Posts Tagged ‘open source’

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Can Day Software Propel Adobe Towards a More Open Business Strategy?

July 30th, 2010

As most involved in the broad content management market, I’ve seen the news of the week: Adobe acquires Day Software, the hot WCM vendor.

I have known and respected Day for a while: they deliver neat technology, have a clean business model and contribute significantly to open source. Plus, I appreciate the people I know from there.

Waking up on Wednesday and seeing the news starting to pour in my tweet stream was a big surprise. I thought about it a bit over the breakfast. My take: great for them, I know some people in the industry are going to hate it, but won’t be change much for Nuxeo and for the open source projects Day’s people are leading. So sent some congrats, a dinner invite, and went on my day waiting for the analysis and industry reaction overview from our great CMO later in the day. Which, in turn, confirmed my take. All good, move on. :-)

I’ve been asked a few time about my opinion and gave it. Until the last time when I thought “but what if Adobe doesn’t follow the Day way?”. Because many people have talked about Adobe closing more of Day’s technology and I don’t buy it. Developers working on the open source project are well respected, they will continue to work on those projects be it for Adobe or for an other company. So that wouldn't be a problem.

The question that started puzzling me is: What if Adobe goes onto a more open way? First reaction: That would be huge!

Imagine, for a second, that Adobe open source the whole CQ5 product. You have:

  • CQ5, great WCM software considered as one of the best in its category (the best?), available as open source

  • Day’s team, a team that knows how to ignite and lead communities

  • Adobe’s marketing war machine to let the world know

You get a winning product, with the capacity to transform the WCM market. By commoditizing this technology, Adobe would hit hard its competition in the WCM market. Despite the fact that it would unify some of the opens source WCM crowd, EMC/Fatwire, Autonomy/Interwoven, OpenText/RedDot/Vignette/Obtree and friends would be under heavy attack.

Adobe could concentrate on monetizing global service offerings: Omniture, Livecycle, end-to-end workflows for medias, acrobat.com on steroids, more online services, etc. Commoditizing the core WCM technology would keep the competition busy and let them make money where they hardly have any meaningful competition, innovate more with new services spanning and leveraging the wide reach of their offerings. We also would see an ecosystem thrive on CQ5, providing the ignition — for free — Adobe needs to enter the market. Kinda the Google way, after all.

Actually the more I think to this and after having read Adobe’s plan for Day, I think it’s the best way to achieve it. If they truly want to create a platform for customer engagement management, this is the way. This is how the industry builds big platform nowadays, by open source software.

All this for a mere $240M and -$50M in revenue addition. That would be the slam dunk that Laurence Hart doesn’t see coming! :-)

Am I crazy enough to think that Adobe will execute this? No. And I haven't thought all this thoroughly. But that would be really fun to watch! :-)

Onto some real work now,

EB.

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Posted in ECM, Open Source, Software

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Business of open source: my take on “open core”

April 1st, 2010

The “open core” debate has been around since the inception of the model itself, and gained significant adoption among so-called “commercial open source companies”. The debate is heating a bit these day, and I got inspired by 2 recent blog posts from Brian Prentice and Matt Aslett. I advise to read both posts to understand the reactions bellow. :-)

I think a lot about business models leveraging open source as it’s what makes our business run and I’m deeply convinced that “open core” is fundamentally flawed. This conviction has been formed by real world observations: running a real business for several years now. And I’m happy to see high-profile analysts reach the same conclusion with a sharper analysis and better process! :-)

About Sales & Marketing Savings

James Dixon from Pentaho argues — not suprisingly — that open core is the right model because it reduces the sales and marketing costs to distribute the software. And that might be true. But it is not linked to open core neither to open source, intrinsically. It’s linked to the internet distribution model and the rise of the web as a way for new and small companies to become known.

I would also add that I think the open core market is less powerful as a distribution model than a freemium (or free trial)-one based leveraging proprietary software. The reduction in sales and marketing spend is more related to the online distribution of the software than the open source aspect of “a software core”. So, of course, when you distribute a software online, you have to make it easy to install (hence improve packaging compared to traditional proprietary offerings). But it is really linked to internet-enabled distribution, not to the open access to the source code of the software.

Atlassian (or Skype) might be the flagship of success for this model… without being open source at all (but while contributing to it)!

About the “open core” model

With an open core model, you have to exclude/remove features (hence value) from the open source software to in order to preserve your business: you could be forced to even limit innovation in the open source branch because it could damage your business. It does not leverage any benefits that should be derived from the open nature of the code — which is the very core aspect of open source. It only leverage free distribution not the open aspect of the source code.

I would add that a subscription-based model (where subscription is for maintenance and support services) is superior on the long-term because it drives the company to align and organize itself around the value created for its customer. The more the customer deploy and benefit from the software, the more revenue goes to the vendor. So I think it’s a great way to align vendors and users on the same value stream.

Also, using an open source license does not require free download (advocated by open core users): RHAT is, I think, considered as the most successful company in the open source world. Yet their software is not freely downloadable, while 100% open source.

Hybrid?

I read a lot about “hybrid models“, based some blend of proprietary and open source software, to justify/support an “open core” model. I don’t believe in this at all. Of course, proprietary software is not going away anytime soon. It’s a valuable and proven business model that works and can deliver value to customers when properly applied. Same for open source: it’s here to stay for good. But the “open core” model offer no long-term benefit for customers: it just blurs the real value of open source for them, only leveraging the distribution channel it implies for the vendor benefit.

I believe in clear business models. Successful companies use clear business models because that’s what enable trust from customers. Open core is not one of them: there is no clear line between open source / proprietary, neither serious justification for the customer. Open core is just the good old proprietary model, nothing new here. All vendors uses open source software today!

From a higher perspective, I believe that the whole IT market is moving toward service-based approaches — SaaS paved the way — because it aligns customer value with vendor revenue. That’s why we — at Nuxeo — won’t use the open core model even if it could increase short term revenue. We’re here to stay and we believe that basing our revenue stream on the value we create for our customers is the best way to create sustainable growth.


Cheers,

EB.

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Posted in Business, Open Source, Software

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What makes Nuxeo ECM different and worthy of interest? (No, it’s not “open source”)

March 18th, 2010

Note: this post follows the previous one about the ECM market and I advise you to read it to better understand the context of this one.


What differentiates you from the other enterprise content management offerings?


Standout-from-the-crowdI get this question regularly, and too often the expected answer is “open source”. While playing a role, I wouldn’t say that open source is what makes us different. Open source is in our DNA, but that’s not the key for our customers, nor the biggest change we’re aiming to bring to the market.

What makes us different? Our technology, the ECM platform.

This is by far our main market advantage and what we have to bring to the market: Nuxeo Enterprise Platform (EP), our ECM platform. We’ve built superior technology, leveraging an up-to-date Java stack, design pattern and modularity. This is hands down the main reason that we win deals today with enterprise architects and technology-savvy business sponsors.

The value proposition here is simple and compelling — We dramatically reduce the time and the cost of building on top of the ECM platform when compared to LiveLink or Documentum. This is why we won major deals with Jeppesen — a Boeing Company, Orange, BBC, EllisDon, Cengage Learning, Overstock.com, and many more.

We don’t try to hide from architects, we bring them back to the center of the game and give them the tools to answer challenges of the 21st century. To fully bring competitive advantage and deliver the value it promises, technology is important. We believe software is an engineering discipline, at the service of the business.

Of course, open source is deep in our DNA and brings a lot of value, ease and insurance to our customers. But from a decision-making standpoint, it plays a role but isn’t usually a key factor. The same is true for cost. Yes it is important but clearly only satisfying the functional and technical requirements are paramount. Ironically, price regularly plays against us: such as when our competitor friends have the financial resources to buy deals from us when money is key. Hence the best case for us to win is when what we offer is not achievable by the incumbents.

We offer a better ECM platform, enabling a new generation of content applications

On the platform side, our mission is to commoditize the market for “ECM platforms” with standards, widely known technology and great infrastructure. We made a strategic bet 3 years ago on a stack of technology and infrastructure that is now mainstream. So we have a great ECM platform, leveraging open standards and a well-known technology stack, highly modular and flexible. It runs on a wide range of hardware (from embedded devices in planes to large farms with terabytes of data) and serves very diverse needs (from mission-critical editorial systems for press agencies to a highly secure case management system for a nuclear agency or a mobile document repository for an offshore welding engineer.)

The net result of all this is that our platform is the most flexible and modular on the market and is widely recognized as such. This has become a great market advantage for us with the rise of content applications (CEVA/CCA: Content Enabled Vertical Applications / Composite Content Applications – as Gartner puts it and discussed at its recent Gartner Portals, Content & Collaboration Summit).

Content Apps represent a steady move in the ECM market where buyers want to buy vertical solutions, solving actual business problems. They don’t want to pour money into generic technology anymore. We are seeing a new category of ISVs, packaging business knowledge into software to create and sell those content applications (ex: construction project management, clinical facts management for biotech and life sciences, software for control and command centers, etc.). Content apps are a logical evolution of the ECM market toward more vertical, business-ready solutions. And we believe we offer a great development and composition model for the next generation of content apps.

As such, I believe Nuxeo is well-positioned to benefit from this evolution given that:

  • Open source software has shown superior ability to commoditize markets, recycling big vendors’ license revenue into a new stream of value. We participate actively in this commoditization, deriving revenue for us and offering better value for the customers.
  • Our platform’s flexibility and feature scope combined with the open source aspect of the software ease the life of content app architects and developers. The development model the platform offers is widely recognized and praised. We believe we can enable a new way of building content apps. Easier, cleaner, faster.
  • Our business model derives value from applications built on top of Nuxeo EP (thanks to the subscription-based business model we have created).

That’s why we’re here. To offer and evangelize an ECM platform and the associated content apps, responding to the new needs of businesses in this era of information explosion.

I hope this also bring some clarification and will entice people to look beyond the “open source” label. Because there’s a lot more to discover and that could really help your business!

Cheers,

EB.

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Posted in ECM, Marketing, Open Source, Software

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Is there room for Nuxeo in the mature and crowded ECM market?

March 15th, 2010

While exchanging with a well-recognized and successful industry expert about our differentiators and the market we are in. Since they popup frequently, I thought it might be interesting to publish the answer.


Bazaar-istanbul

ECM is a mature and crowded market. Is there really room for anything more than a niche player at this late stage in the game?

Hegemonic vendors

At a macro-level, the enterprise content market is composed by 5 hegemonic vendors (OpenText, EMC, IBM, Oracle, Microsoft) and a set of minor ones (~15 notable), after a strong and fast consolidation of this market. Gartner says: 3 top vendors have 52% of the ECM market. The Triad of ECM? ;-)

As many vendors have skipped investment in technology aggregating software from their acquisitions (with the notable exception of Microsoft) much of the current batch of software has been designed 15 years ago and hasn’t evolved much. They have forgotten they are in engineering, not retail. In this world of lean, on-demand, instant-on, the major ECM payers still talk literally in days or weeks to install their software. It’s faster to setup a whole virtual datacenter processing and storing terabytes of data on the Amazon Cloud than setting up a vanilla ECM system!

On top of this technology breakdown, many of these acquisitions have been poorly integrated, to say the least (with a special mention to OpenText on this side). And the pace of the recent consolidation has created a disturbance in the market.

Those two combined dynamics enable new vendors with good technology and the right go-to-market approach to enter the ECM arena, tickle the incumbents and rise, and bring some fresh air and fun to this market.

Perspective shift from customers

We see important shifts in how customers evaluate and choose ECM platforms:

  • More and more Architects are actively involved in the choice of next-generation ECM platforms (not only business users / archive managers) and are putting it at the core of their information system. This sets high expectations in terms of software architecture, integration capabilities or flexibility and technology stack.

  • They need to update systems deployed in the ’00s because incumbent vendors are not supporting those versions anymore => the cost of upgrading is high and they are looking for alternatives. Often we can offer efficient and better replacement for those systems for a fraction of the price of the ongoing maintenance. Let alone the license fees…

  • Given the lack of technical investment and the legacy of major ECM platforms, implementation is complex and expensive => we can do better with today’s technology. Monolithic is no where near the state-of-the-art of software-and Architects care because it directly impacts their ability to make these ECM platforms meet the new business challenges.

Move fast, commoditize legacy, create value with the rest

I really believe that the market maturity combined with the legacy technologies of monolithic players is a key advantage for us: we are disrupting the market by commoditizing the technology (platform) and deriving value from this commoditization.

We target what hurts: the fat and comfortable maintenance stream. We target it with more flexible, up-to-date technology and a company organized to provide superior service for support & maintenance as our customers actually deploy and use our products. That’ll tickle! ;-)

So yes, I’m firmly convinced that there is a room for new players, like us. And timing seems just right for a big one. The market needs to evolve and renew, in the best interest of customers. And they well deserve it, given the challenges of the knowledge era that just starts…

That’s going to be a tough ride. But… feels fun too!

Cheers,

EB.

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Posted in Business, ECM, Marketing, Open Source, Software

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Open Source vs. Proprietary Software Platforms: the Market’s Perspective

September 30th, 2009

Matt Asay, in the good post "Open source is a platform, not a product", is claiming the end of the platform wars because open source has won. Clearly, open source platforms are winning. Just take Eclipse (development apps and desktop apps), Java, Android, etc.

But saying that open source platforms are winning doesn't mean the platform wars are over. I would say the contrary. Platform wars will continue, and this helps innovation (if the wars stop, then I would worry actually). We'll see a lot of open source platform wars. Competition rules the world! :-)

The question is: why are open source platforms winning? I don't think it's because of their flexibility. Flexibility is a feature of a software platform open source or not. Being open source doesn't give you inherent flexibility, goodness or ease of use. Of course, flexible platforms win, and often they happen to be open source. But not always. :-)

I think the core reason lies in the intrinsic economic efficiency: open source is a better way to produce software platforms from a market perspective. It's just more efficient at the macro-economic level, factoring cost and fostering collaboration. Hence, it wins. Period.

I believe the economic efficiency aspect is key in the success of open source software, especially for platforms. And it's not pure magic. Open source licensing scheme and open development models enable collaboration between self-interested entities, which can combine forces as they need within a clear legal framework, and such without a complex initial collaboration setup and big contracts negotiation.

And as platforms are inherently meant to serve a wide range of needs and people, open source reveals its superior nature: it enables great collaboration between actors using the platform, hence aggregating their work to advance the platform.

This virtuous cycle is clearly shown by great successes such as the Eclipse Platform (the more vendors joined the game, the more Eclipse became the de facto platform for dev tools), Apache projects, WordPress as a blogging platform, Firefox and WebKit as browser platforms (on different fronts), and the list goes on…

And, open source doesn't kill innovation. Quite the contrary – thanks to the inherent openness of the model and the competitive nature built-in (forks are an extreme example) – open source fosters great innovation.

So yes, as Matt says, for any given market segment, open source platforms win, are about to, or at least represent a significant share. But it's not because of their flexibility or because of their open source license. It's because the open source licensing scheme catalyzed by an open development model bring so much efficiency that it beats any proprietary competitor.

That's economic reality, not software architecture. And it's a lot stronger!

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Posted in Business, Open Source, Software

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