80% Of The Functionality For 500% Of The Cost

The title of this blog post could be: Why open source matters to me, but I like the former because it’s racier and I hear that gets readers. Anyway, I was prompted to write this because of a comment and question posed me by a MindTouch open source community member that really is best answered/satisfied by me explaining this and also sharing my ideas about Open Core. At any rate, to answer why open source matters to me I really have to respond from two distinct perspectives. First I’ll answer it on a personal level and then as the CEO of an enterprise software company.

square avatarHere is my "Aaron hat". I received my degree in Computer Science from UNC-Chapel Hill where I did pretty much all my course work, like most CS students, on an open source stack. I’ve helped to start several non-profits tasked with bridging the digital divide in under-served and predominately minority communities where I primarily used an open source stack.  I’ve owned a couple small businesses in which I benefited a great deal by building on, guess what, primarily an open source stack. So, let me tell you on a personal level I have very strong convictions about open source. There are many reasons, but I will present you my top two.

1). Open source is usually a better product than proprietary products. This is often due to standards compliance and just overall improved quality yielded from an open development model. Moreover, proprietary vendors regularly spend $10:$1 in a sales to product development dollar ratio. Meaning, for every $1 spent on product development, $10 are spent on marketing and selling the product. Open source companies regularly spend $1:$1 or  $2:$1 in a sales to development dollar ratio. This means the majority of open source companies’ resources are poured into making a great product and fulfilling the needs of the users and customers. Think about this. When you buy proprietary software MOST of the money you spend is paying them to sell to you….Pause….read this again: When you buy proprietary software MOST of the money you spend is paying them to sell to you. Ridiculous!! Because open source vendors spend more resources on making a great product open source products are often higher quality and more secure. The old notion that open source companies offer 80% of the functionality at 20% of the cost of proprietary vendors is quickly becoming the exception and not the rule. In fact, it is increasingly the case proprietary software vendors are offering 80% of the functionality at 500% the cost of open source vendors! MindTouch is a good example of an open source company that is by far out-innovating all proprietary vendors. There are many other examples too.

2). Open source is better for society. My non-profit work and the many hundreds of thousands of active MindTouch installations can attest to this. You don’t have to look far to find evidence of how MindTouch is making the World a better place because we are open source. Here’s one example: http://www.dharavi.org , which is a technology community center and urban planning non-profit that uses MindTouch Core to organize and collaborate on how to improve the quality of life in the World’s largest slum. If you’ve seen "Slumdog Millionaire" you will recognize Dharavi as the location filmed during the first third of the movie. There are thousands of other examples of schools, non-profits, and new businesses building on MindTouch Core that are doing great work and benefiting their communities.

Now my "CEO hat" is on. :-) Competing in enterprise software against massive proprietary players that have nearly unlimited marketing and sales budgets is simply too difficult and costly for a young company. How do you compete when your competition is buying the favor of enterprise decision makers with golf tee times, extravagant dinners, exotic trips, etc… ? You can’t. Moreover, young companies do not have the resources to be heard above the advertising budgets of the giants. The only way to be successful is to create "pull" on the product rather than trying to compete by "pushing" the product down the throats of your prospective customers. The easiest way to create pull on your product, and it is NOT easy, is by employing an open source development model to build a community of users that will evangelize and champion the product within their organization. If by some miracle you achieve this community of champions their role is to fight, with common sense, against the (effective) corruption of a broken enterprise software buying model that forces customers to spend huge sums of money for proprietary companies to SELL them inferior products. The role of these champions is critically important and they are the only way open source companies can keep their prices down and focus the majority of the company’s resources on improving the product instead of marketing and selling. In short, open source is a disruptive business force that makes it possible to compete with larger proprietary companies.

It’s like I say all the time, MindTouch doesn’t SELL our software. People BUY it.

If you’ve read through this whole blog post you deserve the reward of MindTouch Core, free of charge. Enjoy and please remember your responsibility to spread the word about MindTouch within your company and also through the twitter and blog-o-spheres. :-)

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4 Comments

  1. well said Aaron. I wonder if we could orchestrate a stunt in which the open source companies of the world all banded together and pitched in to buy a WSJ full-page ad to convey this sentiment to enterprise decision makers? As much as higher-ups like schmoozing i have to imagine profits and op efficiency trump tee times…

    sean

    • I definitely think those of us who are building open source software businesses need to be more focused in communicating this message. If we all continue to beat this drum we can accelerate the pace in which we're changing enterprise software buying and spending habits as well as improve the software people use.

  2. Aaron,
    You talk the talk but do not walk the walk.
    I have posted a letter to you on the first page of Voterswiki. us
    Please read it.
    Thanks,
    Bill Field

    • Hi Bill,

      I responded via email and also in the page comments of the new letter and page comments of the previous letter. I'm disappointed MindTouch didn't meet your skill set and fulfill your vision. :-( I hope this interesting project is developed and moves forward.

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