Professional Open Source

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Dec 13, 2013 (4 years and 18 days ago)

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© JBoss Inc. 2005



Professional Open Source

Challenges of building a business in open source


Marc Fleury, Ph.D

Founder & CEO

December 13, 2013


2

Internal Use Only

Selling Free Software





“Guys, this is not a bad business plan,

It’s a HORRIBLE business plan”

--

A VC, Feb 2000

3

Internal Use Only

Small Consultancy

JBoss Group LLC

JBoss Inc

Professional Open Source

2004

2003

2002

2001

2000

Developer Tactical Enterprise

2005


1999 : EJB
-
OSS Project


2000 : Training & Consulting


2001 : Documentation for sale


2002 : JBoss Group LLC & Support


2003 : Expansion with new OSS projects


2004 : JBoss Inc, Venture Funding, J2EE 1.4


2005 : JEMS, JBoss Network


The Evolution of JBoss

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What is Professional Open Source


A natural evolution of open source


Up the stack


Methodology for high quality software and support at low cost


Full time developers, Roadmap, release cycles, maintenance,
24X7 Support, Indemnification, Community, Partners, Enterprise
Class Customers.


A real software company


Professional Open Source

FSF

BSD

RedHat

SuSe

Compilers

Text

utilities

Operating systems

Web servers

No business model

Non
-
profit


1
st

generation business model


2
nd

generation business model


Packagers

MySQL

JBoss

Database

Middleware

80’s

90’s

2005

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JBoss Business Model


Traditional Software Company Attributes


Professional Methodology


Product Mgt, Development, QA, Distribution, Support


Core development staff are JBoss Inc employees


Revenue from services


Professional Support


Training


Consulting



Non
-
Traditional Attributes


Zero

license revenue!


Highly leveraged for minimal expenses


Recruiting best talent from Open Source community


Distributed QA & feedback loop through OS community


Low cost Internet
-
based software distribution


Transparency


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Community Adoption


Large community


Over a Quarter of a Million Developers


500+ contributors over time, 100+ Committers, 30+ core (JBoss Inc)


120,000 Forum Posts, 3,000+ commits per month, order(s) of magnitude on competition


#1 in development


More than 5 Million downloads


>40% Market share in TogetherSoft User Survey


#1 in ISV/OEM


Adobe, Aether, Arjuna, Ascential, Autodesk, BMC, Borland, Brightline, Compiere, Compuware,
Computer Associates, e.Piphany, EMC, Filenet, HP, Informatica, Intuit, Iona, Ivis, Jamcracker,
Librados, Mainsoft, McKesson, Mercuary, MySQL, Novell, PingID, Seagull Software, Siebel, Siemens,
Sterling Commerce, Unify, Unisys, Versata, webMethods, Wily and many more all use JBoss today


#1 in app server growth at SI’s


CRN survey puts JBoss Certified Consultant at #2 in fastest growing certification with large systems
integrators (Symantec is first)


#1 in IT production



34% market share (SDTimes, BZResearch)


OnJava.com

JBOSS Microcontainer

JBoss

App

Server

Tomcat

JBoss

Cache

Hibernate

JBoss

jBPM



JBoss

Portal

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Internal Use Only

Customer Adoption

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Customer Satisfaction

JBoss Support Survey, November 2004. 184 Customer responses for JBoss, 84 BEA,
28 IBM, 14 Oracle, 14 Other


Full Report
-

http://www.jboss.com/pdf/supportsurvey.pdf


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Internal Use Only

Analysts


JBoss is Safe



“JBoss uses its
technical and business innovation

in the J2EE application server market to take on the software industry
giants. JBoss delivers the best of both worlds: It is free, portable and standards
-
based, and it enjoys popularity among a
growing number of developers.“


Gartner, Feb. 2004



“Today it has the
hottest J2EE app server

in town, zooming from zero to 60 with happy customers and new investment.”


SD Times in awarding JBoss Top Deployment Platform for 2004 for the second year in a row.



“JBoss and Tomcat are
more than ready for projects in the enterprise
. Firms like CNBC are making big bets on the Java
servlet engine Tomcat, while companies like MCI and Wells Fargo Bank use the JBoss application server.”


Forrester April,
2004



“The modular architecture and AOP capability puts
JBoss AS at the forefront

of this sector.”



Butler Group


May, 2004



“JBoss is attempting to put
Professional Open Source on par with proprietary alternatives

and intends to build out its
middleware stack over the next two years. JBoss Inc. is
driving the JBoss platform to ubiquity
, leveraging the open source
model’s standard
-
setting power along with a range of partners from HP, Unisys, CA, and Novell to small IT support and services
organizations.”


DH Brown, July, 2004.



“Open
-
source JBoss 4.0’s achievement of Java 2, Enterprise Edition (J2EE) compatibility is a
big step toward wider adoption

of the product and open
-
source Java in general.”


Gartner, July, 2004



JBoss has astounded naysayers and alarmed competitors with its
consistent growth
. Fellow open source application servers
Geronimo, backed by Gluecode, and Jonas, Red Hat's choice, are scrambling to keep up, while JBoss wins sales at BEA's
expense.
-

The 451 October, 2004









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JBoss/OSS in Government



OSS provides natural escrow



OSS puts client in driver seat



OSS pricing models more scalable for clients.



JBoss


Early adoption of JBoss JEMS in US Govt agencies


Disa, Darpa, Navy, Mitre, Justice, State…


Govt integrators adoption


Largest deal to date in EU (French IRS)



JBoss Government group


Drew Ladner: ex
-
CIO of treasury head group

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Doing it yourselves

DEEP THOUGHTS

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The vendor perception of OSS


Free developers!


Free marketing!


Free sales!


Free QA!


Free distribution!


De
-
facto standards!


It’s so hot right now!

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The vendor reality of OSS

No Lincenses

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Deep thoughts: Critical mass


No critical mass?


High cost of development, sales, QA, marketing


Just like any “normal” startup


No licenses to grow on


Maintenance base takes time to build


Poorly performing stage of business model


Critical mass


Low cost of sales, marketing, distribution, QA


Still pay for dev must optimized talent


20x your own size (JBoss @100 == 2000)


Highly performing stage of business model



Getting lucky!


Critical mass is a rare event

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Deep thoughts


Subscription based revenues


Highly predictable and renewable


Daily revenue recognition.


Easily cash flow positive


New trend in enterprise buying anyway


Measure the business with cash flow and
renewability vs GAAP profitability


That is the way 50% of WS will value you


Stability of the pricing in 2
nd

generation vs 1
st
.



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Internal Use Only

Perfect Storm conditions




Increasing impact of the net on software
development.


OSS and net are symbiotic


Economic climate


Value is important, pay for usage not for shelfware


Growing acceptance of Open Source


Good value, good support, good price


Value created is shared with users


Savings in companies, value in ours


OSS is here to stay