Business Model, Part 1/4
A new generation of...
...Open Source business model.

In only 4 years, we developed the most
popular enterprise management
(*)
software ever made.
This document describes the 2009
Open ERP business model. It explains
how we achieved such a success.
It also reflects my vision on how to develop
(*) 700 installations per day.
Open Source products efficiently.
Fabien Pinckaers, CEO Tiny

We think Open ERP can sustain
his incredible growth only if we
suceed to benefit from...

The Community: to generate activities, provide
●
huge feedbacks, and specific contributions.
The Partners: to create the market, offer value
●
added services and professional marketing.
The Editor: to follow a product vision, offer
●
guarantees, support partners and communities
to help them grow.
The Customers: to finance this eco­system,
●
provide feedbacks and experiences.

These 4 actors are very important. If
one is missing or unsatisfied, the
product can't achieve the growth
and quality we expect !

As an editor, our goal is to provide the
tools to continuously satisfy, help and
sustain: the community, the partners
and the customers.

We set up incentives and tools to sustain
this business model. They rely on:
Marketing: websites, screencasts, success stories,
Documentation: users' doc, community guide,
Contracts: partner contracts, training contracts,
Platforms: forum, launchpad, irc,
Services: quality certifications, support, SaaS, etc.

This document does not describe these tools,
but how they will sustain the business model.
The next 3 parts describe the business model
and how it will impact:
The Community
The Partners
The Customers

Business Model, Part 2/4
A business model that...
... fits partners needs.

Our Goal is...

To develop a business model that
leads you to the top while supporting
the growth and establishing a
professional partner­editor
relationship to sustain this growth.

The way we want to do business
1. Get Leads
(using Units)
2. Resell Editions
(get Units)
3. Use Support &
Trainings
(using units)
4. Increase Partner Level
(starter > platinium)

Get Leads...
In 2009, we're going
to improve:
Lead Generation
Program
Marketing
And invest in:
Direct Marketing
Web Campaigns
=> To focus on
qualification of leads.

... Sell More
Our goal is to provide more customers to efficient
partners. The more you sell, the more we
provide you leads and pre­sales support.
Editor
$
Marketing Pre­Sales Sales
Partner

Resell Editions...
Editions = 2nd level of
●
maintenance
(1st level = partner support)
Guarantees on:
●
Migrations
●
Bugfixes
●
Security issues
●
Lifecycle
●

... Limit risks & cut costs
By reselling editions to the customer, you get:
● Guarantees from the editor (migration, unlimited bug
fixes)
● 15% commissions
● 10% as units for services
● Increased partner level:
starter ­> silver ­> gold ­> platinum
You can also resell in another way than the editions (your own package
including your 1st level of maintenance)

Avoid Hidden Costs
Maintenance contracts prevent you from all hidden
costs: Take bugfixes and migrations at your charge,
buy units for the support, leads, etc. (instead of
receiving them)
Who offers what?
● Sales
Partner
● Support to customer
● Support to partner
Editor
● Maintenance

Modules Quality Certification
What's the module quality certification ?
180 functional & technical tests of your module
Benefits :
Feedback document: (notes, suggested improvements, notes for
●
migrations, guidelines, etc.)
Quality certificate for your customer
●
Press announcement of your contribution
●
25% of commission (money + services)
●
Available in OnDemand offers and guaranteed maintenance in next
●
editions

Quotations
Include Editions & Certifications in your quotations
Analysis
–
● Functional Coverage
● Modules to re­use
● Modules to develop
● Integration Plan
Developments
–
Certification of custom modules
–
Trainings
–
Partner support + maintenance custom modules
–
Editor 2nd level maintenance for official modules
–
...because it has to be paid by customers, not by partners.

Get Support and Trainings...
Use your units (from editions and
certifications) to get, for free:
– Support: on your customer projects
1 hour = 100 Units
●
– Trainings: for your teams or
customers
1 training = 450 Units
●

... to reach perfection
Develop yourself and support new employees
●
Satisfy your customers
●
Improve your quality of service
●

Partner Relationship
Your activities reflect your quality:
Editions Sold => Customers Success Stories
–
Quality Modules => Good contributions
–
Trainings => Better Partner Knowledge
–
The partner level reflect the partner activity:
Starter ­> Silver ­> Gold ­> Platinium
–
Levels are re­evaluated every 3 months !

Our Goal...
The more you do on Open ERP,
the more we work to help you to grow
Starter
Sell More (Leads)
Improve Code (Certif.)
Communicate on Quality
Limit Risks (Maintenance)
Provide Support
Better Visibility
Platinum

Summary
Resell editions and certifications to customers
●
Get services units
●
We provide the services you need (support,...)
●
Partners do not buy direct services,
everything is paid by the customer !
Service Paid By
Projects
Leads From Points
Open ERP Edition Sold to Customer
Custom Certifications Sold to Customer
Bugfixes Included in Editions
Migrations Included in Editions
Support From Points

Conclusion
This is a scalable model, where:
Provided support, visibility and services grow
according to the partners' activities.
The editor has incentives to help partners in their
sales and customers projects, in the long term.
Partners benefit from customer's specific
requests. Editor benefits and spread the costs of
generic improvements (maintenance).

Any question about
partnerships ?
Contact our partner manager:
Mail: partners@openerp.com
Phone: (+32).81.81.37.00

Business Model, Part 3/4
A business model that...
...fits customers needs.

Our goal is...

Provide an environment, an offer of
products and services that tend to
satisfy our customers...

Provide an environment, an offer of
products and services that tend to
satisfy our customers...
... and those of our partners.

What are
customers needs ?

A Strong Product...
Easy to use, with productivity
Covers most needs
With a strong maturity
At low costs

A Good Service...
A quality supplier
Avoids vendor lock­in
Guarantees for the future
Value added services partners

Why our business model
brings perfect solutions to
these needs ?

A Strong Product...
Easy to use, with productivity
As an Open Source editor, we focus on simplicity and
accessibility of the software. Simply because users installs
Open ERP directly, without purchasing anything. They only
call a partner if they like Open ERP.
Having hundreds of feedbacks per day in the community
forum is also very important to reach perfection !

A Strong Product...
Covers most needs.
The Open ERP modular system allows us to never refuse
contributions due to editor policies. Every new feature is
packaged and published as an official or contributed module.
With the others Open Source ERP's, the editor is in
permanent conflict with the community and the partners:
● The editor has to be very restrictive on the features he
integrates to keep a consistent product and,
The community or partners does not understand why their
specific contributions are not integrated.
=> Open ERP has 350 modules and 10 new modules per month.

A Strong Product...
A strong maturity
Open ERP have 700 installations/day. The « On Demand »
offer runs hundreds of customers. It means we are on a
mass market. Without a strong maturity we would not have
launched an On Demand offer:
On Demand requires: automated migrations, easy
use because customers start without help, full
automatisation, customizations, ...
We are the only ERP having an official On Demand offer !
It's the best proof of maturity we can provide.

A Strong Product...
Low costs
The Open Source license guarantees you are free to :
● Use without paying
● Not have yearly recurring costs
● Modify and copy the software
Result:
● 25% cheaper for the integration project
● 70% cheaper for recurring costs

A Good Service
Quality Value Added Suppliers
Our business model define incentives to continuously
improve the quality of our partners:
● They resell editions => The editor's guarantee
● The more they have customers, the more we provide
them trainings and support
We have tools to control and help them improving their
services:
● Modules Quality Certification
● Starter ­> Gold ­> Platinum

A Good Service
Avoids Vendor Lock­In
With our Open Source license:
The one owning the
code is you ! not
the supplier !

A Good Service
Guarantees for the future
Guarantees are provided by the editor to satisfy
customers needs in the long term, through the
editions:
● Unlimited bug fixes,
● Fixed Price Migrations,
● Maintenance,
● 5 Years lifecycle.

Want to be a
customer?

How to proceed?
1) Discover Open ERP
Install It
Read documentations, check openerp.tv
2) Get in Touch with a Partner:
Contact on OpenERP.com
Partners will recontact you
Or contact a partner Directly
3) Ask for a prototype/analysis
4) Launch the Project
5) Maintenance contract

Select the Right Partner/Solution
Choose the right approach:
● Integration Project: services, custom adaptations,
specific development, data recovery, methodology
● On Demand (OdOO): low costs, ready to use, no
customization, few support hours, do it yourself
Choose the right partner: silver or platinum ?
Size / Need Out­Of­The­Box Few Adaptations Specific Solution
<15 users OdOO, Buy Online OdOO + training/partner /
15 – 100 users OdOO + Partner Integration with partner Integration with partner
100 – 500 users Integration with partner Gold or Platinum Gold or Platinum
>500 users / Gold or Platinum Platinum

Why trust our partners?
They are PROFESSIONAL !
They have a contract and a strong relation
with the editor.
The more they make quality, the more they
become gold or platinum.
Our partner contracts include trainings,
support, frequent meetings.
The editor provides guarantees.

Why Editions ?
These editions provide you
the guarantees you need to
run Open ERP in a
professional environment.
Guarantees on:
Migrations
Bugfixes
Security issues
Lifecycle

Modules certifications
You need a new specific module? With the
modules certifications, we can guarantee:
A good integration with the future versions of Open
ERP.
A high level of quality in the code developed.
An offer for maintenance
Your module will be reused by others, so it will benefit
from others contributions.

Conclusion
Our business model does not define any
constraints, but only incentives ! As everything
is free, we know it's the customer that controls
the game...
Our success is financed by customers. That's
why we focus on improving our services and
those of our partners.

Business Model, Part 4/4
A business model designed...
... for the community.

It's very important to have a strong
and active community. The more we
offer to the community, the more the
community will make for the
product.

What does the
community
need ?

The Community needs ...
Everything for free (no need for services)
●
Easy access to the software
●
An Out­of­The­Box software
●
Never be forced to purchase anything
●
Tools to sustain collaboration and
●
communication
And, ... like every one on this planet..., being
listened.

If everyone works this way, the
community will contribute
efficiently:
● Help in translations,
● Contribute new features,
● Provide feedback and bug reports,
● Communicate on the product,
● Help each others.

And this will lead to a very fast
growing curve of the product:
Increased maturity (lots of testers)
●
● More features (tons of contributions)
● Smarter product (lots of discussions and critics)
● Huge spread of the product (they
communicate)

We want to achieve the best
enterprise management software
in the world. To achieve this
perfection, we push everything to
the community.

The Problem:
We need a way to provide incentives to
customers and partners so they tend to
contribute everything they make.
By default, most enterprises do not
contribute to open source projects. If
incentives are strong enough, they will.

Release every module as Open Source
Our license (GPL v3) forces every modification of the
software to be open source.
As to motivate enterprises to distribute their code, we
provide maintenance on open source modules.
To motivate partners to contribute, we offer services to
partners (support, training) for each quality certified
module released.
The more a partner contributes, the more it becomes
“Gold” and get visibility on our website ­> get customers.

Easy access to the software
All our english documentation is free.
To encourage authors to write translations or new
chapters, we have contracts with editors to sell paper
books and pay author rights to contributors.
To help people or enterprises to start with Open ERP,
partners provide services offers (trainings, support). We
provide the training material to partners.
We focus on the simplification of the software: simplified
views, tooltips, configuration wizards, auto­installers, ...

An Out­Of­The­Box Software
Our professional editions provide quality services to
customers: unlimited bugfixes, migrations,etc. These
contracts guarantee that the improvements are applied on
the public sources on Launchpad.
All improvements in the software requested by a customer,
are pushed back to the community. So, community can
benefit from a very mature and fast improving software.
To the contrary, all improvements proposed by the
community are reviewed by our quality team so that others
can benefit from it.

Never be forced to purchase anything
The GPL license is the best protection the community can
have. It guarantee:
● You can always get the sources of the software,
● You do not pay to get the sources,
● You are free to distribute, use and modify.
As the CEO of Tiny, Open Source is all my life and my
passion. Trust me, we will never do something that do not
fit the “Open Source” mind.

Tools to collaborate and communicate
As to help the community to grow efficiently, we setup tools
to organize the collaboration: launchpad (code, translations,
bug tracker, answers), forum, irc, planet, etc.
The Open ERP website is dedicated to customers and the
Open Object website is dedicated to the community. Both
websites are based on the same software, but it allows us
to offer different tools and communications.
As an example, the Open ERP planet is managed by
marketing guys for a professional communication. The
Open Object planet is fully open, every contributor can
post.

Being listened
The community provides a very good feedback on the
software and on the communication/organization.
This feedback is very important to achieve a perfect tool,
we read it every day. Just have a look at how often
managers at Tiny or partners are discussing on the forum
and/or IRC.

Conclusion ­ Community
Once a month, we organize IRC
community meetings with the Tiny
management. Join us at one of these
meeting to discuss on how we can
collaborate more efficiently...

And It Works !
I started alone 4 years ago, with 1000 EUR.
Today, we are self­financed with:
85 employees,
●
A partner network in 35 countries,
●
The most advanced ERP in the world.
●
With our Open Source vision, we never had to
do a fund raising and we continue our
organic growth of 100% per year !

Need more
information ?
Everything is available on
http://openerp.com