Ian’s Blog on Open Source Marketing

One school of thought is that open source is low cost and great for small medium businesses (SMB’s) because that is where the large enterprise software companies (read large and supposedly terrifying) aren’t present. Software companies don’t “own” their customers. In the case of Alfresco, any company may already have Documentum, FileNet, Interwoven or Vignette. The reality is that there is only a 5% to 10% penetration of this software – either on a desktop or on the shelf. What is critical is to focus on people and users in companies and not companies as software fiefdoms.

Alfresco has been very successful in the Global 2000 (particularly financial services, media and professional services) and Government by targeting the non-users of existing ECM systems in these companies. Rather than competitively trying to replace existing installations, Alfresco has targeted the knowledge workers who use shared drives, Microsoft Office, forms for Web contributions and now Social Software for collaborative activities and ECM enabled them. Existing ECM vendors are becoming boutiques, the Gucci and Prada of ECM.

I recently read an excerpt of an excellent report by the 451 group - 451 Commercial Adoption of Open Source - The SMB Market Opportunity. It had a similar opinion. In there it stated:

• The SMB market opportunity for open source software vendors is limited - SMB customers are highly cost conscious and generally lack the IT resources to effectively manage much beyond the simplest project.
• More than 70% of vendors surveyed for this report rely on a direct model to reach SMB customers - Channel strategy is fraught with problems with thin margins and the cost of effectively managing the channel buildout
• Microsoft’s dominance in the SMB market is unlikely to change anytime soon - Open source software that integrates with and support Windows and other Microsoft products will have an advantage
• … may other markets, including Asia, Europe, India and South America may experience rapid growth of Linux and open source software fueled by local government and commercial directives and preferences

Details on the full report can be found at:

http://www.the451.com/caos/caos_detail.php?icid=476

My colleague Matt Asay also wrote a great post on this which can be read at:

http://blogs.cnet.com/8301-13505_1-9831424-16.html?tag=head

So the next time an enterprise software salesman tells you he “owns” an account tell him he will soon be as rare as the Prada suit he wearing (funded by the cost of sale of Enterprise software)

A summary of “A Simple Marketing Model for Enterprise Open Source” can be found at:

http://opensource.sys-con.com/read/431544.htm

When there is a pure technical innovation/discontinuity customers often don’t understand the technology. So it needs to be explained in industry terms. It’s not a “virtual document” it is a “drug submission.” In “Main Street” everyone knows what the technology does. Therefore there is no need to micro-market to a specific vertical, user and application and pray you will cross the chasm to the riches of the tornado. What is needed is to maximize your “Blue Ocean”.

Alfresco targeted, the “Blue Ocean” of non-ECM users who were “Knowledge Workers” who used a shared drive. The S:/drive population. This is the majority of desktop users and much larger than the traditional ECM market. These users want to collaborate and publish to websites easily using their standard tools.

What is important is to integrate into the environment the knowledge worker lives in on a day-to-day basis to make it easier for them to do their job “better”. This has driven Alfresco to ECM-enable the mass usage tools that knowledge workers use in the Global 2000. This has evolved as follows:

• ECM enable the shared drive
• ECM enable MS-Office
• ECM enable forms and Office for simple website contribution (with Virtualization and Sandboxes)

An audience is a audience is an audience and that audience may be customers, partners, prospects or employees. Enterprises are beginning to realize that a Social Computing Tool is reaching an audience of customers, partners and prospects as much as a website. To drive this we evolved to offer:

• ECM enable publishing to leading Blogs – WordPress and TypePad
• ECM enable publishing to leading Social Networking tools - Facebook

In all of these environments ECM is critical, but must be provided as a service (”Content-as-a-Service”) from the mass usage tool the knowledge worker is using as opposed to a specialist ECM tool that is part of and monolithic ECM suite. As I wrote in my previous post, innovation is focused on ease-of-use making it simple and often transparent for for knowledge workers to get access to ECM. The suite approach stems from the 1990’s when ECM vendors went on a spending spree buying up companies at bargain prices after the .com bubble. This strategy says we have all of the tools you want - they may not be what you use in your daily work, they may not be what you want to use, you may need to get trained on how to use them, they may not be integrated, they may use separate architectures - but hey look at how many tools we have in our suite. We have everything you could possibly ever (read probably never for the majority of users) need.That’s why ECM enabling existing mass usage tools with Content-as-a-service is the way forward.
Kyle McNabb in a very interesting blog wrote:

http://blogs.forrester.com/information_management/2007/11/facebook-alfres.html

“And we’re just starting to tap into the persuasive power of content as organizations try to use content, across multiple channels (not just the Web site) to improve the customer experience. And there’s a mountain of content stuck on network file shares that need to be put to use to help improve how information workers get their jobs done more effectively. My contention: You can’t put this content to use if you don’t manage it. You need to manage this content to ensure you’ve got a single source of the truth, that you have the right content ready for use, and that you know where to get it…

But organizations, and information & knowledge management professionals, will want a way to define and enforce how this information gets managed, how it gets retained, and MOST IMPORTANTLY, how it will be used, regardless of where it physically lives — Facebook, Microsoft SharePoint, or on my dreaded C: drive (I can never find anything on it).

The Blue Ocean is being ECM enabled.