What ails commercial open source software companies?

March 25, 2015

Open source software is mainstream, open source has made (and continues to) the world (not just IT) a better place in many ways. There are many example of open source software ( Linux, android, chrome etc) to open source projects (gov data, open hardware, educational contents etc) However, we can’t say commercial vendors of the open source software have been very successful (upward of $500 million and profitable) in selling their subscription model and create a robust business – of course the most notable exception to this is Red Hat. Although, of late, there have been investments in and buyout of some of the commercial vendors and I wrote about it in my blog ‘Millions of Dollars in open source software business ..’, I feel these investments are more based on the promise than the past performance.

Why are commercial vendors struggling to grow despite being in the business for around 10 years or despite the fact that open source project has seen very high popularity (number of downloads), active contributors and deployments in large orgranisations in real projects.

Based on my experience working at Red Hat for 8 years (from 2001 to 2009) and later on 6 years dealing with many of these commercial vendors I can point out few areas that these companies are not able to address or areas that they need to improve upon. At Ashnik we deal with some of the leading names of these commercial vendors and hence I am not going to name any one in particular.

Focussing on free download or community edition deployment –

I have seen many sales executives building their business model or selling the potential of commercial success to the partner network based on these numbers. The reality is that those customers who have downloaded open source product and have deployed the community edition in real projects have tasted the joy of ‘free’ and ‘great product’. Now going forward these customers build their IT budgets attributing zero cost for these products. There is hardly any reason for them to pay for the subscription. For a sales person these are the most difficult customers to deal with. You can’t build your business based on this pipeline. Only thing is these customers act as endorsement for quality and usefulness of the product.

Distributor / reseller model in the initial phase –

Many of the commercial open source software vendors appoint traditional software distributors and resellers. It looks great on the paper that you have a reach in the market and now you can sit back and watch your cash register ticking. But this has not worked at all. The reason is for the open source product you need to go out and create a strong demand for buying subscription along with the awareness of the product. Many vendors that I have seen have tried to piggy back on the success of the open source project and assumed that customers would buy subscription through resellers. But without on-the-ground engagement with customers there is not going be a demand for subscription. This needs a ‘push’ strategy. Whereas reseller network is (in general) geared up to address ‘pull’ demand – which means customers calling and asking for the price of a product.

In such a scenario, it is important to appoint resellers who would go out in the market and create a demand. For this, commercial vendors need to create different margins and engagement model for the reseller. Most of the vendors have not shown understanding of this need.

There is one more reason coming in way of convincing the resellers to put in extra efforts to create pull from the market and it is about thin margins in net dollars. The open source products typically are priced much lower than proprietary products, hence even a higher %margin and promise of annual subscription does not given enough incentives to the reseller to invest in setting up sales and pre-sales team for these products.

This challenge can be addressed with innovative approach and identifying right partners. ( I can say that we have been able to guide and setup such models with the commercial vendors where they were open for discussions).

Sales and Channels team composition –

We all know that it is the people who make difference in success and failure. I believe that good sales people and people with adaptability would fit in any company, but we also need to understand that selling open source software to customers and building partner network needs additional understanding of the business. Many commercial open source vendors tend to recruit people from proprietary software vendors (typically their respective competitors). But I have seen that this approach has not worked for most. First of all the cost of these sales people is high and they have to go through steep learning curve that results in longer time to deliver. In many instances I have seen that these people have antagonized the reseller network with their approach (that comes from the business which operates on ‘pull’ model) and failed to capitalize on the goodwill of the open source project. Hence just recruiting your team from your proprietary software competitor is not a guarantee of success – rather most of the time it is counter productive.

 There are other areas that are equally applicable – whether you are open source or proprietary software company – to be successful in growing the sale and smart executives understand those things very well. What matters in case of commercial open source company is an understanding of the peculiarities of open source business and address them effectively.

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BJP needs a new Abhiyaan – ‘Maati Se Moti’ (माटी से मोती)

March 23, 2015

In view of the hue and cry being made by the opposition parties on land bill reforms, I feel it is important that BJP should take the fight head on and not depend only on PM Modi ji to reach out to the farmers. Let me explain why I say so.

I think the Indian politics has changed for better and changed forever from the days when government could take it for granted that only time they have to face the people is only after 5 years. Governments of the day are not even getting one full year as its honeymoon period, people are in a hurry to demand the changes (that they waited for 60 years). The modes of communication in the 24×7 TV reporting, social media etc have set the governments on its toes and hence if there is any (real or perceived) disquiet in the country about Government’s decision, it should immediately reach out to the people.

But I think that to reach out to the people only government mechanism is not good enough. Number one, government mechanism is busy implementing policies and it takes time to show results. Number two, government mechanism (bureaucracy ), largely, is not geared up to communicate. And lastly, bureaucracy itself needs to be educated about Government’s message.

In the face of it, the mantle falls  on the political arm of the government to communicate and be in touch with the people all the time. There are other benefits of doing this :

What was the biggest strength of BJP when it won 2014 elections? It was the support of aam aadmi, it was the support from BJP’s non traditional vote bank i.e. the rural India, it was the votes of the financially weaker section of the society. Today, opposition along with some media is creating a perception that farmers and aam aadmi is unhappy with the Government. If BJP (not government machinery and ministers only) reaches out to these people and communicate directly, opposition which is sitting only in Delhi would have nothing to talk about.

Secondly, with the last 10 years of corruption and 60 years of Congress party rule, people have become weary of governments in general and they embrace the ‘Andolan’ more readily than the government’s narrative. Though, in case of land reforms bill, opposition has not been able to mobilise any protests, it has been successful in creating a perception that people (aam aadmi / farmers) are not happy with the bill.

Modiji’s ‘Mann Ki Baat’ on 22nd March was an excellent talk and it tried to dispel many myths, it tried to give positive side of the bill and it also communicated government’s resolve and sincerity to work in the interest of farmers. But now, I feel, people would view his talk more as a government’s position, still doubting its intentions and may not embrace it fully.

Instead of waiting for something (protests) to happen (opposition it likely to manufacture some form of protests and amplify it) and then go out explaining government’s stand, I think it would be better for the BJP to create its own Abhiyaan and I am suggesting a name – “Maati Se Moti” ( माटी से मोती). The narrative could be to establish connects with the farmer and discuss how to make most out of the farming land, how we can make better India through agriculture produce, what all government is doing for farmers etc. This way the discussion is more positive, it is about their welfare and BJP / Govt is not defending its position.


‘India’s daughter’ – Why I question Leslee Udwin’s intentions and why I feel Govt did a right thing.

March 7, 2015

I have watched the documentary ( on BBC 4) and I have also watched the interview of Leslee Udwin on NDTV. After watching both, I believe that what Govt of India did was a right thing. The worse thing in this saga is the controversy created by media. Look at the headlines in the two leading news agencies in India – Times of India and NDTV. Same news, same day, how these channels are spinning the headlines. After watching and reading these news I felt really disgusted about the way these channels were sensationalising whole issue.

NDTV Times

Whether you watch the documentary or not, either ways, you would come to the same conclusion that it was not done in right spirit and intentions were not  to ‘study of rape incidence’ but to create publicity gathering documentary with the aim of making money.

Lets take first scenarios where you have not watched the documentary, but have seen Leslee’s interview. You would realise that she has ‘managed’ to get the clearance through questionable means.

Example 1) The jail authorities had cleared the documentary for non commercial purpose. She managed to convince them that every documentary has a small commercial value (this is her own admission) hence they should add the word for the purpose of clarity. It is very clear from the way publicity is generated that she ‘managed’ to get this word in the revised letter hiding the real intention of generating huge profits (through big publicity). To get these ‘permissions’ she was working through local ‘agents’ to ‘deal’ with jail authorities,

Example 2) She was supposed to show entire footage to the jail authorities. She very cleverly showed the non essential part – the shooting of the surroundings etc of few hours (!) to the committee on first day, they got (predictably) bored and decided to see the real part – the interviews with the rapists – next day. That never happened. She avoided showing the interview by hiding behind the technicalities, because her real intentions were not clean.

Jail authorities have sent the letter that she had violated the permission given and she should not release the documentary. Her stand and approach (from the interview) has been very confrontationist. She is seen daring the Indian government to stop its screening by telling that there would be protests in the world. Her attitude smacks of arrogance coming out of ‘I am superior’ kind of traits.

She proclaims that the documentary was supposed to be her gift to India. My question is why she never thought of making a documentary on the similar subject closer her home town – Birmingham, UK. There are more heinous crimes against young girls being committed for last 15 years and the society is silent. Should she not be gifting a documentary to her hometown? Read the rot in the British society and the extent of problems they have “Call for national debate on Muslim sex grooming” 

Now lets consider you have seen the documentary and her interview too.

If this documentary was supposed to be study of society and problems of rape in Indian society, I did not come out with any new information or new angle than what has been extensively reported in the media, except for the interview of the rapist. Was there a need to re-state those incidences?

Was this documentary made to create sensation by giving platform to the rapist? The documentary ends up giving an impression that every rapist would start making the bucks ( media has reported that the rapist’s family was paid Rs.40,000/ – after intense negotiations) through such documentaries.

Why was the rapist shown in normal cloths than the jail cloths. As per the jail rule no inmate is allowed to use cloths other than those provided by the jail. Again, here, has she seemed to have ‘managed’ to work around the system through her local ‘agents’

Whether we agree or not, as per the Indian judicial norms the victim’s name is not supposed to be reported in rape cases. Why has she taken liberty with Indian law by stating the name so many times?

No wonder, if the jail authorities had seen the footage, they would have objected to it and it seems she wanted to hide these things from them.

Under these circumstances government has to take a stand to make sure that Indian laws and processes be followed and no one should be allowed to play with it. If there were shortcomings or system was compromised in the earlier time, it needs to be corrected.

Having said that, it is true that we have to get our act together, faster. We should have expedited the clearing of such case faster, we should have done much more with the ‘Nirbhaya fund’. I do not recommend only the laws to create safety of women – because in this statement it is assumed that women are weak and they need protection – I am of firm opinion that women have immense power – we as a society need to learn to respect them and accept their equal contribution in building society.


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