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World Computer Congress Keynote
 

World Computer Congress Keynote

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Keynote by Fabrizio Capobianco of Funambol at the World Computer Congress 2008. The talk is entitled 'A Successful Business Model for Open Source Systems'

Keynote by Fabrizio Capobianco of Funambol at the World Computer Congress 2008. The talk is entitled 'A Successful Business Model for Open Source Systems'

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  • Definitely intriguing. I may have a follow up getting ready in an adjacent field.... We'll talk!
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    World Computer Congress Keynote World Computer Congress Keynote Presentation Transcript

    • Funambol A Successful Business Model for Open Source Systems Fabrizio Capobianco, CEO
    • What is Open Source?
      • The Source is Open
      • It is mostly licensed with a copyleft clause
      • It is a community effort
      • It is NOT free
      • To create a successful business around an open source project you need:
        • A huge market
        • A commodity market
        • A large community
        • A price cushion
        • A reference implementation of an open standard (optional but useful)
      Not every project is a business
    • OSS business models
      • Generally associated with the different licenses:
        • GPL/LGPL business model: pure service model, where revenue comes from professional services (OSS + Services)
        • BSD/Apache business model: revenue originates both from license fees on ad-hoc software reselling and professional services
        • Dual licensing business model: revenue relies mainly on license fees
    •  
    • OSS dual licensing
      • No cost for open source or personal projects
        • Widespread use and testing of the software
        • Fast growth of a large installed user base
        • High quality, stable and reliable products
      • A commercial license, which releases companies from requirements to publish their source code
        • Freely copy, modify and redistribute, protecting your IP
        • Full guarantee on the product future thanks to source code visibility and access to a wide community of developers
        • Freedom from vendor lock-in
        • Rapid and complete support
    • OSS “honest” dual licensing
      • Two different communities
        • Open source users
        • Commercial users
      • No bait-and-switch
        • Keep the communities isolated
        • No features are hold from the open source community, if they make sense and would be needed there
      • “ Do not upsell your community” guideline
        • Do not sell anything to your open source community
        • Nope, do not even sell them support (it gets your hands dirty and you cannot call back a salesman when you launch him/her towards a customer…)
    • The future is SaaS
      • The world is moving toward Software as a Service
        • First consumer email (Hotmail)
        • Then enterprise sales force automation (Salesforce.com)
        • Then consumer content (Youtube, Flickr, Facebook…)
        • Soon all enterprise email, driven by mobile
        • Then everything else, consumer and enterprise
      • Every single software service will be consumed over the network (think 2015, not tomorrow)
        • Even word processing will be hosted. Google Docs is here to stay, so is Office Live. More to come. The dream of the network computer is going to materialize, eventually
        • Google Chrome is a critical element of the SaaS world. It is an operating system running an highly optimized language (Javascript)
    • The business model of the future
      • Honest Dual Licensing with AGPL
      • A market for your Community Edition
      • A revenue model for your Hosted Edition
    • Open source is key
      • There is no question about it, I believe it is proven: it is just a better model to develop software that brings incredible quality and invaluable savings
      • You just have to be careful not to screw up your relationship with the community
      • The game is tight-rope walking, a.k.a. funambulism
      • Honest dual licensing is the way
        • Guarantees a scalable business (no scale in professional services businesses)
        • Maintains a positive relationship with your community
    • AGPL is the license
      • AGPL v3 is the ASP version of GPL v3, a FSF license approved by OSI
      • It protects your project from being used as a service, circumventing copyleft, because there is no distribution of software
      • The ASP loophole is the cancer of open source
      • “ Do not be dumb, give it an A”
    • A market for your Community Edition
      • It has to be different than the one where you are going to make money
      • You are NOT going to make money here, but you will get all the benefits of a big community
      • That market - in most cases – should be the enterprise.
        • Not every enterprise
        • Those companies that value the source code in open source
        • That want to touch it
        • Those that want to deploy open source in house
    • A revenue model for your Hosted Edition
      • Deployed vs. Hosted is the key to Honest Dual Licensing
      • Service Providers that want to provide your software as SaaS will license the Hosted Edition of your code (with additional software, only meant for the hosting use)
        • Even Enterprise will pay for it, because it will be convenient
      • Maybe, you could run it yourself, instead of selling it to Service Providers
    • Where will the revenues come from?
      • Software usage (e.g. per user per year, based on bandwidth consumption or a similar model)
        • Recurring revenues are sustainable (and the market likes them)
      • Advertising (the software is free, the ads pay for it)
        • Advertising is what made the Internet Companies
    • The Funambol case
      • Honest Dual Licensing
        • Community Edition based on AGPL
        • Carrier Edition for SaaS
      • A market for the for your Community Edition
        • Enterprise use Funambol Community Edition for free, no features hold back from the commercial product
      • A revenue model for your Hosted Edition
        • Service Providers license Funambol Carrier Edition to host it as SaaS, either on a per-user per-month basis or with advertising
    • Who else is doing this?
      • Today: Funambol ;-)
      • Potentially: SugarCRM, Zimbra Yahoo and many others
      • With evil variations: Google
      • Perfect case: Salesforce.com
      • Getting intrigued: Microsoft
      • Future: everyone (wasn’t the title of the presentation about “A successful business model”?)
    • The business model of the future
      • So… this is how to make a sustainable business model using open source in the future SaaS-dominated world:
      • Honest Dual Licensing with AGPL
      • A market for your Community Edition
      • A revenue model for your Hosted Edition
    • Funambol A Successful Business Model for Open Source Systems Fabrizio Capobianco, CEO