What’s the path to Open Source Application Success?

Few days ago, Derek Singleton of Software Advice has published a post on his blog on the failure of open source ERP applications in gaining mainstream acceptance.

I’m not dealing with OSS ERP (Enterprise Resource Planning), but I know something about OSS application acceptance (the best known example is SpagoBI, in the Open Source Business Intelligence domain).

Derek raised many questions, starting with: what OSS is in OSS applications? Well, now I don’t want to enter the never-ending debate about open core and pure open source or business models based on open source. I agree with Derek when he says: “businesses aren’t buying open source enterprise application”. Just a little update: I prefer to add “so much” to this sentence because, under the pressure of the current economical crisis, the attention to (and purchasing of) open source applications is growing.

I’m focusing on the three points outlined by Derek.

1. Enterprise Application are Sold, not Bought.

I have already used a similar expression in 2009, when I contributed to writing a book in Italian, in which I said [translation from Italian language]: “open source introduces a new model that is basically different from the usual approach pursued by sales of proprietary products: it’s user-pull, instead of sales-push. In other words, “open source is bought, not sold”.

The main difference between proprietary and open-source applications is that the former refers to marketing and sales, while open source refers to communication and support. The enterprise market is still dominated by a “proprietary attitude”, characterized by a major focus on software products rather on software projects [to learn more about project-centric model instead of the product-centric one, have a look at this document] and on the vendor’s affirmation/reputation in the specific market.

Derek says: “the best product rarely wins in the enterprise apps market”. I agree. However, I would use “not always” instead of “rarely”. This happens not only with OSS: it concerns the whole IT market. In fact, the best sales and marketing usually win, because people’s choice is not only based on the functional and technical features, but it also involves economical, relational and psychological characteristics.

This not a good reason for stopping pursuing your strategy or for stopping doing what you think is valuable. Affirmation of enterprise open source applications that are functionally complete, open designed, open developed, innovative and full supported may be a long way, asking you for taking patience but granting sustainability.

2. Capitalists Make Poor Contribution

Community contributions are central to the open source model”. Fine, but it raises one more question: which is your community? Time ago, Simon Phipps posted a big picture of Open Source Community Types. Following his position, the community beside an open source enterprise application is made more by users/deployers (or extending co-developers at least) than by developers. This means that goals, incentives and emotional involvement deals more with partnerships than with the foundation of community relationships.

I agree on the fact that the model changes when “business people enter the picture”. This is typical for all enterprise applications oriented to specific business domains, not just ERP. Listen to this story: in 2005, after the first release of SpagoBI, an open source community blog referring to this announcement, posted something like: “Hey guys, it’s free software, but it’s about business intelligence. Hmm, business … keep off!

3. Application Development Requires Domain Expertise

Business people are less likely to contribute”. I agree once more. But the issue is not that contributing developers “move beyond their comfort zone”. It’s about a different community, as I argued before.

You must deal with right communication to the right people, providing both correct information on the enterprise solution and fostering open relationships and partnerships. Honestly, it’s not so easy (in the capitalist market), but it works.

Finally, Derek asks: “is there a path to open source application success?”

Sure. I’ve not the formula for success, but I can tell you my story.

Avoid traditional venture capital. It’s my story. Some VCs  suggested to start-up a company adding their funding. Good idea, but now I have no professional investor to satisfy in the short term.

Seek out strategic investors. It’s my company: Engineering Group. SpagoWorld is a working unit inside Engineering Group, acting like an open source producer and vendor (with its own budget and profits to reach every year). As Derek’s suggestions, Engineering Group is the corporate investor, representing “patient money”. SpagoWorld contributes back domain expertise and profits, providing the open source ecosystem at large with important contributions, too.

Focus on commodity functionality. SpagoWorld is an initiative providing full open source enterprise applications. SpagoBI is free software at enterprise level. Also SpagoWorld approach is free as a speech, adding commercial activities based on support services to allow the sustainability of the developments. This is to say that every producer/vendor must design his own affirmation strategy and maintain it over time. Dealing with enterprise applications, you have to face all the abovementioned challenges. We have a lot of work to do, mainly in understanding the community – made of users, partners, supporters, contributors – and in supporting it. It is a never ending story, but it’s a huge part of the open source applications success.

Leverage the Cloud. It’s just a component of the affirmation strategy. Cloud is cool and business-friendly. We must work on cloud. For example, SpagoBI is not only working with Open Source Cloud Initiatives, but it’s also going to launch its own cloud offering soon.

What else?

In my article “Which open source software for the current decade? Five questions for the future.” I wrote: “I wonder why the market, the analysts and the different benchmarks estimate the OSS success on the basis of traditional elements (revenues, marketing effort, commercial support), less considering the aspects related to innovation. At this point, my question is: why aren’t open source solutions evaluated on the basis of their innovation rate?” Moreover: “We cannot expect any radical market change and the analysis based on economic/financial aspects will not easily be abandoned. At this point, my question is: which approaches and real opportunities do we have to adopt in order to lead the business and technological innovation towards a new knowledge intensive way of producing and living?”.

There, I left the answer open, talking about pre-adaptation. If you feel it is a non-effective philosophical approach, don’t worry. What you can do now is: love your job, be transparent and honest, foster trustworthy relationship, communicate your results, and deliver good applications, grant full support, innovate the market.

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