Posts Tagged ‘business models’

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No price, no value?

Monday, March 19th, 2012

Some days ago I posted “Buy less, spend better”, highlighting one of the main benefits of adopting SpagoBI suite or, in general terms, of choosing an open source product adopting the pure open source delivery model.

Now you can argue that a product with no price has no value either. If you believe it, this short presentation will give you some answers.

No price doesn’t mean no value. Monetary value exists (money saved or better spent by purchasers or money earned by sellers) and non-monetary value exists as well. As for SpagoBI suite, its value for free comes from its being state-of-the-art software, from its completeness, flexibility and innovation, from its model avoiding both software and vendor lock-in. However, its main free value comes from the openness of SpagoBI team to new collaborations: collaboration is everything in open source. Even more, you get a great value also when you spend your money: you save your money since you don’t purchase any software license, but you also make your price according to your needs. With SpagoBI, you pay for the services when you need them, how long you need them.

Mainly, if you actively collaborate, you are not just using SpagoBI according to the real open source spirit; you are a member of the community, you are part of the project, you are in SpagoBI story, you yourself are SpagoBI! Be SpagoBI today!

By the way, don’t think I’m going crazy. This doesn’t only apply to SpagoBI community, which is just a sample here. This applies every time you decide to look beyond achieving immediate results, every time you embrace the spirit of the community and you try to give more. It’s the real open source approach, when it fosters freedom of software. It’s the path that leads to building the ecology of value.

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Buy less, spend better

Thursday, February 23rd, 2012

The SpagoWorld initiative vision focuses on the sustainable development of mission-critical applications for enterprises and organizations.

It’s all about project-oriented solutions, balancing the weights in the development phase.

In other words: it’s about asking customers to buy less and spend better.

Some days ago, I had a glance at a news referencing the world’s 50 most innovative companies in 2012. My attention was attracted by Patagonia, ranking 14th, according to the following reason: “for selling more by encouraging customers to buy less”. (To read the full story, among various posts, you can read this one, October 2001)

Immediately I thought: wohw, what a nice slogan! It’s what I usually say. SpagoBI, SpagoWorld flagship project, is a good example! Am I right?

Mutatis Mutandis

Patagonia is a goods company dealing with a consumer market and fostering an environmental initiative.

SpagoBI is a work unit (SpagoBI Competency Center ) of a large IT company,  producing an open source suite dealing with Business Intelligence , a very complex, crowded and enterprise-level market in the IT domain. Moreover, SpagoBI fosters an ecological approach, where ecology refers to ecology–of-value , as a new collaborative and sustainable business growth, rather than to the natural environment.

Notwithstanding, both push the same message asking customers to buy less, just what they really need (and not what they just desire), and consequently spending better. (Finally, if the side-effect for Patagonia is selling more, I’m happy to see SpagoBI even selling more services in time as well).

What’s the reason?

SpagoBI is the only entirely Open Source Business Intelligence suite, offering all BI capabilities in open source (more than 20 analytical and operational engines, some of which are totally unique in the information intelligence domain), with a complete availability of a stable and mature software code, as a free software at no charge.

SpagoBI particular pure open source business model eliminates licensing sales, separating the rights to use the software from the sale of supporting services, avoiding both software lock-in (no customer obligation to buy) and vendor lock-in. This is the perfect fit for companies and organizations willing to buy less and spend better, investing  budget in the purchase of professional services and maintenance supporting the development of their business application software.

In the BI context, many times I see discussions about the capability of tools to fit users’ requirements. Nowadays, in a BI linkedin group is still active a never ending discussion referring to the following question: Why are so much of the business intelligence discussions about tools and not on how to get the right intelligence based on the requirements of the customers and how to use it?

My comment is obvious. A tool (a suite, I mean) is necessary. But from the beginning, SpagoBI suite has pushed the project-oriented approach as stated in SpagoBI vision: “Your Project is more valuable than our products: we believe that a good product can actually improve your project, if it promotes a project-oriented solution, balancing the weights in the development phase. Too often, the project development is focused on the project adaptation to a costly product. On the other hand, a project-oriented solution is designed so as to realize customized applications, focusing on the project development. This way, it enhances the project start-up, thanks to a new ratio among development measurement, cost and quality of results, unlike many current solutions, based on proprietary products and characterized by price discrepancies”.

Organizations need a good tool/suite, responding to end-user requirements and their strategic goals, instead of to vendor’s expectations.

In conclusion:

Customers can really buy less (no product-licenses at least), and spend better (in integration, in the development responding to their analytical needs) choosing open source software products (and an everlasting open product protecting software freedom, when SpagoBI).

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Gartner quotes SpagoBI in the 2012 MQ for BI Platforms report

Friday, February 17th, 2012

Gartner’s Magic Quadrant for Business Intelligence Platform, February 2012, is out.

This year major OS BI-related vendors as Actuate (BIRT), Jaspersoft, Pentaho are in; SpagoBI, the only pure OS BI product is quoted.

As the SpagoWorld initiative founder, I’m very proud to see SpagoBI suite – SpagoWorld flagship project – included in the Gartner’s report, even if it does not appear in the Magic Quadrant.

Gartner is not a recognized Open Source observer (especially from the OSS actors’ point of view) and the report refers to the whole vendors’ BI market, which are mainly proprietary. However, Gartner is a prominent IT research organization, very authoritative in the industrial market to which main BI customers refer to, looking for advocacy.

Despite this, I’m excited to know that Gartner, after a first mention of SpagoBI in the “Who’s Who in Open-Source Business Intelligence” report in 2008, has decided to include SpagoBI in its BI MQ 2012 report, somehow assuming that SpagoBI deserves the mention because it is a mature and reliable alternative to proprietary software.

Gartner says, among other things:

“SpagoBI is a 100% open-source BI platform sponsored by Engineering Group, one of Italy’s leading IT consultancies” …” SpagoBI is freely available, with no license fee. Consulting or support charges are separated from free software availability, with no user lock-in and no customer obligation to buy.” …” Clients indicate that they select SpagoBI for performance considerations, followed by license cost and implementation costs/efforts”.

[To read the full report, please contact your Gartner representative]

Why am I so excited? Because SpagoWorld initiative works and is well delivering!

First of all, assume that:

  • business intelligence is a very crowded and competitive market
  • the adoption of a pure open source strategy to address this market necessarily gives rise to an industrial comparison of any OS BI suite with other commercial products
  • a pure open source adoption is complex by itself and building a BI suite, for business purposes in the information domain, shifts this complexity to a second level.

This year major OS BI-related vendors are inside the Magic Quadrant. I’m saying “OS BI related-vendor” because the report highlights that Actuate, Jaspersoft and Pentaho follow an open-source strategy, with some differences, but after all they sell their commercial products (i.e.: proprietary products. For a deeper insight, I’ve already posted about the comparison between open core andpre open source business models).

This confirms the following statement: “SpagoBI is the only 100% open source, complete and flexible BI suite“.

Even though SpagoBI fulfils Gartner’s main criteria (“a BI platform is a software platform that delivers the 14 capabilities”, according to the Gartner’s definition), the fact that SpagoBI doesn’t sell any software license partially justifies the difficulties encountered by SpagoBI in achieving the second Gartner’s criteria, which would allow the suite to be included into the Magic Quadrant: “vendors must generate at least $15 million in BI-related software license revenue annually”.

Moreover, the understandable comparison between SpagoBI Competency Center of Engineering Group – the editor of SpagoBI suite – and other BI vendors is very challenging. Despite the fact that SpagoBI stands at the same level as major vendors thanks to its functional completeness and its innovation, the suite leads the BI analysts to face some evaluation parameters which are not the usual ones, suggesting different metrics that they probably wouldn’t have otherwise adopted because in contrast with traditional rules which BI customers are particularly fond of.

Some examples follow:

  • no licensing sales, with the consequent separation of the rights to use the software from the sale of supporting services (i.e.: both no software lock-in and no vendor lock-in), without any need to manage the purchasing costs, versus an expected confidence in the vendor’s support granted by the price paid with the licenses and maintenance purchases;
  • a complete software availability fostering wide integration, adaptation and flexibility capabilities, versus a strong control over the product by the vendor;
  • a different brand reputation of the editor based on the type of products it delivers, mainly qualified by the amount of support and professional services it sales, versus the brand reputation of the vendor mainly based on the amount of its software license-related revenues
  • a supporting business ecosystem-based model, driven by a specific working unit (Competency Center) belonging to a large systems integrator sharing its business with various local integrators, versus the traditional channel-based business model involving local OEM/VAR and resellers.

On the other hand, the previous points highlight some peculiar characteristics of SpagoBI approach to the BI market, marking a difference and pointing out many opportunities both for BI customers willing to enter in the open market era in an innovative way and for those who want or must accept – under the pressure of budget scarcity – the challenge of a new economical model, even keeping a traditional approach.

This is the challenge that SpagoBI is facing now through an ever-improving process.

I’m the witness of an increasing interest of the market in SpagoBI, aware of the fact that this market sharing will never be able to compete with major BI vendors.

Nonetheless, I’m very proud to see that someway Gartner points out to the market that SpagoBI can make this possible, confirming that SpagoWorld initiative is well delivering.

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Radical Open Source

Wednesday, August 31st, 2011

I’m neither looking for a new label (ROSS or ROS, if you go beyond Open Source Software), nor proposing a new model (so far). Just to share some thoughts with you.

Premises

New business models and application models are growing (SaaS-based ones, Cloud, Mobility, Internet of Things). According to the  UK’s national innovation agency, the future internet is Converged Services “an evolving convergent internet of things and services that is available anywhere, anytime as part of an all-pervasive omnipresent socio-economic fabric, made up of converged services, shared data and an advanced wireless and fixed infrastructure linking people and machines to provide advanced services to business and citizens.”

In this scenario, openness is crucial, software is even more pervasive, knowledge sharing (the ground of open source software) is crucial as well, but open source software is loosing its original motivation. Software will have less and less value per-se, but its value will be even more correlated with services, digital objects, artefacts. Nevertheless, sharing and collaborating in building great software code (i.e.: share of knowledge, experience, solutions) will be even more important.

OSS specificity

Free Open Source Software was born in a context of hackers, many of them working at universities, an IT generation interested in technology and ethical values. Open source is currently a wide spread paradigm throughout the software industry, even if its alignment with its foundations has been forgotten.

From end-users’ point of view, the “digital native” generation will probably focus on “service consumption”, rather than caring for ethical values.

From the point of view of the industrial-driven production, enterprises have imposed proprietary-driven models in the open source ecosystem; commercial and company driven business models have prevailed.

From the the point of view of the community-driven production, the Bazaar vs Cathedral paradigm is dead (except for few success stories). The new development strategy could be building of open source malls.

Moreover, people willing to build good open source software are struggling with license compatibilities and revenue incomes, in order to sustain their activities.

What’s Radical OS

Let’s change the rules of the game: all software will become open, simply open.

People will share knowledge, experience, solutions. Have you ever worked in the software arena in a different way?

Software is to provide a result to end-users (industries, governmental/public organizations, people): do they care about software per-se or about the result? Do they need software to be used by a provider to give them the expected result, or a provider using software to give them the expected result ?

Nice, we need good software (the market will choose it) for great providers (the users will chose them) in order to build great results.

If software is really open, radically open, we can achieve this result in a pervasive and quick way!

(Note from the editor: Now, I’m mainly dealing with applicative software “server-side”. I’m not thinking at client-side COTS software packages, but I’d do it as well).

Beyond Free Software

Let’s remove the licensing problem!

Software patents are no-sense (and not admitted in Europe).

Nevertheless, does protection of the freedom of code, “a la FSF style”, still make sense? Is it a way to nurture lawyers and to put more weapons into the game, at the disposal of firms’ conflicts?

Why not a single ROS licensing model, “a la MIT style” (and unavoidably let national regulations and laws solve issues about copyright and intellectual property)?

Conclusion

Ok, back to my day-by-day FOSS and corporate activities, including topics across the boundaries of proprietary, commercial and pure open source software, legal aspects, participation in open source communities and consortia.

Despite this, what about a big change?

As far as I am concerned, I often conclude my presentations with the following – old but still relevant – sentence, quoting Carlota Perez (2002):

“The present generations are living through a period requiring intense social and institutional creativity. There is a growing sense of urgency that leads to many proposals coming forth, of greater or lesser scope, with greater or lesser ambition, going from alternative economic theories to practical measures and policies. There is also ample scope for redirecting business imagination and technological innovation towards the deeper transformation of world society, through developing truly knowledge intensive ways of producing and living.”

Is it now the right time to envisage a Radical Open Source switch?

And if you’d like to go beyond this matter, attend next TEDGlobal 2012 on Radical Openness. They say: “The world is becoming increasingly interconnected and open. Radically open – manifesting itself in open borders, open culture, open-source, open data, open science, open world, open minds. With the loss of privacy that it implies, openness carries its own dangers. But it breeds transparency, authenticity, creativity and collaboration”.

Join me at fOSSa! I’m managing the Openness track: Open Collaboration, Open Cloud, Open Data. Great speakers have already been announced, more are coming!

“In this networked world, collaborative ways of creating meaning and things are increasing at fast pace. New ideas need to circulate freely, looking for sharing and collaboration. At the same time, open collaboration on the internet is challenged by new dangers: loss of privacy, security threats, apparent consciousness and freedom. Threats to the internet can also come from companies interfering on services availability or from governments snooping on data exchange. How can we face them? How much will new opportunities coming from open cloud services actually grant user freedom and open collaboration? Will open data change the rules of the internet? At this track speakers will share their vision with the audience and will give a sample of what’s currently happening.”

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What’s the path to Open Source Application Success?

Friday, January 28th, 2011

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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