The document discusses the rise of Open Adoption Software (OAS). It defines OAS as software that is openly built by developers and partners, freely adopted by frontline developers, and embraces proprietary additions. The key drivers of OAS include powerful contributor networks, the need for speed and control, and users taking an "open-first" view. Many companies are now using OAS to remodel their IT stacks from the floor to the ceiling. OAS companies can enjoy rapid adoption through communities and become valued at billions, serving both tech and non-tech companies. The document outlines the typical phases and funding stages of OAS companies.

1. The Rise of Open Adoption Software, OAS

2. What is Open Adoption Software (OAS)?
open · adoption · software
/ˈōpən/ noun
software that
1. is openly built by a network of developers, end users and ecosystem partners;
2. is openly and freely adopted by frontline developers who can become potential
customers;
3. is embracing of proprietary, valued-added bits to help users get the most out of their
software;
4. is now the foundation for how enterprises think about IT
a definition

3. what’s giving rise to OAS?

4. A change in requirements and attitudes
there’s a real shift in how end users think about and adopt technology
innovation through
networks
developer power everything’s web-scaleneed for speed (& control)
powerful contributor
networks and web-based
communities are driving
steep innovation curves.
open projects spring up
around critical-mass pain
points and attract
thousands of contributors
users are taking an “open-
first” view of the world,
driven by a newly
empowered front line
developer who pulls best-
of-breed solutions off the
shelf
the requirements of today’s
global, web-scale applications
dwarf the capabilities of
traditional software vendors;
many open projects are
founded from these exact
challenges with scale
IT leaders need to move
faster than traditional
vendors allow, while
having the freedom to
touch and modify code on
the go — minimizing
unknown dependencies

5. Mgmt,Security,Analytics
A redrawing of the enterprise IT stack
Storage, Networking, Compute, Web Server
Data Management
Application
Storage, Networking, Compute, Web Server
Data Management
Application
we’re seeing a floor to ceiling remodel using open adoption software (OAS)
Mgmt,Security,Analytics

6. Break open tech and non-tech companies alike
and you’ll find they both adopt and contribute to open technologies
Hundreds of billions in equity value built on the backs of open adoption software and technology.
These CTOs and CIOs are all thinking “open first”

7. can OAS companies be real + independent?

8. Enjoying steeper adoption curve
paid customer count**
Downloads* of
2010 2011 2012
200,000
400,000
750,000
3300
201120102009
2300
1400
* Github & public estimates
**Splunk S-1
Not all users are created equally; but OAS
can rapidly find itself in mission-critical
production environments, without ever
having to talk to a procurement department
Users/Downloads/Installs
open adoption software spreads much faster than proprietary counterparts

9. Mulesoft
OAS companies are scaling quickly*
from founding, to $100m ARR — they don’t look dissimilar from their software counterparts
y0 y1 y2 y3 y4 y5 y6 y7 y8 y9 y10
WDAY SPLKCRM
Cloudera
$100m
ARR
Acquia
*Source: filing company 10-Ks, Accel estimates, press release mentions
Github
Tenable
NOW

10. $20b+est. private + public
equity value of OAS
companies today
(excl Red Hat)
200+
11OAS companies valued
above $1b**
*Black Duck OPENHUB Project Statistics
**Accel, Crunchbase, Mattermark, Tracxn
10
**
unique OAS technology
startups that raised
funding over last decade
30+
unique venture capital
firms investing in OAS
companies last 3 years
$7b+
cumulative venture
dollars in OAS
companies, 2016
By the numbers
OAS vendors receiving meaningful VC support over the past few years

11. OAS: the next wave in software
Application/Client ServerMainframe SaaS Open Adoption Software
MarketReach/Innovation
Each phase enjoyed easier deployment and end-user distribution
more widely distributed and driving greater IT value than anything before it

12. how are OAS companies constructed?
(answer: it’s different, but luckily, there are some good frameworks emerging…)

13. A later starting line
traditional saas/proprietary software timeline
start company
identify customer
pain points
build products
iterate towards
product-market fit
scale
go-to-market
drive customer
success
retention/
expansion
open adoption software timeline
create an open
project to solve
critical technology
pain
build community
of like-minded
developers
determine customer
interest in similar
pain points /
TAM
start company
build value-added
products
harvest early
community adoption
retain +
expand
OAS companies start well after market proof points have emerged

14. Phase II: Product
Definition & Packaging
Nail all three phases in sequence to build a long-term, durable business
Phase I: Project
Community
14
Phase III: Profit
Scale & Go-to-Market
How do we build a high-
energy, organic community,
while ourselves becoming the
leading voice/brand behind
the project?
How do we leverage inbound
support/services
engagements to help define
product requirements and
core customer needs?
How are we filtering through
our community adoption to
hone in on mature users,
while going to market with
our proprietary, value-added
products?
Three P’s of OAS companies
almost all OAS companies follow these three “phases” en route to independence
Founding, Seed, Series A Series A, B, C Series C, D+

15. Phase II: ProductPhase I: Project Phase III: Profit
Open Dev Product Dev Sales Marketing Open Dev Product Dev Sales Marketing Open Dev Product Dev Sales Marketing
$Investments
R&D: heavy community development phase
• Ignite the contributor base (deep and wide) through open
development
• Become the defacto project steward: are we the driving
technical voice in the community?
S&M: brand marketing
• Grassroots, developer evangelism via content, forums
and Slack
• Sharing new use cases — what’s possible now that
wasn’t before?
• Aim to be leading brand and authority associated with
the open project (eponymous)
15
R&D: ramping product development + support
• Centralize key contributors within your org
• Leverage inbound service and support requests from early
adopters to help organize broader community efforts and
shape a shared roadmap
• Identify customer pain points that can be solved with
value-added proprietary products
S&M: building the pipeline, ramping sales efforts
• Sustained community marketing and use-case evangelism
• Marketing starts going beyond front-line developers, to
include key business stakeholders
• Service and support requests form the basis of an early
sales pipeline for value-added products
• Crisp view of what a production customer looks like
R&D: product development at scale
• Open development reaching steady state
• Major efforts around proprietary products that extend
the value of the underlying project
• Deepening hooks with prevailing cloud vendors
• Building out necessary integrations with partners
S&M: sales effort at scale
• Beginnings of a repeatable sales playbook
• Targeting accounts that are production-ready and have
expansion opportunity
• Marketing becomes more business-centric and
solutions-oriented
• Verticalizing sales efforts to sell project + products
against industry needs
Each phase has its own set of inputs…

16. Go To Market: “selling” (TAM) vs. “harvesting” (TAC)
“Selling” motion = concerted
outbound effort to find customer n+1
… and get them to deploy product
Repeat sales / Referrals
Prospecting via TAM
Initiate Contact
Identify Needs
Present Offer
Manage Objections
Close Sale
Traditional Enterprise SW Sales Process
Total Addressable Community (TAC)
User Acquisition Cost (UAC)
User Conversion Cost (UCC)
active project users
deployed in production
Subset of Paying
Customers
What’s Different for OAS
“Harvesting” motion = sorting through highest
priority opportunities among of community of
existing users

17. A few things to remember…

18. Being “open” is not the be all, end all
still need great teams, strong execution, and a large market — not all projects will become companies!
To come out on the other side, focus on the core inputs to OAS company
building
Big markets
Strong teams
3 P’s
Funding
Mission-critical
use cases
Hadoop
Mule
Mongo
Drupal
Cassandra
d3.js
Chef
Puppet
Salt
Kafka
Budget

19. The cloud plays a BIG part here!
public clouds will power a lion share of OAS — find differentiated and unique areas to add value!
Cloud vendors will offer plain-vanilla
distributions out of the box; developers
can quickly spin up, and other non-
power customers get many simple
needs met
Power customers with complex
workflows and critical LOB applications
will elect for pure-play vendor
distributions, paying for capability and
control
As applications deepen and become
more mission-critical, customers
purchase products to further drive-value
— well beyond scope and reach of the
public cloud players
Bare-bones project, offered as-a-
Pure-play distributions from OAS vendors
Value-added products from OAS vendors
Director
AnyPoint
Developertoenterprise
tomorecomplexSimplerequirements

20. investors in a spectrum of software categories:

21. Thank you!
Ping Li ping@accel.com
Jake Flomenberg jake@accel.com
Vas Natarajan vas@accel.com