Asay the Alfrescan

Peter Galli of eWeek has an interesting article entitled “Can Windows and Open Source Learn to Play Nice?”. It’s a decent attempt to bridge the (apparent) divide between Microsoft and the open source applications, and other software, that run on Windows.

“Open source is a way of building software and, in its most basic sense, there is nothing incompatible [between] the concept of open source and commercial software.

“But the GPL has an inherent incompatibility that is, to my knowledge, impossible to overcome,” Bob Muglia, the senior vice president of Microsoft’s server and tools business, told eWEEK in an interview here at Microsoft’s annual TechEd developer conference on June 12.

A commercial company has to build intellectual property, while the GPL, by its very nature, does not allow intellectual property to be built, making the two approaches fundamentally incompatible, Muglia said.

Licenses like the BSD (Berkeley Software Distribution) and commercial software, on the other hand, are quite compatible with one another, he observed.

“We are open to ways of working with the open-source community broadly, and even in the GPL space we are trying to find ways in which we can build bridges to GPL, but the bridge has to be carefully constructed,” Muglia said.

I think, first off, that Bob needs to drop “commercial” versus “open source.” I have to think that Red Hat considers itself very commercial. So, though the nomenclature might suit you, Bob, try using the more accurate term for Microsoft: closed. Proprietary. Whatever. I don’t think you view the word as

Secondly, the GPL flap strikes me as much about nothing (and I’ll resist making the joke that Microsoft worries GPL’d code might infect its own code with things like security, quality, stability, etc. . Over half the downloads of SugarCRM, JBoss, Alfresco, etc. are on Windows. Not Linux. Not Solaris. Windows. And everything is just fine. No, these are not GPL products - they’re MPL or LGPL. But a GPL application could run on Windows with nary a hint of trouble for Microsoft. This is old news. Apparently, Microsoft hasn’t been reading the news for the past, oh, six years?

Speaking of “better late than never,” it seems that part of this open source outreach has been spawned by a realization that not everyone cares to run on Windows:

The goal, from both sides, is to meet customer needs, he said, adding, “This is just the more mature view of the way the world is evolving, and we want to make sure that if customers are choosing Linux or other open-source-based products that we have ways of interoperating and working effectively with that.”

Can I just say, “About time!”? I’ve been advocating this move for over a year. It’s a clear, important strategic move. But it has apparently been lost in the glaciers of Redmond. I credit Bill Hilf (and Jason Matusow, before him) with getting this moving. The next step, of course, is to help open source projects/companies interoperate with Office, and not merely Windows/IIS/SQL Server. Anything can run on Windows - that’s easy, and only marginally interesting. For open source applications companies, integration with Microsoft applications is the higher value partnership.

I genuinely think Microsoft wants to cooperate with the open source world. Not because it is generous, but because it is in its shareholder interest to do so. This is the right motivation for any corporation. It still has a lot to learn but, then, so does the open source world.

One thing that I wish is that Microsoft would cast aside some of its cherished positioning. Some of it was noted above, but here’s a final one that drives me crazy:

…[I]ntegration is tough in a distributed environment, and architectural boundaries have to be set up between components, which is a good thing, he said. Now Microsoft plans to do as much of that as it can in the future.

Open source, on the other hand, historically has had a tough time building integrated solutions in that distributed fashion, Muglia said, and, “Our customers demand that from us. So there are certain things we have to do that are core to our development and our customers that we can’t learn from open source because they are not doing that.”

The (major) quibble I take with Bob’s statement is that the kind of integration he’s talking about only works between Microsoft products (and even then not very well much of the time) - the rest of the world has understood “distributed integration” for some time, because we live in a heterogenous world. Welcome to it, Microsoft: glad to see you may have to play by the rules the rest of us live by, now that you’re winning a lot less often than before.

Come on in. The water is fine. Just don’t mind the sharks.

Rivet Logic has been an exceptional partner for Alfresco. They provide much of our training courses in the US and have gone the extra mile in digging deep into our code so that they can support customer implementations.

This expertise shows through in the work they did at Swansea Housing Association. You can read the full case study here, and the highlights below.

Company
Swansea Housing Association, a mid-size property management and real estate development organization.

Challenge
To find a better way to manage the increasingly overwhelming amount of new and existing documents, lower IT costs, and improve productivity.

Solution
Swansea Housing Association turned to Alfresco, the open source alternative for enterprise content management. Rivet Logic – an Alfresco Certified Gold Partner – provided configuration, deployment, and support assistance to ensure a rapid and successful rollout.

Results
Swansea easily manages, tracks, and shares files through the Alfresco content repository, eliminating ad-hoc workflows in favor of structured document lifecycle management and impteam collaboration. Housing Association knew it needed a new system for managing content. The Association develops and manages over $200 million in property and real estate and works with planners, architects, and public administration officials over the course of several projects. As you can expect, Swansea generates an overwhelming amount of documentation.

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.

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….

Given the positive feedback I’ve had on the idea to bring an implementation/systems integrator focus to OSBC Boston 2006, I figured I could start the conversation here by discussing some of my findings about choosing a strong SI partner.

In my experience, different SIs bring different strengths, and it’s not clear that one is necessarily better than the other. Some of the different types I’ve worked with at Novell and Alfresco:

1. Open Source Savvy. Systems integrators with a strong open source background can be a huge benefit in pitching reluctant customers. You don’t waste time trying to bring them up to speed on the “Why open source?” question, and they generally have solid customer references to help newbies “cross the chasm.” The downside to open source SIs is that they don’t always have good depth in a given market (CRM, ERP, ECM, etc.). Worse, because their backgrounds tend to be with “in the wild” open source projects, they sometimes have a hard time pitching commercial open source alternatives.

   It’s therefore imperative that you work out a clear sales strategy/competitive differentiation with your open source SIs. In Alfresco’s case, for example, one of our partners - Cignex - has traditionally been a Plone shop. They found that a number of customers wanted a Java-based ECM offering (Alfresco is J2EE-based), however, and have established clear guidelines for when they pitch Alfresco versus Plone, making us comfortable that they’re not undercutting us or underselling us.

2. Proprietary Solution Savvy. These are SIs who have a long track record in implementing SAP, Documentum, Siebel CRM, etc. These partners are great because they tend to have excellent customer references and have felt their clients’ pain acutely, which usually stems from implementing overly expensive, inflexible, and featured products. They tend to see open source offerings as a low-cost alternative to their more costly, proprietary partner offerings.

   The downside with these partners is that they tend to lack a sophisticated understanding of open source and therefore don’t always pitch this value accurately or emphatically. You need to work with these partners to help them see open source as more about flexibility, choice, and innovation than it is about cost.

I haven’t found either type of SI partner to necessarily be generally better than the other. Each has its strengths and weaknesses and should be brought into deals accordingly. I have found, however, a few more things:

1. Size doesn’t matter. Some of our best SI partners are 3-5-person shops. They are hungry to work with us and do exceptional work.

2. They’re not in it for the license revenue. Because open source solutions tend to cost less, 10-50% in margin won’t mean as much as it will in a bloated, proprietary software deal. But the good news is that there is still plenty of money for them to make in implementation. Open source doesn’t obviate the need for customization to an organization’s business processes.
3. SIs are absolutely critical to open source’s success. A successful open source business model is one that scales well beyond its own employees. SIs give an open source company leverage and range. Building a robust SI channel is therefore one of the most important things an open source startup can do (in addition to building out a strong inside sales team).
4. To pay or not to pay? At Alfresco, without exception our best SIs are those that invest the most in Alfresco. They’re the proactive partners who get neck-deep in the code and end up understanding it as well as we do. Generally speaking, they’re also the ones who invest money upfront in our partner program. I’m not sure whether the commitment is a consequence of having invested actual dollars, or if it’s a trailing indicator, but the two invariably go together. Lesson? If someone isn’t willing to invest at least $2,000 in your company (in order to make a multiple of that on their first deal alone), are they really that committed to your product? Probably not.

I’d be grateful for any other insights people may have into this. Please share.