A couple readers both reacted my previous blog with more or less the same words: This is great, but what about the level of mission criticality of the use case? Surely you should count that as a third variable since it impacts the likelihood of a user becoming a paying customer?
So, yesterday I wrote about what the sales funnel looks like when selling open source software, compared to what it used to look like when we sold closed source software. In this post I will build on that theory with some practical conclusions. (I assume you've read the first post.)
Why modeling your business matters
When running a business we need to do budgeting and other planning related activities. If you don't, you'll probably run out of money at some point. Also the point of planning is to capture as much of the business potential out there as possible. For example, to sell 5MEUR next year, do we need 5 sales managers or 6? (...and, can we afford 6?)
Since I joined MongoDB it seems I have mostly been doing technical blogs. Yesterday I had a conversation with a long time friend from the open source database scene, which inspired me to jot down some observations on my long time favorite topic: open source business strategy.
In fact, this will be very much a Selling Open Source 101 blog. I've come to realize that while what I'm about to write is well known to open source oldtimers, those of us who were lucky to work at Red Hat and MySQL and other first generation open source companies, these ideas are not necessarily well known to many executives and sales managers working in open source today.
For reasons that I will blog about in a couple of weeks, several people last week asked me what I think about open core. My answer was that nowadays I don't care much about the topic. Long time readers of this blog might be surprised at such an answer, so I thought this was a good time to reflect on why I don't think it is very important anymore, and more importantly to document the empirical evindence that we now have about open core as a business strategy.
Here are the slides of the talk I just gave at Froscon. (Video should be available soon.)
I found a very interesting blog post today: Open Source IaaS Community Analysis. It is a statistical analysis into forum/mailing-list traffic of the 4 major private cloud open source projects: OpenStack, OpenNebula, Eucalyptus and Cloudstack. While I have never met or read anything from the author, qyjohn, it seems we actually worked at Sun at the same time :-)
For a casual follower - like me - of these four cloud projects, the post is interesting in many ways. But for anyone interested in open source business models it is very interesting indeed. Readers of this blog will remember my research from 2010: How to grow your open source project 10x and revenues 5x. The research showed that 9 out of 9 Xtra Large projects are all governed through foundations, whereas the best performing open source codebases owned by a single vendor have developer communities that are roughly 10x smaller. Based on this observation I made this recommendation:
In July I attended the Community Leadership Summit in Portland. This was the 3rd CLS overall and my second. The first one was organized in San Jose 2 years ago. I noticed there has been a small evolution between those two years (which might partly be due to geography too). The first one in San Jose I think was very successful and drew many de-facto leaders in the open source community, including Bruce Perens himself (author of the Open Source Definition). In Portland there was perhaps less of those, but instead you could see how the audience increasingly consisted of people who actually work as full time Community Managers for various businesses, or in some cases for a non-profit organization.
Slides from my talk at OSCON 2011 are now up on Slideshare: