Asay the Alfrescan

Over the past few months, I’ve been helping to grow Alfresco’s systems integrator ecosystem. Because Alfresco doesn’t have a professional services arm - we do 100% of our implementations through partners - we spend a lot of time working with our partners. They are our lifeblood.

This is why I’ve talked before about how important it is to choose SIs carefully and why it’s critical to us that our SI partners feed our well-being in parallel with our feeding theirs. To put it much too simply, it’s important that our partners make us money, and that we make them money.

This last point - making our partners money - happens concurrently with our releasing code. An SI partner can take our code, implement it for their customer, and collect services (and support) revenues, without ever involving Alfresco. Great for them, right? And, frankly, not terrible for us. It’s nice to be widely used, even if it doesn’t directly (or indirectly for that matter) bring us cash.

However, as it works out in practice, those partners that “feed us” are the ones that we, in turn, feed deals/leads. We have some partners with whom we work constantly, bringing them our largest, ripest deals. Why? Because they have both brought us big deals and they consistently promote the importance of our certified, supported version (Alfresco Enterprise). Those that default to Community because it’s an easier sell will tend to see less business from us.

Talking with other open source companies, it’s no different elsewhere (and is the same outside the open source world): companies exist to make money, and will focus on partners that help them achieve this goal. Very simple.

So, if you’re an SI, your first conversation with a prospective technology partner shouldn’t be about geographical or market exclusivity. It should be about how you’re going to promote that company’s premier product, as well as concrete deals that you will bring to them. If the company you’re talking to is like Alfresco, you’ll quickly find the return on your investment to be immensely profitable.

Larry suggested I quit my whining on his blog and do a session at LinuxWorld instead. So, I am. I’ll be moderating a great panel on the cost of bringing open source into an enterprise: “The Real World of Open Source Application Implementations: Case Studies from the Front Line.” Take a look at the session here.

This is something I’m going to be hitting hard this fall in Boston at OSBC. The more I sell and implement open source in real enterprises (rather than just talking about it), the more I think there is to say on the topic. The TCO studies don’t get their fingernails dirty - the best place to flesh out real costs of implementation are with real, live users and SIs.

It’s a wonderful time to be selling (er, licensing, or renting subscriptions to, or whatever the business model is open source. That said, it’s amazing the sort of lies that you hear in the market by those incumbent, proprietary vendors as they vainly attempt to protect their turf. Tony Byrne over at CMS Watch has a great collection of lies/myths that vendors (both open source and proprietary) vendors spew to gain/maintain market share. While focused on the Content Management market, they’re pretty applicable to any software market.

In order, with a synopsis of Tony’s (and my) response, the lies are:

1. “Our interface will sell itself”
   Tony: Ease of use is in the eye of the user, not the vendor

2. “You only need XY thousand to get started”

   Tony: Entry-level pricing tends to obscure the true costs to get to a workable product.

   Matt: What Tony doesn’t mention, but which has become clear to me as I sell against bloated systems like Vignette, Documentum, etc. is that there is a MASSIVE difference in both acquisition costs and implementation costs in proprietary systems and open source systems (the mainstream ones, at any rate, like Alfresco, Plone, Droopal, etc.). It really is a factor of 10X in many cases. I’m daily meeting enterprises that paid $500K+ for a Vignette/Documentum/FileNet/etc. system, and can’t it to work at all, despite hordes of consultants on the case.

   For this, source code matters. In good projects, source code access is of critical importance to helping SIs grok and then implement the code. And it’s highly useful for enterprises to be able to make an initial investment in a technology that costs them less than 10 full-time employees.

3. “You can recoup your software expenses by re-assigning the web team”

   Tony: Sorry, but software doesn’t run itself. It’s simply not the case that any software product is so easy to use that few to none need administer it.

4. “Our open-source solution means you’ll get off cheap” and “Our commercial solution is better supported than open-source alternatives”

   Tony: He’s right in saying that the “really big expenses lie in customization and integration” but, in my experience with quality open source projects (see above), he’s wrong to argue that “some open-source tools will cost you more than their commercial equivalents.” Well, he’s not wrong, but it would be important for him to point out those projects that end up costing more. I’ve yet to see it.

   With a commercially supported product like Alfresco, for example, we have customer after customer that has spent dramatically less on both the licensing costs and the implementation costs. And, again, we tend to be bidding against both greenfield and incumbent installations of proprietary software products that have run enterprises hundreds of thousands to millions of dollars in both acquisition and implementation costs, only to have the overpriced system not work.

   Does this happen with open source? Sure. One of our prospective customers is considering a move off their open source system because it hasn’t scaled or implemented well. But the cost of their failure is a fraction of what our proprietary competitors impose.

   As for the support question, it all depends on comparing apples with apples. Typo3 support (a la Enomaly is going to be as good or better than you’d get from OpenText. Ditto, in another world, with SugarCRM support from Sugar and/or Corra Technology. Or Compiere in the ERP space. The important thing is to compare apples (commercial company support) with apples (commercial company support from the open source product vendor or their SIs).

5. “Access to the source code protects you in an uncertain marketplace”

   Tony: “…[I]n uncertain times, the best thing to count on is a large, vibrant user community — something only a minority of commercial products and open-source projects can boast.” Very true. Also true that source code access itself is not a huge comfort, except in instances where the customer is active in the code, which is more common than you might think….

6. “No requirements? No problem! Our business analysts can get you started”

   Tony: This lack of requirements points to a problem in the enterprise buyer’s business, something that software can’t solve.

7. “Most enterprises deploy our solution within 4-6 weeks”

   Tony: “Most enterprises deploy a full-blown CMS over the course of a year. Sure, you can implement smaller projects and departmental pilots over the course of say, 3-4 months.”

   Matt: I think this is largely true of most software markets. Software is only part of the solution - tying it into an enterprise’s existing business processes is where the real time (and expense) comes in.

8. “Our migration scripts will take care of your existing content”
   Tony: “Garbage in, garbage out.” As Tony implies, migration is never “point-and-click” simple.

9. “Our product is better than Vignette, for a fraction of the cost”

   Tony: “[Th]ere are tiers in the marketplace. Some products — like Vignette — are geared to tackle big, complex problems. It’s true that buyers frequently overspend on CMS products, including Vignette, when they could have gotten away with something simpler and cheaper.”

   Matt: Actually, the “lie” above is actually 100% true in some instances. Again, it depends on which open source product you have in mind. Is Sugar easier to install and administer than, say, Siebel? Absolutely. Does it depend on what the enterprise’s needs are? Of course. Same with MySQL, JasperSoft, Zimbra, etc. But I think, on balance, enterprises do themselves a huge disservice by not considering open source alternatives. They tend to be much cheaper, more stable (for the good - read: actively developed with a robust community - open source projects), and easier to work with.

10. “We’re the only product with…”

    Tony: This sort of product differentiation tends to be fleeting.

    Matt: Real competitive differentiation tends to be customer service, at the end of the day. Open source is licensed in such a way that it must be more customer friendly. I don’t get paid on a day to day basis unless I’m delivering superior customer support - there is no big, up-front license fee to grow fat and lazy on….

A few months later, Alfresco is kicking tail (we have a customer and active pilot list that any company, open source or proprietary, would covet). I’m happy about this, of course, but I’m increasingly mindful that some of this success has come at the expense of the long-term viability of the open source ecosystem. The more I perpetrate the myth that open source is free (not ours, but others’) the more I limit Alfresco’s long-term market potential.

Should I be promoting MySQL 5.0 Pro over Community Edition? Absolutely. Do I need to promote it at the expense of an Alfresco sale? No. But I think I (and, frankly, we) can be doing a lot more to foster an extra-Alfresco understanding of why paid-for open source is a better investment than “in the wild” open source, at least where there is the option of commercial support.

As for systems integrators, they also shoot themselves in the foot when they quickly abandon a commercial product for a free open source project at the slightest sign of customer push-back. “The customer is always right” (a sentiment I believe) should not be an excuse for poor salesmanship. If our sales pitch is only successful when we’re pitching “free” as in gratis, we’re not worth our commission.

Contrary to (American) public opinion, soccer/football really is the most interesting sport in the world. And a group of American statisticians have proven it. As E. Ben-Naim (Los Alamos) and colleagues suggest in this report [PDF], a sport is most exciting if the end result (Team A will beat Team B) is often in question. Using this as a measure, they find that soccer is the most exciting sport due to the unpredictability of its results.

As reported in Nature:

A sport’s ‘upset probability’ is calculated from the number of times that the team with the worse record wins. The larger this quantity is, the more evenly matched the teams are - in other words, the more competitive the league is.

They find that, since records began - before 1890, in the case of English football - the chances of an upset have been consistently greater in English soccer than any of the American sports. The underdog wins 45% of the time in soccer, but just 36% of the time in American football.

I had no need for a scientific report to tell me that American football is boring. But I’m glad they’ve proven it, all the same.

Interestingly, however, the scientists find that soccer is, over the past 60 years, and especially in the last decade, losing some of its excitement. Why? Because results are becoming more predictable as money flows into the game. Chelsea, Manchester United, etc. - these teams regularly trounce their lesser-monied Premiership fellows because they can afford to acquire every player worth having. Not interesting to watch. In turn, this influx of money is turning the Premiership, in particular, into a league nearly as boring as the Italian Serie A league. The more money in a league, the higher the stakes, the bigger the incentive to play to not lose.

What’s the open source analog? Open source is profiting, in part, from the big software companies’ desire to not lose. They’ve sold about all they can sell, and have huge financial commitments to given customers and markets. As Clayton Christensen writes, their incentive is to keep feeding their existing customers with bloated, feature over-rich products. They consolidate (tantamount to the big soccer clubs purchasing all the talent) and then duke it out with other software hegemons. They have no incentive to play innovative soccer, as it were. Their incentive it to defend and eke out a 1-0 win or, worst case, a draw. There’s too much money at stake to experiment.

Customers, for their parts, don’t like this tedious IT any more than I like watching lazy soccer. Yes, enterprise buyers want predictability in their IT systems. But they also want innovation (product and business model), and they’re simply not getting it from the hegemons. They’re getting it from open source.

In short, open source = Arsenal. Enterprise bloatware = Juventus.

In seeking our own benefit we may tangentially benefit the wider population. But if we make enough room to maximize our own take while simultaneously seeking to do those things that will benefit the whole, I think we end up with a bigger market to monetize.

This means, for example, that it is important for any single open source company to have a strong open source ecosystem around it. The more open source succeeds, the more an individual player can sow from that success (and eventually reap). In the case of my company (Alfresco), we succeed to the extent that there are great open source databases, application servers, operating systems, etc. We could succeed without Red Hat, MySQL, SugarCRM, etc. But we can succeed much, much more in tandem with these others’ success. And vice versa.

John Donne, then, was right. No man is an island, entire of himself, whatever Paul Simon might sing to the contrary. It pays to fund abundance. If you’re an open source company, it pays to selflessly/selfishly strengthen open source projects and open source commercial entities. It’s just good business.

For those who find LinuxWorld to be a bit dull, let’s liven it up a bit. On Wednesday, April 5 (mid-week of LinuxWorld), my club, Arsenal, will play Juventus, Fabrizio’s club, in the second leg of their Champions League Semi-Finals “tie.” I somewhat doubt Fabrizio and I will be manning our booths at that time….(Join us in the lounge to watch the slugfest!)

I’m willing to bet Fabrizio a free Afresco subscription (value: $7500/CPU) (for use by Funambol) against Funambol’s open source Blackberry-killer server software (for use by Alfresco internally). So, Arsenal wins, Alfresco gets the market’s top open source mobile email solution. Juventus wins (heaven forbid!), and Funambol gets the greatest open source Enterprise Content Management solution. Software only (no ugly Blackberries or server hardware included).

Deal, Fabrizio? Think your overpaid team can keep up with Europe’s rising force? Nah, neither did I.

If anyone else wants to weigh in, put your software on the line. I’ll keep track of bets.

[Pictured: Patrick Vieira, running in abject terror at the prospect of facing his old club, Arsenal.]

SearchOpenSource has a great interview with Kevin Cochrane, Alfresco’s VP of Engineering, WCM (and employee #4 at Interwoven and that company’s creator of TeamSite). Kevin is a great guy and a strong asset for Afresco.

Among the gems from the interview:

What challenges do you expect, or want to tackle in this space?

Cochrane: I don’t think there are so many challenges today as there are opportunities. Historically, what customers have seen from the commercial vendors are products that are very difficult to use, to install, and get up and running. With Alfresco, what we will attempt to accomplish with our platform is an extremely easy to install and run application.

We aim to make it the Web content management process as easy as saving a [Microsoft] Word document to a network drive. Our challenge is so to get up and running, but we have the opportunity to get Web content management to a place that is as easy as Alfresco has made content collaboration. As an example, when a user is done with a Word document and wants to save, they should be able to have right click and save, then have that document sent out to multiple Web properties.

And another:

Was Interwoven well-versed in open source technologies? How will working at Alfresco be a different experience in this respect?

Cochrane: In my opinion no commercial vendor is as well-versed in open source software as they should be. This is not unique to Interwoven, but to the entire space. Coming from Interwoven to the open source world, it was remarkable - the level of innovation and the degree of participation in the developer community….

At Interwoven I saw the need for a clean-slate approach to enterprise content management, for leveraging new standards and technologies to build a common platform to support such key business needs as collaboration, document management and Web content management. I believe Alfresco is an exact match for the needs I see in the marketplace. The large, established vendors are not meeting the demand for easy-to-use, easy-to-deploy applications that are accessible to the average developer, departmental business manager or SMB.

At commercial, proprietary platform firms there are also very lengthy development cycles, and you have to go through the sales reps and sales engineers to get engineers to communicate. There are all these filters to get the engineers to connect. At Alfresco the wonderful thing is the engineers are on the front line and are connected with those who deploy products. They are on the product roadmap together. There’s not some project manager in an ivory tower handing down commandments on what thou shall not release.