Author Sandro Groganz

Open Source Vendors Must Think Global

Sandro Groganz 2 Comments

Open Source software vendors outside of the U.S. or UK tend to make a fatal strategic mistake: They sacrifice international marketing communications at the altar of a regional sales focus.

For example, an Open Source business started in Spain will naturally feel more comfortable with doing sales in Spain with most employees speaking and thinking in Spanish. Spain is where our sample company comes from, it’s a safe haven, and it’s where the bulk of sales are being made. Why should they go global, invest in building an international business and take the risk?

Sooner or later, there will be global competition in the same niche from another Open Source vendor or project. Someone else will reach a critical mass of international community and business adoption much quicker than the Spanish company will ever be able within its country of origin. And then our sample vendor will find itself against a much stronger competitor who isn’t afraid to take risks.

Essentially, Open Source vendors must think of themselves as global and look at regions as regions, and not the other way round.

In order to do this well, English should be the main language of communication with the public right from the start. Make sure all general marketing collateral is first available in English. This will make English and an international point of view part of the company’s DNA from the beginning, which is critical for success.

Independently, it is of course important to note that in some regions you will only be able to attract early adopters by communicating in English. Pragmatist buyers in countries such as France or Germany will appreciate if your sales stuff spoke French or German and related marketing collateral were available in their native language. This trend of early adopters willing to try out English-only products while mainstream users wait for the product to mature, allows for easy and free market research. If the early adopters in a region start using and talking about your project and you were able to win a few prestigious customers, it is time to consider localizing there.

So, don’t make this mistake, thinking like a regional Open Source vendor that goes global. Rather think like an international company focusing its sales efforts towards certain regions.

Looking at this from another perspective, I never understood discussions whether MySQL (for example) is a European or US company? Trying to link banner Open Source vendors with national or regional pride is totally neglecting the fact that Open Source is and always has been a global business.

Survey Identifying Business Needs for Semantic CMS

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Please shell out a few minutes to help the IKS Project identify business needs for semantic CMS by participating in a survey. The results will help the EU-funded project to work towards an Open Source interactive knowledge stack.

There are two different sets of questions, depending on your background:

Thanks for participating in the survey and please spread the word!

Commercialization of PHP Software

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I’ve just published an article that explains how a PHP-based product can gain a good position in the market and be made appealing to customers by using marketing communication. The focus is on products licensed under an Open Source license. Yet, most of the recommendations also apply to proprietary offerings.

The article has initially been published in German by PHPmagazin. It has now been translated to English and is available on the Initmarketing website: Commercialization of PHP Software.

Self-hosting Launchpad? Dream on…

Sandro Groganz 8 Comments

Canonical recently announced that it open sourced Launchpad, its web-based project management and collaboration platform. This news came out while we were conducting an evaluation of Open Source collaboration platforms for a client. The client’s intent is to host a collaboration platform for its developer community. The evaluation was done based on feature sets, and was drafted before Launchpad’s source code was released. Launchpad turned out to be the slightly better choice and once it became available, we tried to install it.

Unfortunately, we began to realize that Launchpad isn’t designed or intended to be used as a self-hosting site due to the following reasons:

  • There are no release packages. You checkout the development code via a Bazaar repository and then compile it. Depending on the state of the last checkin, the code might even not compile sometimes. It took us two tries to get the installation done.
  • The working installation is meant for local use only and it’s not trivial to get it running under a normal, fully-qualified domain name.
  • Even if we had figured out how to make Launchpad serve properly via HTTP to the general public, we would have faced a maintenance nightmare by doing QA and release management ourselves.
  • Let’s not forget the fact that Canonical requires you to not use the trademark “Launchpad” and to replace all the graphic icons.

It is not without irony that an Open Source marketing agency was blinded by the fuzzy PR parlance of Canonical. Luckily, the source code always tells the truth.

After we had discussed the issue on the launchpad-dev mailing list, Canonical today added the following line to the Launchpad Development Wiki, which makes it pretty clear:

Note that our focus is on getting Launchpad to build easily so more people can participate in Launchpad development. Running a stable production instance would be ”much” harder than running a single-developer test instance, and we don’t recommend it. Unlike many open source projects, we’re not seeking to maximize the number of installations; our goal is to improve the instance we’re already running at Launchpad.net.

Obviously, Canonical really doesn’t have to worry that by open sourcing Launchpad, they licensed away their business model.

Our client has opted for FusionForge. It’s a great alternative, works out of the box, is easy to install and includes all the basic features. It runs on top of Ubuntu 9.04, an Open Source operating system backed by Canonical, which, ironically, has some proper release management 🙂

Top Commercial Reasons Why Open Source Communities Matter

Sandro Groganz 9 Comments

I’ve yesterday had a conversation with the CEO of an Open Source company who sounded rather frustrated when I discussed the importance of nurturing Open Source communities. He said:

People seem to think they have a right to free software and free support. It is not about free speech. It’s all about free beer!

I don’t think this blanket judgment is true. There have always been freeriders in Open Source communities, but the overall benefits of an Open Source community to an Open Source business always outweigh the community loss imposed by freeriders.

Here are the top commercial reasons why Open Source software vendors should invest in community development:

  1. Better sales lead generation: A growing Open Source community translates into a growing sales pipeline if done well, i.e. OSS vendors can monetize a part of the community user base and convert them to commercial users.
  2. More effective sales: Community-driven sales requires less effort compared to a direct sales approach, because potential buyers have already evaluated the Open Source product and contact sales only when they are ready for a purchase.
  3. Raise visibility: A vibrant Open Source community fosters branding and word-of-mouth marketing.
  4. Build a Brand Community: Open Source brands grow and thrive around real value created by a community of engaged, informed participants. A healthy community adds tremendous value to almost any activity a company engages in.
  5. Larger install base: The goal is to build the corporate brand as well as product and service quality by creating a larger install base.
  6. Cost-effective marketing: The larger and the more active an Open Source community, the more it helps to spread the word and the less investment in marketing is needed to achieve the same level of visibility.
  7. Higher credibility: A growing Open Source community helps companies to be perceived as a true Open Source vendor by journalists, analysts and potential customers. A critical mass of community members also indicates how well a product solves a problem and that there is actual demand.
  8. Cost-efficient and competitive business: Commercial Open Source offers the best cost-benefit ratio for enterprise customers due to cost savings, innovation and investment protection enabled by a vivid Open Source ecosystem that contributes bug fixes, new features and more.
  9. Investment protection: Reduce client risk by broadening the base of product-related skills.
  10. Test and develop new markets: Open Source offers companies and organizations a highly cost-effective route into international markets. Through community development tactics, OSS vendors can test and develop new markets and communities with little upfront investment.
  11. Externalize 1st Level Support: Enable community to help themselves share information, to reduce support burden for the OSS vendor on basic issues.
  12. Technology and thought leadership: Community development will help to establish an OSS product as a technology leader in the space by attracting external developers. Based on that, OSS vendors can through appropriate communications also become a thought leader.

2nd IKS Workshop: The Web 3.0 and Open Source Semantic Search

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Rome is a great city and it will host a bunch of great people (including me 🙂 ) at November 12-13. This is when the second IKS Project workshop will take place. The goal of this workshop is to start working on an Open Source software stack that allows other Open Source projects and software vendors to leverage semantic search technologies.

IKS is an EU-funded project with an overall budget of 8.5 million Euros. The first workshop back in May saw two dozen of bright Open Source CMS minds discussing a semantic stack in general. This time, it will also make sense for non-CMS-related Open Source projects and vendors to join.

There will be interesting presentations from some key figures at the second workshop in Rome, such as Peter Mika of Yahoo! Research talking about “The Role of Semantics in Search”.

If you’re up to joining the Open Source Web 3.0 train, then hurry up, because the October 22nd deadline for registering for the 2nd IKS workshop on semantic search is approaching quickly. See you there!

At the Edge of Open Source Communities and Companies

Sandro Groganz 5 Comments

Matt Aslett has made his stance on a discussion that started on Twitter about Open Source vendors giving away control to their community with the goal of better monetization. I concur with Savio Rodriguez’s doubts, but I believe that it is an issue worth while to be discussed, because it basically questions of the open core business model favored by investors.

As you might expect, let me take a look at it from the marketing perspective.

What I see in markets where plenty of open source offerings exist with a multitude of business models (e.g. in the CMS space), is that there is growing pressure on vendor-driven models to adopt more of the benefits of the community-driven model and vice versa.

There are various business tools that allow OSS vendors and their investors to test how much they will actually benefit from gradually moving control to the community. Switching to a more permissive license might be the last step.

For example, OSS vendors can increasingly include community members in discussing and executing the marketing strategy. Furthermore, a vendor could initialize a community board where the vendor discusses release cycles and development issues with community members. Both efforts could later lead towards a community-owned association that holds the trademark and decides upon the development roadmap.

On the other hand, community-driven OSS projects sometimes envy OSS vendors, especially when it comes to the ability of rolling out a focused marketing. I’ve heard from a hand full of board members of OSS associations that they’d love to a) actually have a marketing budget and b) have control over that budget without the need for lengthy discussions to reach consensus among the community. Things might perhaps be moving towards some light vendor-style structures here, given that OSS projects need to increasingly compete with OSS vendors. In the end, it’s all about OSS projects becoming more professional.

Alexander Kempkens Joins Initmarketing

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akempkens_96x96I am particularly proud to welcome Alexander Kempkens on board of the Initmarketing team. Starting in 2004 as a developer for the Mambo project he co-founded the Joomla CMS in 2005. Ever since he is working for the Joomla project as community manager and was the responsible of marketing/communications and events coordinator. In addition to that, Alex has recently finished his studies in International Management. Hence, he is one of the very rare people who have combined expertise in marketing, community development, software programming and business management with experience in the Open Source domain.

The Real Unique Buying Proposition of Open Source Software

Sandro Groganz 1 Comment

Matt Asay urges Open Source software vendors to rethink their marketing stance:

Open-source advocates for years have waved the banners of “freedom” and “no vendor lock-in” to sell the value of open source. It hasn’t worked. Chief information officers don’t buy vague concepts. They buy high-quality software at a compelling price. To better market open-source software to the world, open-source advocates need to match their message to what CIOs actually want to buy.

He furthermore argues that customers don’t care about “no lock-in” as a key reason to buy Open Source and states:

The reality is that open-source vendors should be pitching real value to real customers.

The question of what is reality and what is real is of course a philosophic one. In marketing, we need to be very pragmatic because it is all about the customer and the money, right? Matt’s blog posts sound pragmatic, nevertheless they are too narrow for my taste – perhaps due to his (welcome) intention to get the discussion going. Let my try to offer a broader perspective:

Real freedom

In general, I do agree with Matt that “freedom” might not be the most important Unique Buying Proposition (UBP) to first-time commercial users, but this is not where your marketing should stop. In fact, it seems that the longer someone uses FOSS, the more important the “freedom” aspects become — namely open standards, vendor independence (aka no lock-in), and the free and open source software philosophy.

This means that when pitching an Open Source product or solution, be it by the vendor or partners, “freedom” is nothing you should highlight directly. Instead, mention tangible business benefits such as saving licensing costs, greater flexibility and ability to integrate with third-party software, etc. Free Software advocates might argue that such business benefits simply translate the freedom aspect for CIOs – which makes a lot of sense to me.

Looking at the complete business ecosystem of an Open Source vendor (and not just the sales relationships), tells you that freedom is important for success. For example, every OSS vendor loves to argue that their software is so much more stable than proprietary software due to a large community using and testing it. Freedom is essentially also behind Marten Mickos’ main argument to the EU commission to approve the Oracel/Sun deal:

[…] the vast and free installed base of MySQL is using it of their own free choice, unencumbered by the vendor and under no obligation or restraint.

What this tells an Open Source advocate or sales person is that the CIO-centric business benefits on your product brochure are just as important as good technical documentation for developers that allows to grow a community.

Real regions

The type of engagement varies depending on the region you plan to market and sell to. For example, Open source adoption seems to be driven by commercial engagements in Northern Europe, while Southern and Eastern Europe is characterized by community-driven engagements. In Spain and Italy, users expect free software to be available for free. Clearly, this does not mean that freedom is the main UBP in Spain and Italy, as long as you don’t look at it from the cost perspective. What it actually means is that the partner sales channel is of strategic importance to Open Source vendors in these regions. Partners in Spain and Italy might not mention freedom directly to their potential customers, but they will strongly insist on it when the vendor wants them to sign a costly partner agreement.

What this tells an Open Source advocate or sales person is that different regions require different go-to-market strategies. The cost argument is not always the same one for every region and the freedom argument might just be waiting around the corner, especially when it comes to growing a partner network.

Real propositions

There is not the one and only real UBP. There are several. Each of them have different importance in different regions, let alone the fact that small businesses have different expectations than large corporations.

Most important to Open Source advocates it that there are communication and sales processes in Open Source Marketing that one should take care of. Open Source lead generation begins very early (Twitter, Weblog, etc.) and does not end once you closed a deal. It’s a continuous process. When a customer bought your cost argument, you’d better make sure that this customer can also experience the freedom of using your product. Open up endless opportunities through third-party extensions, technical tutorials and so on. This is how you retain customers in Open Source. It only works if you have built-in freedom into your business ecosystem.

Emilia is Here!

Sandro Groganz 11 Comments

Emilia Teresa Groganz

Our second daughter Emilia Teresa Groganz was born Friday, September 11th.

After she kept us in suspense for 10 days, we are so happy that she is finally with us.

@Emilia: We love you, you enrich our family! We can’t wait to see you walk, talk and make a lot of crazy things 🙂 . We are thankful for you!