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FITT Toolbox: Open Source Business Model
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FITT Toolbox: Open Source Business Model

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The presented case study is about Siruna NV, which has developed software for real time deployment of mobile websites through a dual Open Source business model. Although this model is not widely …

The presented case study is about Siruna NV, which has developed software for real time deployment of mobile websites through a dual Open Source business model. Although this model is not widely adapted, this model can be easily copied as far as it helps to cover development costs by the help of a large and free developer community, helps to market the product, quickly, sets a reference in a rapidly evolving market and succeeds in creating value within an open source setting.

www.FITT-for-Innovation.eu

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  • 1. Open Source Business Case FITT– Fostering Interregional Exchange in ICT Technology Transfer – www.FITT-for-Innovation.eu Except where otherwise noted, this work is licensed under a Creative Commons Attribution 3.0 License.
  • 2. Practice in General  Siruna NV has developed Software for development of mobile websites through a dual Open source business model  Nature of reusability: this model can be easily copied as far as it helps to cover development costs by the help of a large and free developer community, helps to market the product, quickly sets a reference in a rapidly evolving market and succeeds in creating value within an open source setting.  Case is mostly generic  Quality/Nature of stakeholders: High tech start-up company, starting form research results  Processes related to case: business model, IP management2 | 03/2011 Open Source Business Case
  • 3. How we can help you open themobile experience.
  • 4. Who are we?
  • 5. About Us The experts in web-to-mobile: Make Anything Mobile Professional Open Source company Venture Capital backed startup Located in Belgium | UK | US | India | UAE | China 5
  • 6. : the leading OPEN SOURCE platform and managed SOLUTION provider for mobile web applications
  • 7. Internet is everywhereCONTENT USER experienceWEB App’s
  • 8. Nice USABLE stuff … Mobile News Mobile Search Mobile Portal 8 (POWERED BY SIRUNA) (POWERED BY SIRUNA) (POWERED BY SIRUNA)m.deredactie.be m.goldenpages.ie m.zita.be (STANDARD WEBSITE) (STANDARD WEBSITE) (STANDARD WEBSITE)www.deredactie.be www.goldenpages.ie www.zita.be
  • 9. Open vs. Closed Source OPEN SOURCE CLOSED SOURCE  Revenue from services  Selling software licenses  Source code is publically  Source code protected as available « Copyleft » intellectual property  Source can be adapted /  Customer can’t get the improved source code  Development by a Development inside the community company The business models are linked with the license model: •GPL/LGPL business models •BSD/Apache models •Multi license business models: Dual license
  • 10. Customer value
  • 11. First Generation BusinessModels Revenues are generated through support, consulting, Services based training, documentation A free OS product is used to create a market position for Loss leader the traditional commercial software. Vendors as IBM, Apple, Novell, Oracle.. realize that OS provides a way to compete against Microsoft because: Fight competition • They can reduce R&D costs • Eliminate dependencies on competitor’s technology • Of the access to a large, external development community Example: instead of competing with Symbian, Motorola committed to OS 11
  • 12. Siruna OSS strategy Is NOT to create a large developer community  Can be a side effect  We control it through the Contributor License Agreement. (CLA) Disruptive business model  People can try the code, see the internals  They buy what they like (quality)  They can modify the code for their customer  Create a developer/user pull 12
  • 13. Dual Licensing  Product available under a regular commercial license for commercial customers and under a free software licence (AGPL) for those who live by the principles of free software  The product is technically identical under both licences, but the financials and the legal ramifications are different  It is up to the customer to decide what path he wants to follow and what licence to use but restricted by our policy & commercial strategy.  MySQL AB, Sleepycat Software & Trolltech AS use dual licensing Siruna is the copyright holder
  • 14. Copyright of SirunaNecessary condition for dual licensing.Gives us rights and protection  We decide what license is used by who: • Commercial • AGPL  We can introduce “golden lines” or credentials. Our “golden lines”  Adapted for Mobile by Siruna  Google Analytics transformer insert 14
  • 15. Affero GPL licenseGPL license:  Everything that touches it becomes GPL (viral)  If you redistribute a GPL software package, you need to publish your code  Service provider loopholeAGPL license:  Closes the MSP loophole  Software distribution & network access 15
  • 16. OSS Sales Funnel 16
  • 17. OSS Marketing 17
  • 18. Open Source Trends By 2010, Global IT organizations will use OS in 80% of infrastructure investments and in 25% of business software investments (Source: Gartner). OS impact on infrastructure SW is 20 B $ growing to 46 B $ in 2011 OS infrastructure SW 16.000,0 14.000,0 12.000,0 OS DBMS 10.000,0 AD 8.000,0 Security AIM 6.000,0 ITOM 4.000,0 Others 2.000,0 0,0 2004 2005 2006 2007 2008 2009 2010 2011 (Source GIMV ) 18
  • 19. VC activity  Increased VC investment in OS:  2005: 294 M $ was invested  2006: 475 M $ was invested, up 61% from 2005 (Source: Computer Business Review, Feb. 2007)  Why do VCs invest in Open-Source?  The increased adoption of OS by corporate users.  Attracted by the success of Red Hat,:  Marketcap of 3.8 B $ and .. profitable!  Revenues increasing very fast: 200 M $ in 2005, 280 M $ in 2006 and 400 M $ in 2007  Belief that there could me more money made from OS than from proprietary software  Lower cost of development  Also lower cost of sales & marketing due to the viral effect of the dvlpt community  OS leads to better quality assurance, more frequent releases, community dvlpt (Source GIMV ) 19
  • 20. M&A activity  Recent deals:  There were 35 transactions  There were 3 significant transactions; • Sun acquiring MySQL for 1 B $, EV/S of 14.3 x • Yahoo acquiring Zimbra for 350 M $ (email collaboration), • Nokia acquiring Trolltech for 153 M $, • Citrix acquiring Xensource for 500 M $ • RedHat acquiring JBoss for 350 M $ (Source GIMV ) 20
  • 21. OSS Facts & Figures MySQL – Database vendor  Founded in 1995.  Challenger for Oracle, Sybase, ..  External VC in 2001:  Revenues • 2002: 6,5 Mio Revenue • 2005: 34 Mio Euro • 2006: 50 Mio Euro  Exit 2007: Sun acquiring MySQL for 1 B $,  2009: Oracle acquiring Sun OpenBravo – ERP vendor (GIMV investment)  Founded in 2003. (Univ. of Navarra – 2001)  External VC in 2006: 4 Mio Euro from SODENA  Revenue 2007: 1,1 Mio Euro  External VC in 2008: 9 Mio Euro  Target 2008: 3,3 Mio Euro  Target 2010: 24 Mio Euro (requiring 15 Mio Euro investment)21
  • 22. Contact UsFRANK GIELEN, CEOZuiderpoort Office ParkGaston Crommenlaan 10/1019050 Gent, BelgiumTel +32 (0)9 331 48 36contact@siruna.com 22