Joomladay Nl 2009 - Business Models

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If you're in any way working professionaly with open source applications this presentation is for you. It explores the business mechanics behind FOSS and try to defuse a number of common misconceptions and false-truths that exist about doing business in open source and especially with Joomla.

Technologie Business

Why Freedom makes
for a better business
model
Johan Janssens, Director, Nooku.org

Joomladay NL, June 2009 - Nieuwegein

"Success consists of going from failure to
failure without loss of enthusiasm. “

Winston Churchill

Johan Janssens - http://www.nooku.org

Freedom

Johan Janssens - http://www.nooku.org

Crowd Question

Open source is free (gratis) as in free beer ?

Answer
NO
Johan Janssens - http://www.nooku.org

Freedom doesn’t mean free of charge !
vrij ≠ gratis
fri ≠ gratis
frjáls ≠ ókeypis
vapaa ≠ ilmainen
frei ≠ kostenlos
libre ≠ gratuit
freedom libre ≠ gratuito free
of speech libero ≠ gratis
dror ≠ chinam
beer
azad ≠ rayegon
aazad ≠ muft
swatantra ≠ vina mulya
shadhi nata ≠ bine poisha
sudandram ≠ ilavasam
svobodnoe ≠ besplatnoe

Johan Janssens - http://www.nooku.org

Freedom success stories

Success story Freedom
eBay Trade
Google Advertising
Skype Telephony
Second life Social life
Youtube Video production
Linux Operating system
LAMP web applications
Ikea Furnishing
Joomla Websites
Johan Janssens - http://www.nooku.org

Open Source

Johan Janssens - http://www.nooku.org

Crowd Question

Open source is a business model ?

Answer
NO
Johan Janssens - http://www.nooku.org

Free / Open Source Software
• Not a mystery
• Not a religion
• Not a charity
• Not anti-commercial
• Not against ownership
• Not socialism
• Not a business model

A smarter way to produce the software
and a smarter way to distribute the software

Johan Janssens - http://www.nooku.org

Pursuit of Software Freedom and Proﬁts

Success in open source requires you to serve

1. Those who spend time to save money

2. Those who spend money to save time

Differentiation drives the compelling reason to buy,
but incorrectly implemented it may also drive the
”compelling reason to abandon”

Johan Janssens - http://www.nooku.org

Open Source business models are hybrid

Software is free, but:

1. … we need donations and subsidies to survive(Apache
Software Foundation, Eclipse, ObjectWeb)

2. … we sell ads and placements (Mozilla)

3. … if you embed it in closed source, you pay a fee
(Trolltech, DB4Objects, Funambol, MySQL, etc.)

4. … services are for a fee (Covalent, Ubuntu/Canonical)

Johan Janssens - http://www.nooku.org

Open Source business models are hybrid

Software is free, but:

5. … on-going maintenance, monitoring and provision of
binaries is for a fee (Red Hat, JBoss, MySQL)

6. … some enterprise features are for a fee
(SugarCRM, Zimbra, JasperSoft)

7. … we built a closed-source product around it
(EnterpriseDB, GreenPlum)

8. … hardware is for a fee (Sun, Asterisk/Digium)

Johan Janssens - http://www.nooku.org

Open Source business models are hybrid

Software is free, but:

9. … we sell everything else on the planet, including
closed source software (IBM)
10. … that's not our real business (Ruby on Rails,
individual contributors, etc.)

11. … we regret it (Borland with Interbase)

12. … we don’t want to see it any more (any good
examples?)

Johan Janssens - http://www.nooku.org

Open Source business models are hybrid

Software is free, but:
13. … we want to drive web trafﬁc (Yahoo YUI)

14. … since we bought Sun and now we are stuck with it
(Oracle)

Johan Janssens - http://www.nooku.org

Joomla!

Johan Janssens - http://www.nooku.org

Crowd Question

Joomla is not a product, it's a project ?

Answer
YES
Johan Janssens - http://www.nooku.org

Barriers to Open Source adoption

1. Lack of formal support and services.
2. Velocity of change.
3. Lack of roadmap.
4. Functional gaps.
5. License types.
6. Lack of endorsements

open source projects generate software, they do not
generate ‘whole product’

Johan Janssens - http://www.nooku.org

The Open Source principles

1. Free as in ‘Freedom’ Not ‘Zero cost’
2. Principle of ‘Openness’
3. Principle of ‘Transparency’
4. Principle of ‘Early and often’
5. Expectation of ‘Community’

The community is a byproduct of the project. The
project is a byproduct of the open source principles.

Johan Janssens - http://www.nooku.org

Crowd Question

Is there a Joomla business model ?

Answer
YES
Johan Janssens - http://www.nooku.org

Commercial Open Source - The Beekeeper

Johan Janssens - http://www.nooku.org

Commercial Open Source - The Beekeper

Johan Janssens - http://www.nooku.org

Summary

Johan Janssens - http://www.nooku.org

Summary

• FOSS business won’t work unless you serve both
those who spend time to save money and those who
spend money to save time

• Open source projects generate software, they do not
generate ‘whole product’. Commercial open source
does.

• It is early and the FOSS industry is still experimenting
with business models

Johan Janssens - http://www.nooku.org

Questions ?
http://www.twitter.com/johanjanssens

Johan Janssens - http://www.nooku.org

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Joomladay Nl 2009 - Business Models

1. Why Freedom makes for a better business model Johan Janssens, Director, Nooku.org Joomladay NL, June 2009 - Nieuwegein

2. "Success consists of going from failure to failure without loss of enthusiasm. “ Winston Churchill Johan Janssens - http://www.nooku.org

3. Freedom Johan Janssens - http://www.nooku.org

4. Crowd Question Open source is free (gratis) as in free beer ? Answer NO Johan Janssens - http://www.nooku.org

5. Freedom doesn’t mean free of charge ! vrij ≠ gratis fri ≠ gratis frjáls ≠ ókeypis vapaa ≠ ilmainen frei ≠ kostenlos libre ≠ gratuit freedom libre ≠ gratuito free of speech libero ≠ gratis dror ≠ chinam beer azad ≠ rayegon aazad ≠ muft swatantra ≠ vina mulya shadhi nata ≠ bine poisha sudandram ≠ ilavasam svobodnoe ≠ besplatnoe Johan Janssens - http://www.nooku.org

6. Freedom success stories Success story Freedom eBay Trade Google Advertising Skype Telephony Second life Social life Youtube Video production Linux Operating system LAMP web applications Ikea Furnishing Joomla Websites Johan Janssens - http://www.nooku.org

7. Open Source Johan Janssens - http://www.nooku.org

8. Crowd Question Open source is a business model ? Answer NO Johan Janssens - http://www.nooku.org

9. Free / Open Source Software • Not a mystery • Not a religion • Not a charity • Not anti-commercial • Not against ownership • Not socialism • Not a business model A smarter way to produce the software and a smarter way to distribute the software Johan Janssens - http://www.nooku.org

10. Pursuit of Software Freedom and Proﬁts Success in open source requires you to serve 1. Those who spend time to save money 2. Those who spend money to save time Differentiation drives the compelling reason to buy, but incorrectly implemented it may also drive the ”compelling reason to abandon” Johan Janssens - http://www.nooku.org

11. Open Source business models are hybrid Software is free, but: 1. … we need donations and subsidies to survive(Apache Software Foundation, Eclipse, ObjectWeb) 2. … we sell ads and placements (Mozilla) 3. … if you embed it in closed source, you pay a fee (Trolltech, DB4Objects, Funambol, MySQL, etc.) 4. … services are for a fee (Covalent, Ubuntu/Canonical) Johan Janssens - http://www.nooku.org

12. Open Source business models are hybrid Software is free, but: 5. … on-going maintenance, monitoring and provision of binaries is for a fee (Red Hat, JBoss, MySQL) 6. … some enterprise features are for a fee (SugarCRM, Zimbra, JasperSoft) 7. … we built a closed-source product around it (EnterpriseDB, GreenPlum) 8. … hardware is for a fee (Sun, Asterisk/Digium) Johan Janssens - http://www.nooku.org

13. Open Source business models are hybrid Software is free, but: 9. … we sell everything else on the planet, including closed source software (IBM) 10. … that's not our real business (Ruby on Rails, individual contributors, etc.) 11. … we regret it (Borland with Interbase) 12. … we don’t want to see it any more (any good examples?) Johan Janssens - http://www.nooku.org

14. Open Source business models are hybrid Software is free, but: 13. … we want to drive web trafﬁc (Yahoo YUI) 14. … since we bought Sun and now we are stuck with it (Oracle) Johan Janssens - http://www.nooku.org

15. Joomla! Johan Janssens - http://www.nooku.org

16. Crowd Question Joomla is not a product, it's a project ? Answer YES Johan Janssens - http://www.nooku.org

17. Barriers to Open Source adoption 1. Lack of formal support and services. 2. Velocity of change. 3. Lack of roadmap. 4. Functional gaps. 5. License types. 6. Lack of endorsements open source projects generate software, they do not generate ‘whole product’ Johan Janssens - http://www.nooku.org

18. The Open Source principles 1. Free as in ‘Freedom’ Not ‘Zero cost’ 2. Principle of ‘Openness’ 3. Principle of ‘Transparency’ 4. Principle of ‘Early and often’ 5. Expectation of ‘Community’ The community is a byproduct of the project. The project is a byproduct of the open source principles. Johan Janssens - http://www.nooku.org

19. Crowd Question Is there a Joomla business model ? Answer YES Johan Janssens - http://www.nooku.org

20. Commercial Open Source - The Beekeeper Johan Janssens - http://www.nooku.org

21. Commercial Open Source - The Beekeper Johan Janssens - http://www.nooku.org

22. Summary Johan Janssens - http://www.nooku.org

23. Summary • FOSS business won’t work unless you serve both those who spend time to save money and those who spend money to save time • Open source projects generate software, they do not generate ‘whole product’. Commercial open source does. • It is early and the FOSS industry is still experimenting with business models Johan Janssens - http://www.nooku.org

24. Questions ? http://www.twitter.com/johanjanssens Johan Janssens - http://www.nooku.org

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