Business & Technology Nexus

Dave Stephens on technology and business trends

Competing with the “Open Source Way”

with 6 comments

Using Sourceforge as a proxy for activity in the open source movement, it’s interesting to see where the projects are today. And with over 100,000 active projects on Sourceforge alone, that can take quite a while.

There is a handy “map” (directory) of projects here. The top-level categories are Clustering, Database, Development, Enterprise, Financial, Games, Hardware, Multimedia, Networking, Security, SysAdmin, and VoIP. I tend to watch Database, Enterprise, and Financial categories the most.

Now stats seem to be up everywhere, and certainly Enterprise projects seem no different. Sometimes it’s sustained interested, like with Compiere (take a look at the 5+ year download history here). And sometimes particular projects look to be gaining good interest over time, like with (take a look at their download history here).

But wait a minute, you say, isn’t an open source firm. Doesn’t matter. Closed source firms and service providers (Google & Microsoft included) are beginning to open up around the edges and use the movement where it makes sense for them.

And as for-profit open source firms continue to tweak their business models seeking out more revenue (See Matt Asay’s video interview – the “network” is the “new shrinkwrap”), it seems to me there’s the potential for a more head-on collision with closed source than I had previously considered.

What I mean is that the open source advocate’s view is that open source solutions eat away or chip away at their closed competitors, shrinking the overall market size (in $) by bringing down prices and improving TCO, and perhaps offsetting this shrinkage by increasing the overall size of the market. But this traditional view, if I can call it that, assumes closed competitors stand still. What if instead they adapt and provide “me too” open-ness, and essentially engage in the battle in a more headlong fashion.

SugarCRM vs. will prove a very, very interesting battlefield to watch.


Written by Dave Stephens

08/6/06 4:10 PM at 4:10 pm

Posted in Open Source, Opinion

6 Responses

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  1. It is amazing to see so many open source solutions in the Enterprise App/CRM space. How does giving away software make economic sense to these vendors? How does Coupa plan to make money on it’s software innovations?


    08/7/06 8:26 AM at 8:26 am

  2. We will make our API “Open Source”. It does not make commercial sense to make “ebdex Document Exchange” “Open Source” given its a hub and spoke solution.

    Dave, as Biju wrote, I am also very much interested in knowing how you would make money! Whether we like it or not, we all need money!

    Manoj Ranaweera

    08/7/06 9:21 AM at 9:21 am

  3. biju, manoj, thx.. i’ll need to post on how open source and commercial interests can align – there are a lot of open source commercial business models out there. but there’s still a lot of experimentation going on in the space.

    Dave Stephens

    08/7/06 9:43 AM at 9:43 am

  4. To quote Manoj Ranaweera above,

    >>We will make our API “Open Source”. It does not make commercial sense to make “ebdex Document Exchange” “Open Source” given its a hub and spoke solution.

    If I am a developer,

    why would I care if your API is open source or closed source? If it is not standards based, what’s the incentive for me to make use of your API? If it’s not LGPL based, what’s the incentive for me to evaluate it? If you are going to make money ultimately through your commercial entity, why would I contribute my time and effort for your cause, unless there is some benefit for me as well?

    If it is based on some standards, if my interest is to implement the standard, I will probably write the API myself. But if I want to make use of your API into my own applicatation, the moment it’s not LGPL, then I wouldn’t care a bit.

    Now, if I am a end user,

    why do I care if your software is open source, if it’s java or COBOL as long as it can get my work done. The reason why your company’s webserver is using Apache 1.3.26 with Frontpage on a Red-Hat Linux is probably not because Apache’s code is available as an open source for you to look at the code, but because it’s “free” to either your or your hosting company.

    Great open source softwares linke Linux and Apache succeeded because these are applications that wets their appetite. How many college kids are interested in writing an Inventory Management or a Procurement software when there is so much cooler stuff like Flickr or MySpace type of stuff going on?

    There is so much more I can keep writing on this subject. I am not saying that open source is not a good idea. Instead, I am saying that one can’t expect to automatically survive in a competitve market by just making their code open source.

    I was surprised to see Coupa being offered under LGPL! Not sure what made Dave and his guys choose this license but I haven’t seen that many non-library type of solutions being offered as LGPLs. I mean, for all practical purposes nothing prevents me to repackage the entire software with my add-ons and if I some how make money, not pay a single dime to Coupa! Well, not that I have time and energy to do that :). I will wait and watch how this shapes up.


    08/8/06 9:14 PM at 9:14 pm

  5. I’m definitely not going to argue that Procurement is “sexy”. Procurement isn’t Linux. But that’s not what it takes to be successful in open source applications. There are several examples of companies making headway (yes, it is early). As an example, sales force automation isn’t the most sexy thing either, but SugarCRM seems to be getting a community developed. Same thing for other vendors in content management, business intellligence, etc.

    On the LGPL issue, I’m not a lawyer and maybe you are. You’ll see that enterprise application open source projects have gone with mostly GPL, LGPL and MPL (or derivates of MPL). We felt our license choice offers the best opportunity for our customers, our channel partners and ourselves to be successful. Could someone fork our Open Source code…yes. That’s actually a fundamental aspect of open source. That isn’t necessarily bad from Coupa’s standpoint…nor is it bad from a market standpoint. We also think that some companies will want to go with our Enterprise Edition, which will include additional innovative features, enhanced support, product updates, certifications, etc.

    In the end, we believe that the Coupa solution offers the best value for customers. We’re bringing innovation to a market that hasn’t seen much lately. We know this because that’s what companies are telling us.

    Noah Eisner

    08/9/06 8:30 AM at 8:30 am

  6. […] Dave Stephens, CEO of Coupa commented on Competing with the “Open Source Way" at his Procurement Central. Extracts from his comments (modified to suit): […]

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