Selling open source

Open source is moving into a “more pragmatic state of evolution,” says Forrester Research’s open source analyst Michael Goulde.

Immediately prior to joining Forrester, Goulde was a product manager at Microsoft, where he worked on competitive strategy and product planning in the Windows server organisation.

“At Forrester we’re seeing a significant amount of use of open source in large enterprises, companies who don’t ordinarily make technology decisions based on philosophy,” Goulde says.

“They’re choosing open source because of the flexibility it gives them in development; they’re selecting open source in some cases because they feel a particular piece of open source is actually better than the commercial alternative.”

As such, opportunities exist for the channel to offer open source enterprise software and target the top of the software stack.

“I think good advice to a reseller would be to pick something that you’re comfortable with, and that there’s customer demand for, in the industries that you’re working in. Bringing in an open source solution is a good way to differentiate yourself initially and then you can build on that with some other applications that are complimentary,” he says. 

“You’re not going to be the next Microsoft but you can do very well. You want to carve out a niche for yourself. I think the days of the Microsoft approach, or even the Oracle approach for that matter, of providing a complete software stack under a commercial licence, are numbered. I think that stack is going to come from many different sources and many different suppliers.”

Open source offers smaller channel players the chance to create very viable businesses around open source solutions at “the top of the software stack” such as CRM and ERP, says Con Zymaris, chief executive of Cybersource, a open source-focused IT services and solution provider based in Melbourne.

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“These are the types of solutions that are a must for most channel players looking to put a major feather in their cap. They offer ways to generate new revenue and ways to start detaching their business from the whim and fancy of any particular vendor or distributor,” Zymaris says.

“Suddenly you’re not paying massive licence fees so your $20,000 CRM rollout will be half the price of the competitors and you control the whole lot and you make more profit. That takes obviously a bit of chutzpah to do because at that point you’ve moved beyond being a box mover or just a front end for somebody else who does all the work. So it’s obviously not for everyone in the channel, but it will allow you to differentiate, to take full control of your business and not leave it up to any distributor or back-end vendor’s whim. Most players in the channel live and die based on what their back-end suppliers say or do.”

While the freedom and flexibility of open source may open up new opportunities for the channel, it comes at a price, warns Microsoft Australia competitive strategy manager, Martin Gregory.

“If you step back and ask what’s the biggest difference between the open source space and a commercial software organisation, it would be open source has ultimate flexibility. You have access to the source code so if you want to change it and make it do something different you can go and do that,” Gregory says.

 

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