Adopting an Open Source Business Model Open Source Product Strategy. Utpal Bhatt, Actuate

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Full text

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Adopting an Open Source Business Model

Open Source Product Strategy

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Agenda

Introduction

Product Strategy Options

Actuate and Open Source

A Product Strategy Checklist

Wrap-Up: Conclusions (So Far)

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Publicly Traded BIRT – on NASDAQ

Revenues $138.9 million in FY2012

Profitability 22% non-GAAP Operating Margin in FY2012 Employees /

Community 600+ employees worldwide / 2,500,000+ BIRT Developers Headquarters San Mateo, California

Offices Worldwide Sales Offices

R&D: San Mateo, Kansas City, Shanghai, Toronto, Barcelona

Customers Over 5,000 top-tier accounts in banking, insurance, securities, government, health care, education, utilities and OEM in high tech

Open Source Founded Eclipse BIRT Project in 2004

Actuate Corporation

Background

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Simplicity that makes simple layouts easy Power to create very complex layouts BIRT

Actuate’s Involvement in Open Source

BIRT: Business Intelligence and Reporting Tools

• Makes all data-driven content development easy • Modern, web-page design metaphor

• Open and standards-based

• Flexible with rich programmatic control • Full support for libraries and reuse

• Foundation for a range of solutions

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Open Source

Product Strategy Options

Support for Open Source

Services Platform Support

Cost Reduction Using Open Source

Bundling

Cloud Provider

Embedding

Development of Open Source

Contribution

Open Source Project

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A Product Strategy Checklist

Revenue Strategy and Triggers

Licensing and Intellectual Property

Feature Strategy

Development Team and Process

Open Source Project/Community

Organizational Alignment

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Revenue Strategy and Triggers

Monetization in an Open Source World

Revenue Generation Choices…

Embedding Open Source

• Open source technology leveraged in commercial product offering

• Cost-reduction strategy – no direct revenue from open source software

Support and Services

• Generate revenue from support, training, certification and/or consulting

• Leverage your expertise as sponsor/contributor to the project

Dual License

• Open source code is available using a reciprocal/restricted license

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Revenue Strategy and Triggers

Monetization in an Open Source World

Revenue Generation Choices (Continued)…

Actuate Model is Primarily Open Core Open Core: Value-Add Products That Extend Open Source Offering

• Commercially licensed products

• Strategy may assume a relatively small % of users will purchase these

Advertising

• Open Source software is free and supported by advertising revenue

• Typically only used in consumer-oriented projects

“Exit Strategy”

• Technology fits into a wider market that may interest other vendors

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Licensing and Intellectual Property

Open Source License Choice

• License choice is critical for adoption and revenue generation

• To develop and grow a community, the right license is required

• Is the license good for IT organizations?

• Is the license good for ISVs?

• Is the license good for extending the technology?

• Open source license that is too restrictive may limit adoption

• Open source license that is too open may limit revenue opportunity

• Dual Licensing

• Open-Core Licensing

• Open-and-Closed Licensing

• Single Open Source License

• Assembled Open Source

• Closed License

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Feature Strategy

What to Open Source, What Not to Open Source?

Be Careful Not to Erode Your Revenue Strategy…

Provide Real Value to Open Source Community

• Open Source, but not useful, will not get traction

• Open Source, but needs your deployment platform, will not get traction

Remember: Good Product Design is (Even More) Important

• Extremely easy to download, install and get started

• Ease of use is critical – it is too easy for users to “walk away” • Make your technology an easy decision for your target users

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Feature and Licensing Strategy

Find the Right Balance

“Open” “Commercial”

Permissive

Restrictive

Features and Functions

License

Open Source

Community

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Feature and Licensing Strategy

Find the Right Balance

“Open” “Commercial”

Permissive

Restrictive

Features and Functions

License

Open Source

Community

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Actuate BIRT Technology Family

Complementing and Extending Eclipse BIRT

Eclipse BIRT

Meet Core Requirements + Deliver Real Value

Development Tools Skill-specific tools for developers and users User Interactivity Engage users with rich, interactive content Deployment Tools Manage, schedule, secure, run and

distribute

High-Scale Distribution

Load-balanced, high availability for

100,000s of users Development Actuate BIRT Extensions Deployment

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Open Source Project/Community

Possible Approaches

Contribute to an existing project

Create and lead a new project in an existing community

Create a new project and community

Existing open source initiatives and distribution channels…

Eclipse.org

Apache.org

GitHub

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Open Source Project/Community

Actuate and the Eclipse Foundation

AUGUST

2004

Actuate Joins Eclipse Foundation as Strategic Developer

and Board Member

Actuate proposed and started

BIRT

Business Intelligence and Reporting Tools Project

… a top-level Eclipse project Instead of going it alone, Actuate chose to partner with the Eclipse Foundation

Adds BI and Reporting as Open Source Project

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Organizational Alignment

Achieve Buy-In from All Stakeholders

Open Source rules are very different…

Define Success Conservatively

• Revenues do not occur overnight • There are no guarantees

• There are valuable intangible benefits • Define and measure realistic goals

Focus on Long-Term Value

As momentum builds over time, you can: • Raise awareness significantly

• Strengthen brand

• Build revenues to respectable levels • Sustain high profitability

Be Prepared to Iterate on the Model

Successful Open Source

Strategies Involve Multiple

Business Units

It is Not Just an

Engineering Initiative

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Sales teams are focused on short-term revenues, so they don’t get excited about long-term, open-source benefits

Starting Point for Entry-Level Accounts

Initiate and maintain relationships with small customers by starting them with BIRT and growing them into a large sale a year or two down the road

Set Sales Expectations Early and Often

Open Source & Traditional Marketing

Open Source distribution complements, but does not replace, traditional

marketing approaches

Organizational Alignment

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Traditional Marketing

Open Source Evangelism

Nurturing a Community: Evangelism

The Open Source Community

Successful Communities do Not Happen Automatically

All strong communities have enthusiastic and active supporters

Management, Project Leads

Opportunities

Dedicate resources to working with and supporting the community:

• The “Evangelism” role

• Actively monitor and respond to forums

• Create “How To” and tutorial content for web site

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Nurturing a Community: Evangelism

BIRT Exchange Community Site

Centralized knowledge hub for BIRT developers

• Access demos, tutorials, tips and techniques, documentation… • Easy for users to contribute content, share knowledge

• Enables developers to be more productive and build applications faster

Explore • Search/sort • Rate, comment • Forums Download • Documentation • Software • Examples Contribute • Report designs • Code samples • Technical tips www.birt-exchange.com

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Wrap-Up: Conclusions (So Far)

BIRT Technology Uptake

Thriving BIRT Community

Over 2.5M developers using BIRT in 157 countries

• BIRT technology deployed in many applications / products

Growing Commercial Success

• Very high growth in BIRT-based product revenue

• High percentage of commercial business starts with Eclipse BIRT

Cumulative BIRT Downloads

More than

12 million

downloads

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Wrap-Up: Conclusions (So Far)

Real Results and Business Benefits

BIRT has enabled Actuate to: • Penetrate new markets

• Extend reach into traditional markets • Strengthen the Actuate brand

• Increase sales and operating margins well above software industry norms

BIRT

Actuate’s new generation of development technologies Industries • Manufacturing • Telecom • Retail • Hospitality Geographies • India • China • Other developing markets

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