanding of the model.
The procurement of most such organizations is used to a license based purchase where an upfront license for software is obtained with annual maintenance.
Moreover, Open Source as free is a message that has stuck and one of the biggest roadblocks for a commercial open source sales team. When customers expect the software for free there is automatic competition with commercial open source models. Thus the uninitiated have to be initiated with the fundamentals of commercial open source model and why the model allows to pay for open source and generate all round value for the business.
Typical topics that need to be articulated are:
- Concept of Annual subscriptions instead of license sale
- Convincing the buyer on actually what he gets as part of annual support including the software product itself. Since the cost of the product as such is diluted in the argument, its sometimes difficult to bring out clearly the benefits that the support relationship will bring them. Most of them may not be used to these arguments.
- The case of renewal year on year (Why?)
- The value in the commercial open source buying process.
Explain the Value around the Commercial Open Source Model
Commercial Open source model is centered around the promise of:
- Better quality software due to its open source pedigree
- Excellent Support
- Regular product updates keeping the software up to date and available for no additional cost as long as the customer is under a commercial support cover.
- Quick Bug fixing
- Leveraging the community strength
To strengthen the sales team, the commercial open source organization requires significant investments in:
- Training around differences between Open source and commercial version
- Assist sales people in clear articulation of benefits and value in terms of “What extra does a customer get in an annual support subscription vis-a-vis the license model”. The sales people must understand the fundamental differences and be an authority on the subject.
- Invest in community growth structuring the case for the need for a commercial open source business that in turn fuels the community.
- Differentiate the open source community project from open source company. Explain the goals of both these setups clearly.
This is not easy. Understanding the commercial open source model and its intricacies along with the economics behind the model is very important while striking a conversation and handling objections. The commercial open source model has very well been described here in “Single Vendor Commercial Open Source“
Open Source through an identity crisis
We have been working on open source for last five years now. When we started out every trend and every simple news around Open Source adoption used to excite us tremendously. During this time Open Source trends were followed passionately and the hype around its use and ultimate dominance was never understated.
However Open Source has already won now. When you win what do you do. What is next for Open Source. How far do we continue to talk about the Open Source’ness of Open Source. Time has come to change its meaning. Evaluate what it stands for today and in future.
I remember a brief incident a few years ago while positioning Open Source model to a CIO. When told about the merits of the Open Source model he pondered and mentioned they had adopted it already in the shape of Linux, application and web servers. Then he mentioned about trying to understand how to use Open Source as if it was not being used. As if there was more to be done and was a great idea but they were not sure how to do it. I now look back and ponder on the reasons why he said so.
Most businesses use open source today or plan to induct open source alternative but Open Source today is an alternative for not one thing but many IT things. When one looks at the implementing it in one area the focus is on that particular alternative. The model has so many different options and choices available today that businesses don’t see it any more as a technology or a single entity. It is to them potentially a collection of several alternatives.
Therefore, Open source is going through an identity crisis. Its not LINUX any more and now its many things. Which one is it then?
Solving the Identity Crisis
Businesses and Vendors have to stop propagating what has already been said. The idea of Open source as a Choice is the closest definition I can think of which brings together the various facets to light. Ultimately Open source has to deliver results and when many results are possible it has to deliver each result in such a way that it meets the business need better than a proprietary model.
Open Source today is therefore a case of intersecting identities while its adoption grows unabated. Here are a few examples:
- Open Source is quite simply a CHOICE. Look for the best vendor to implement the choice and plan ahead to extract its benefits.
- Open Source is SaaS (Software as a Service) you use as a service and pay a monthly fee.
- Open Source is integrated and better set of software bundles that make your lead time to market faster
- Open Source is the next software platform that you will use for your mobiles to run your applications
- Open Source is the direction you will end up taking while designing your next software platform
- Open Source is the next integration API you will use to connect your disparate data sources
So here we are. Best way to end this identity crisis is to not get driven by multiple identities that exist but look at a set of wholesome trends today in the industry and see the hidden LINUX stories and case studies emerging in each one of them.
Well its already started happening !!!!
Businesses now look at open source very differently. A few years ago it was something about free software and low cost. Now its taking a much more serious shape and businesses are evaluating it as one of the options while buying IT. Generally speaking the element of source code being available is really not why businesses are attracted to it. Most businesses lack the skills to download the code and modify it for their own use (though the number of businesses that have now capability is steadily increasing !! thanks to the ease of software development today !!!). Therefore for any business open source is more about Choice.
Choice because now the options before the businesses are not limited to some proprietary vendor options. Choice also because among the proprietary vendors some of them have commercial open source software. Some choices are created also because business solutions are now freely available. WordPress blog to start a web site like this is an excellent example of how something as free can get your journalist tendencies flowing so smoothly.
Having said that Vendors are continually defining what they want Open source to deliver. Vendors are reacting to this by using open source to create new choices. Typically these can be categorised as:
- Open Source in a On Demand SaaS (Software as a service) or even aaS (as a Service models)
- Open Source in On Premise SaaS model.
- Open Source integrated in custom software to build platforms that give proprietary technologies used for development a run for money.
- Open Source in enterprise software including linux, virtualisation, and all the way up to the stack in terms of Business Intelligence and Content Management Systems.
- Open Source solutions in verticals that are OSS aligned such as Public Sector
- Open Source in database and even services such as Zoho (http://www.zoho.com) that allow users to create database applications quickly on demand.
- Open Source in Cloud
Clearly the choices are slowly being created and giving a plethora of options to any business of any size. However the legacy of the past and use of enterprise software in licensing terms is yet to be washed away. Most IT managers today making the decisions to buy IT are still aware of only the perpetual licensing models so unconsciously are restricting the new choices to be adopted through open source.
It is often said that only aggressive IT adopters today look at open source as a choice while most risk averse businesses do not use the Open source options due to its inconsistent maturity. However the lessons for these organisations are on the wall.
- Look for vendors that are cleverly inventing new things with Open Source. Google is a great example of the world’s greatest open source case study.
- Look for vendors that simplify open source for you. Forget the technical pitch of what open source technologies and frameworks they know about and can customize. Ask them what they have done with it and what new additions over and above the default community versions they have created. In summary what have they contributed back?
- Look for services that have been built purely on Open source and hide the complexity of underlying software. This shows the wonderful innovation that is hidden behind the offering. If a vendor has that degree of engineering behind them then surely they will be a trustworthy partner solving your complex problems.
Where is it all going?
My take is that the open source way of implementing choices is going where all natural choice creating phenomenon have moved in history. For example democracy is all about choices and now the ultimate expression of how nation state should speak in multiple voices catering to each actor within a state.
In a similar way, software democracy is on play. The level playing field is being levelled again. In this process it is creating new models and new vendors and new businesses.
One thing is clear that the future of IT to businesses through the open source way of thinking is very exciting indeed.