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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'

Published in: Technology, Business
  • 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

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