FITT Toolbox: Open Source Business Model

FITT Toolbox: Open Source Business Model

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  Open Source BusinessCase FITT – Fostering Interregional Exchange in ICT Technology Transfer – www.FITT-for-Innovation.eu Except where otherwise noted, this work is licensed under a Creative Commons Attribution 3.0 License.
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  Practice in General  Siruna NV has developed Software for development of mobile websites through a dual Open source business model  Nature of reusability: this model can be easily copied as far as it helps to cover development costs by the help of a large and free developer community, helps to market the product, quickly sets a reference in a rapidly evolving market and succeeds in creating value within an open source setting.  Case is mostly generic  Quality/Nature of stakeholders: High tech start-up company, starting form research results  Processes related to case: business model, IP management 2 | 03/2011 Open Source Business Case
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  How we canhelp you open the mobile experience.
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  Who are we?
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  About Us  The experts in web-to-mobile: Make Anything Mobile  Professional Open Source company  Venture Capital backed startup  Located in Belgium | UK | US | India | UAE | China 5
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  : the leading OPEN SOURCE platform and managed SOLUTION provider for mobile web applications
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  Internet is everywhere CONTENT USER experience WEB App’s
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  Nice USABLE stuff… Mobile News Mobile Search Mobile Portal 8 (POWERED BY SIRUNA) (POWERED BY SIRUNA) (POWERED BY SIRUNA) m.deredactie.be m.goldenpages.ie m.zita.be (STANDARD WEBSITE) (STANDARD WEBSITE) (STANDARD WEBSITE) www.deredactie.be www.goldenpages.ie www.zita.be
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  Open vs. ClosedSource OPEN SOURCE CLOSED SOURCE  Revenue from services  Selling software licenses  Source code is publically  Source code protected as available « Copyleft » intellectual property  Source can be adapted /  Customer can’t get the improved source code  Development by a Development inside the community company The business models are linked with the license model: •GPL/LGPL business models •BSD/Apache models •Multi license business models: Dual license
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  Customer value
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  First Generation Business Models Revenues are generated through support, consulting, Services based training, documentation A free OS product is used to create a market position for Loss leader the traditional commercial software. Vendors as IBM, Apple, Novell, Oracle.. realize that OS provides a way to compete against Microsoft because: Fight competition • They can reduce R&D costs • Eliminate dependencies on competitor’s technology • Of the access to a large, external development community Example: instead of competing with Symbian, Motorola committed to OS 11
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  Siruna OSS strategy  Is NOT to create a large developer community  Can be a side effect  We control it through the Contributor License Agreement. (CLA)  Disruptive business model  People can try the code, see the internals  They buy what they like (quality)  They can modify the code for their customer  Create a developer/user pull 12
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  Dual Licensing  Product available under a regular commercial license for commercial customers and under a free software licence (AGPL) for those who live by the principles of free software  The product is technically identical under both licences, but the financials and the legal ramifications are different  It is up to the customer to decide what path he wants to follow and what licence to use but restricted by our policy & commercial strategy.  MySQL AB, Sleepycat Software & Trolltech AS use dual licensing Siruna is the copyright holder
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  Copyright of Siruna Necessary condition for dual licensing. Gives us rights and protection  We decide what license is used by who: • Commercial • AGPL  We can introduce “golden lines” or credentials.  Our “golden lines”  Adapted for Mobile by Siruna  Google Analytics transformer insert 14
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  Affero GPL license GPL license:  Everything that touches it becomes GPL (viral)  If you redistribute a GPL software package, you need to publish your code  Service provider loophole AGPL license:  Closes the MSP loophole  Software distribution & network access 15
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  OSS Sales Funnel 16
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  OSS Marketing 17
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  Open Source Trends  By 2010, Global IT organizations will use OS in 80% of infrastructure investments and in 25% of business software investments (Source: Gartner).  OS impact on infrastructure SW is 20 B $ growing to 46 B $ in 2011 OS infrastructure SW 16.000,0 14.000,0 12.000,0 OS DBMS 10.000,0 AD 8.000,0 Security AIM 6.000,0 ITOM 4.000,0 Others 2.000,0 0,0 2004 2005 2006 2007 2008 2009 2010 2011 (Source GIMV ) 18
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  VC activity  Increased VC investment in OS:  2005: 294 M $ was invested  2006: 475 M $ was invested, up 61% from 2005 (Source: Computer Business Review, Feb. 2007)  Why do VCs invest in Open-Source?  The increased adoption of OS by corporate users.  Attracted by the success of Red Hat,:  Marketcap of 3.8 B $ and .. profitable!  Revenues increasing very fast: 200 M $ in 2005, 280 M $ in 2006 and 400 M $ in 2007  Belief that there could me more money made from OS than from proprietary software  Lower cost of development  Also lower cost of sales & marketing due to the viral effect of the dvlpt community  OS leads to better quality assurance, more frequent releases, community dvlpt (Source GIMV ) 19
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  M&A activity  Recent deals:  There were 35 transactions  There were 3 significant transactions; • Sun acquiring MySQL for 1 B $, EV/S of 14.3 x • Yahoo acquiring Zimbra for 350 M $ (email collaboration), • Nokia acquiring Trolltech for 153 M $, • Citrix acquiring Xensource for 500 M $ • RedHat acquiring JBoss for 350 M $ (Source GIMV ) 20
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  OSS Facts &Figures MySQL – Database vendor  Founded in 1995.  Challenger for Oracle, Sybase, ..  External VC in 2001:  Revenues • 2002: 6,5 Mio Revenue • 2005: 34 Mio Euro • 2006: 50 Mio Euro  Exit 2007: Sun acquiring MySQL for 1 B $,  2009: Oracle acquiring Sun OpenBravo – ERP vendor (GIMV investment)  Founded in 2003. (Univ. of Navarra – 2001)  External VC in 2006: 4 Mio Euro from SODENA  Revenue 2007: 1,1 Mio Euro  External VC in 2008: 9 Mio Euro  Target 2008: 3,3 Mio Euro  Target 2010: 24 Mio Euro (requiring 15 Mio Euro investment) 21
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  Contact Us FRANK GIELEN,CEO Zuiderpoort Office Park Gaston Crommenlaan 10/101 9050 Gent, Belgium Tel +32 (0)9 331 48 36 contact@siruna.com 22