Open source panel at Accel Symposium

Yesterday I was on a panel on open source at the Accel Symposium at Stanford. There were several interesting sessions on cloud computing, open source, and software as a service.

The consensus was that these technologies are all getting the attention of CIOs and IT directors who are facing budget pressure in this economy. After all, if you have to chose between buying $50,000 server licenses or having staff to develop and deploy applications, a lot more people will be willing to try open source. Not surprisingly, downloads of open source software is growing at an accelerated rate. There’s now top-down pressure to develop an open source strategy in even the most conservative and mainstream companies. No one is immune to the economic downturn.

While there were a few softball questions, it’s still helpful to take a step back and look at some of the key issues in what makes open source successful. The panelists had a combined 20-plus years of building open source businesses, which is a pretty good perspective to have. While there isn’t necessarily a cookie-cutter approach to building an open source business, at least a few lessons emerged.

• You need to consider the community as one of your constituencies, along with employees, paying customers, and investors
• You want to build on the momentum and goodwill of the community to drive adoption, but it’s not about trying to sell to the hardcore community. They are your evangelists. You need to operate transparently to earn the trust of the community.
• Find a way to distinguish between capabilities that businesses want and individual community members may not even care about. For example, Scott Dietzen mentioned e-mail features related to archiving and compliance issues are really only relevant to larger companies. And as he noted, community members will even support the the idea that if you need those features, you should pay.
• Recognize it’s a volume game. As Rob Beardon from SpringSource pointed out, you need to nurture and develop prospects; give them good content, white papers. etc.; and follow up. You need to respond to demand in a cost-effective fashion, not expensive missionary sales and proof-of-concepts.
• The sales and business model is very different from traditional enterprise model. John Newton from Alfresco mentioned that it’s sometimes hard for old-time enterprise folks to get their head around how different it is. But ultimately, you still need to make sure there’s a reason for companies to pay you. For mission-critical applications, many customers want to know that there’s a vendor who stands behind the product to make them successful.

But there are many different ways to skin this cat. There isn’t one single model for commercializing open source, and things will continue to evolve as the market expands. What worked in the past may not always apply in the future.