The Open Source Pragmatist

Recently I’ve been fielding a number of questions about why the company I work for, Levementum, decided to open an office in Australia (see press release: http://www.prweb.com/releases/20100814/levementum_sydney_au/prweb4386444.htm.)

The first thing I tell them to do, is look at the following Global Open Source Adoption webpage sponsored by RedHat: http://www.redhat.com/about/where-is-open-source/activity/.  Australian adoption and environmental acceptance is widespread and growing.  Few countries in the world have seen the kind of growth that we’re seeing down under. Why?

Australia leads the way in OSS adoption

1. They see it as a national imperative to help reverse the tide of excess IT imports: Consider this: from the charter of the FOSS/Australia organization:

“According to the Australian Bureau of Statistics, Information and Communications Technology (ICT) represents 13.8 per cent of total investment in Australia. According to a 2006 study, ICT comprises 8.4 per cent of all imports, but only 2.8 per cent of all exports. Australia loses more from importing ICT than we gain from exporting wheat and coal combined.  Through leveraging FOSS, local companies are able to create and offer world-class products and services….When you support FOSS, you are supporting Australian innovation and employment.”

2. Growth in the open source services sector:  While we aren’t late to the party down under, we’re certainly not the first OSS service players down there.  See an excerpt from the “Open Source Industry Australia” group:

“With at least sixteen independent South Australian organisations reportedly offering support services for open source software this demonstrates that there is real choice available to South Australian organisations seeking to obtain support for open source software on a commercial basis.”

3. Government backing.   Australians are looking for new and innovative ways of leveraging open source in the government sector.

4. Technology leadership in Australia.  Australia continues to lead the way terms of education and investment in technology.

5. Raw data.  Our biggest partner,SugarCRM has been growing in leaps and bounds in Australia and Asia, and in general, Open source solutions like Sugar have tremendous rates of adoption in Australia. 

It’s only natural that Levementum, as a global leader in SugarCRM and other open source solutions, expands its presence there.

Insight & Thoughts, Software & Technology asean, asia, asia pacific, australia, compiere, crm, FLOSS, government, guilbeau, levementum, magento, mindtouch, mobisson, open source software, open-source, oss, pentaho, sugarcrm

This past October 2009, I was lucky enough to be invited to participate in the Free Libre Open Source Summit and Think Tank in Paris, France. It was an opportunity for me to learn from the best and brightest that the world of open source has to offer – but more importantly, it was an opportunity to understand why, given the global relevance and reach of open source, Europe has so clearly established itself as the most dominating “consumer” of open source enterprise applications.

If you take one look at the global deployment footprint of say, a SugarCRM, or say an OpenBravo, clearly something is going on across the pond, that makes them more receptive, more successful, more bold and more committed, to the adoption of open source enterprise applications.  Given the spirit of innovation, and the burgeoning commercial open source business emerging in the US, I was curious…why there? why not here in the States?  why not in Asia?  Whats different?

At the conference, I came across folks from a number of VARs and integrators.  I was introduced to Smile consulting (www.smile.fr), a 300 person firm focused on Open Source implementation in France.  The team from RedPill-Linpro, the open source stalwarts from the Nordic region.  There were countless mid sized open source firms, all successful, all bullish about the future.

I immediately started to wonder, where the hell are the open source firms in the US?  Sure, we’ve got an abundance of innovators at the individual contributor level.  But large going concerns, exclusively focused on open source?  You’ve got us – Levementum,  and maybe Optaros, and maybe 2-3 others that are out there…but thats it.  And none of us are close to the big European players in size or reach.  So…Why?  After 6 glasses of Beaujolais in a bar on the Champs – I started to get some answers.  I’d name the individual references, but I suppose they were casualties of the investigative process(!).

I’ve come up with a few reasons.  Its not comprehensive, but its a start.

1. The reach of Government and the power of associations in Europe: No one doubts that the reach of government in Europe is far deeper than we’re accustomed to in the US.  Invariably, as is the case with most agencies of the state – there is a need to do more with less.  The notion of ROI tends to be “cost reference” versus the traditional “value reference” as it relates to implementation of technology.  Of course, value is paramount with respect to implementation, but the purchase profiles and criterion are different.  Additionally there is a clear distrust that the EU has for the big “IT gorillas” of the US…the Oracles, the Microsofts, et al.  The combination of cost sensitivity, government policy,  and mistrust has led European government agencies to supremely value “control of their destinies”…perhaps more so than their US counterparts.  Clearly open source gives them this control: on cost, on features, on scale, on customization.  This explanation, provided by my dear friends in Paris, made a lot of sense to me.

2. The need for regionally customized solutions in Europe. As a native of Boston, Mass, I can tell you there’s a lot of difference between Beantown and say, the Big Apple.  It starts with the Sox and the evil empire…but thats another story.  Back to point…even with the great diversity of the US, we still have a fairly homogeneous culture of business. Try and contrast French business practices with say Italian business practices.  Try and take your Spanish salesforce, and send them to close a deal in Copenhagen.  Doable yes…easy no.  Europeans are fiercely proud of their language, culture and history, and it permeates the business sphere in every way imaginable.  The walls start with language differences, and follow through to customs and legal practice.  Invariably, a business solution that works in Kiev, is likely not going to seamlessly work in London.  Open source applications, buttressed by their optimal flexibility, clean architectures, and open development environments, offer the European regions to shape a core of business features to their regional needs.  The US regions have much less of a need in this dimension.  These characteristics, that are inherent to open source, are vital in Europe.

3. The fall of the wall and the influx of skilled Eastern European engineers into the European market. With the fall of communism in Europe, millions of eastern European engineers and scientists were emancipated, armed tremendous skill, unparalleled resourcefulness, and a hunger for tools.  With a dearth of capital available to them…many of these great scientists and engineers jumped head long into open-source.  This created not only a skilled mass of open source experts and professionals, but also created new innovations that served to accelerate open source application adoption throughout Europe and the World.  If you want proof of this…take a look at odesk.com or guru.com.  Eastern European software developers outnumber just about any other global region (with respect to open source technologies).

In summary, its the perfect storm of demand, culture, and supply.  This European tempest will rage for quite some time…and frankly, I’m happy about it.  There are some lessons learned that I’m sure we can apply here in the new country!

NOTE: Ok…so, so what…what have I learned that we can apply here in the US?   I’m going to crack this code somehow – the elements related to government don’t seem to be that different than today’s US.  There’s an opportunity there I’m sure.

Industry, Insight & Thoughts, Software & Technology compiere, europe, Geoffrey Mobisson, levementum, magento, mindtouch, mobisson, open-source, optaros, oss, oss strategy, pentaho, smile, sugarcrm

OK – normally I don’t write blogs bashing companies when I have a bad experience, mainly because I don’t have that much time available.   But I had an experience last weekend at a local Target store that can serve as a great lesson on customer service.  So I decided to share it.

The Background

My 12 year old son recently received a Target gift card from a friend for his birthday.   He also received a new Xbox 360 from his parents for his birthday.   Last weekend he decided that he wanted to spend his gift card on the game “HALO 3″, so I took him over to Target to pick it up.

While at Target, we noticed two HALO games in the display case.   One was HALO 3, the other was HALO WARS.   Not being able to tell the difference between the games we asked the Target employee who was working at the Electronics counter about the difference between the two.   We were told that HALO WARS was the ‘newest version’ of the popular game.   What he didn’t tell us was that HALO WARS is a totally different STYLE of game and isn’t anything like the HALO 3 game my son originally wanted.

An hour later, after opening and realizing the difference, we returned to Target to exchange the HALO WARS game for the other version.   That’s where the fun begins.

Make Sure Your Sales Team Knows the Product

Back at the Target store when attempting to return the game we purchased, I was told it couldn’t be exchanged because we had opened the box.   The fact that I had purchased it only an hour before – didn’t matter.   The fact that the sales rep had told me it was the same type of game – didn’t matter.   When I challenged the sales rep to be accountable for the fact that he didn’t warn me it was not the same style of game he simply said – “I don’t know the differences in all the games”.

Don’t you work in the department?  Isn’t it your job to answer customer questions about the products?  If you don’t know, shouldn’t you have asked?

A Blown Chance to Remedy the Situation and Save A Customer

My family spends about $2000/year at this local Target.    Frankly, I’ve always been pretty satisfied with the store.   The service isn’t always great, but the stores are clean, the quality is pretty good, and I can usually find what I’m after quickly.    But since I spend a good bit of money at this store, I’m miffed that the staff isn’t taking responsibility for sticking me with a $40 game and wasting my son’s birthday present.

I decide the best strategy is to speak with the GM of the store.  Surely she will care enough about my business to resolve the conflict.   I understand the software piracy issues and implications – but there are always amicable solutions to any customer problem if you are creative.   Or at least I thought there were…..

After explaining the situation to the GM, and validating it with the employee (who was defensive, but honest about the sequence of events) I was told that “Target’s policy is that no games can be returned once opened.   Even though the employee should have been more informed of the products, there was nothing they she could do”.  Flabbergasted,  I pushed back.   Surely they didn’t want to loose a customer who spends $2K/year over a $40 game because of a ‘policy’.   Surely there is a creative solution.   I can understand the dilemma over the copyright issue so I offered other alternatives:

- Give me the other game and eat it as a loss

- Give me a gift certificate for the lost amount and I’ll buy the correct game

- Give me a coupon for $40 off my next purchase of $200 or more

- Give me $40 worth of underwear or t-shirts

- Donate something to my son’s school

Anything to make me whole and to demonstrate that Target takes accountability for the fact that it’s sales reps should know the products they are selling.

Crickets could be heard…..

I took my worthless, but brand new game down to the local ‘Game Stop’ specialty store.   They gave me trade in credit for it against a new game and, geeks that they are, were appalled that the Target sales rep didn’t know the difference between the two games.   They felt bad enough that they actually gave me an additional discount off of the replacement game!

The next day I found the local Walmart and my family hasn’t been back to Target.   We won’t go back for at least a year.

The Lessons

There are a few good lessons for all of us from this situation.

1) As a consumer buy from people who clearly know the products well.  I won’t be buying games from anyone other than a Game Stop store from this point forward

2) Make sure that your sales people know the products they are selling.    When they make mistakes, teach them to be accountable.    Target could have won me for life if either the sales rep or GM had just been accountable for the situation.   Instead, they lost my business.

3) Be creative.   Sometimes you can’t give the customer exactly what they initially want in a conflict situation.  But it’s important to be creative and find a way protect the relationship.  Good companies teach and encourage their leaders to find mutually beneficial solutions to problems.   The inflexible application of Target’s ‘company policy’ by the GM not only lost my business, but compelled me to create negative PR.

Oh, and I almost forgot -Halo 3 is a fun game to play.    Thanks Game Stop,  we’ll be back to buy more from you in the near future.

Business & Politics, Insight & Thoughts, Uncategorized Add new tag, customer service

As we trudge through the weak economy looking for ways to attract new clients and grow our business, the old Marketing 101 adage comes to mind:

“Your best new customers are the customers you already have”

At Levementum, we’re finding that this rings true in an amazing way.

With our SugarCRM, Compiere, and Magento Open Source service offerings, we’re finding that the hit rate (on new Open Source apps) for customers that previously have implemented one of these outstanding products, is well over 50%…an amazing rate of Opportunity conversion.

Why is that?  I think its a reflection of how these clients have crossed their own chasms relative to the key “Objections” raised in the course of a Commercial Open Source sale.

When we talk to a new customer – one that has never implemented an Open Source product at an enterprise level, the four concerns we tend to see are:

1. Concerns about the Project/Company viability.

2. Concerns about support and SLA.

3. Concerns about Intellectual Property rights of derivative works.

4. Concerns about quality and features.

Clearly these objections are colored in the spirit of Open Source as a “new” and “disruptive” force, and customers have to be carefully navigated through these discussions.

The key  is, once the bridge has been crossed with one application project, the propensity to steamroll through these objections on the following application project is very high.

We’re finding that SugarCRM customers love Compiere…Compiere customers love what SugarCRM has to offer, and we’re also seeing an interest in Magento from customers of both SugarCRM and Compiere.  Again I propose its because they’ve already taken the Open Source plunge – and already subscribe to the unparallelled value proposition that they can take advantage of:

1. Control of Your Own Destiny.

2. Cost Benefit and TCO.

3. The Quality factor (as a strength)

We’re hoping to continue to see more and more progress – its a bet Levementum has made in spades – and why we continue on our path to being at the forefront of service firms that help Enterprises make sense of how to deploy broad Open Source solutions as an enabler for their own value propositions.

We’re in exciting times in the world of Open Source…The strength of the community has been, well, the community!  I see the opportunity for the SugarCRMs, Compieres and Magentos of the world to cross pollinate – share customers – share ideas – define boundaries – maximize opportunity value.  Its a win win for everybody, mostly for our customers .

Insight & Thoughts, Software & Technology compiere, crm, ecommerce, erp, levementum, magento, open-source, pentaho, sugarcrm, talend, varien

Yesterday SugarCRM announced new pricing for it’s flagship products SugarCRM Professional and Enterprise, as well as simplified pricing and a brand new entry level product SugarCRM Express.    By eliminating price differences for on-demand and on-premise versions, while lowering the price to $360/user/year for PRO and $600/user/year for Enterprise, Sugar also signaled it’s strong desire to be the leading “Open Cloud” application provider.   The lower prices gives SugarCRM customers more value at a lower cost – just when they need it most – in the middle of the worst economy in 80 years.

The CRM Guru, Paul Greenberg agrees – check out his ZDNet blog from yesterday.

The changes also make great sense for SugarCRM as well as the general partner community for two reasons.

First is the release of Sugar Express, which allows Sugar, for the first time, to obtain a revenue stream for those who only need the functionality of the open source (Sugar CE) version, are not ready to pursue the higher Professional versions, but still want a reliable support program. They are basically taking on the non-sanctioned companies out there who aren’t in the partner program, who are hosting/selling CE hosting services and generating revenue without contributing to the community. This is a good thing to protect the brand – to many customers who think Sugar is a bad product because they choose a ‘fly by night’, non-sanctioned company who was hosting CE and not doing it very well.

Second, by standardizing on one price for each version (instead of a lower price for on-premise vs. on-demand) Sugar will actually increase it’s total revenue dramatically and get better leverage from their open cloud environment.  It’s no secret that the majority of Sugar implementations are on-premise. By standardizing the pricing, giving all customers an on-demand environment (while still allowing them to go on-premise if they like which is a KEY DIFFERENCE from other SaaS vendors) they will a) generate more net revenue by capturing more hosting service revenue b) ensure a better experience for customers and c) get better cost leverage out of their hosting environment.

Sugar is also working hard to enable the partners to more effectively implement and configure the Pro and Enterprise applications in their cloud environment with the Cloud Console (rebranded version of Data Center Edition).

Some partners with hosting services will complain that Sugar is taking hosting revenue away.   That may be true if all the parter was doing was loading Sugar on a box.   But there is clear room for value added hosting services in Private Clouds, especially where the customer wants to retain complete control at the root and database level or even better, host mutliple open source applications, connected together, in the cloud.   Levementum uses private clouds on Amazon EC2 to allow customers to manage BOTH Compiere and SugarCRM applications that are integrated as one solution.

Sugar is still on the track as the first Open Source business application to go IPO.   It’s fun to be along for the ride.

Insight & Thoughts cloud-computing, compiere, levementum, open-source, sugarcrm

The VAR Guy recently introduced an upcoming webinar entitled, Can You Profit From Google Apps And Amazon’s Cloud?

“Instead of discovering the risks (and rewards) on your own, learn from three VARs who already profit from Google Apps and the Amazon Elastic Compute Cloud (EC2)…

This is a rare opportunity to hear from three VARs describing their own business success and challenges with the Google Apps Reseller program and Amazon Web Services. Forget the industry hype. Get the real story from three solutions providers that are working in the cloud today.”  THE VARGUY

Levementum’s Geoff Mobisson is a part of the panel and will be sharing how Levementum deploys open source CRM and ERP applications in the Amazon Elastic Compute Cloud (EC2) for their customers.

if you are interested in the growing trend of cloud computing and its influence and opportunities for open source software REGISTER NOW for this insightful webinar scheduled for April 15th, 2009

Industry, Insight & Thoughts cloud-computing, open-source