Microsoft buys and sells its version of the "facts" on Sharepoint, OOXML
Wow. I guess when you have more cash than taste you can afford to buy research reports that say all sorts of nice things about you. Open-source companies have to rely on things like products that please customers; Microsoft can afford to ramrod research down customers' throats.
A great example, as Mary Jo notes on ZDNet, is two new Microsoft-commissioned research reports that (gasp!) find Microsoft Sharepoint is a better investment for systems integrators and that "Office Open XML (is) the format showing the most progressive adoption rates in the marketplace over the next 12 months."
The research is of dubious value given that it's bought and paid for, but what is fascinating is the target of the research: open source.
Think about it. 99 percent of the current Enterprise Content Management/collaboration market belongs to proprietary vendors, yet Microsoft bothered to put together a report showing how it compares against...less than 1% of the market? Does it have a complex or what? It must feel that the future belongs to open-source collaboration/content management systems. I'm glad we agree on one thing.
Because we certainly don't agree on the numbers Microsoft bought. Let's take the Sharepoint example first, because that's the one I know most about. Mary Jo reports:
Microsoft SharePoint engagements to appeal to larger companies, according to IPED. Average project size is $5,000 to $15,000 for an open-source collaboration engagement, compared to $45,000 to $150,000 for SharePoint ones. Hourly billing rates: $90 per hour, on average, for open-source partners, compared to $150 per hour for SharePoint ones.
This is completely false. It's not just a little bit false. It's 100% false. It may be true of non-commercial open-source collaboration/content management systems, but it's egregiously wrong for any commercial open-source system. Alfresco's partners, for example, average much higher than Sharepoint's engagement numbers: closer to $75,000 to $300,000 per engagement (and often much more). I'd be willing to bet the numbers for Liferay (Portal), Nuxeo (ECM), etc. are not far off that mark.
As for billing rates, Alfresco's partners take in more than $150/hour - higher than Sharepoint's. Again, I'm sure my open-source competitors' partners' rates are much the same.
Yet again, it seems that Microsoft has created its own personal strawman and managed to knock it down (bravo!), though not completely as the report in question cites higher net-income percentages for open-source systems than Sharepoint. Even with its own cash, it can't seem to buy a truth most pleasing to it.
It's good marketing to paint your competition in the worst possible light, but it's not very helpful to customers, which is what Microsoft insisted was its purpose in upgrading its 'Get the Facts' site. I guess old habits die hard.
Full disclosure: My company, Alfresco, offers an open-source alternative to Microsoft Sharepoint.
Matt Asay brings a decade of in-the-trenches open-source business and legal experience to The Open Road, with an emphasis on emerging open-source business strategies and opportunities. Matt is vice president of business development at Alfresco, a company that develops open-source software for content management. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure. You can follow Matt on Twitter @mjasay. 
Thanks for the quote. I (Nuxeo) can confirm that our partners record
engagements around $100k-$200k for average projects (complete DM and
collaboration systems) and $800k-$1,2M for the largest ones (global ECM
systems, highly specialized business app, global ECM platform, etc.). And
those are still very competitive compared to our traditional largest
proprietary competitors (in which I do not include Sharepoint :-) ).
Cheers,
EB.
The sizes of deals are interesting to me.
The quote (and the read) from the analysis is one dimensional and nearly meaningless.
Matt however brings context by comparing real ECM to real ECM projects and states that the dollars spent compare. Okay then what?
I have an expectation that the cost of an open source "deal" is going to cost less than a proprietary installation. Open source is a systemic improvement on the software business in almost all areas and one obvious benefactor (there are many others) is the customer's wallet.
What this means to me is that if I am going to spend equivalent sums of money on OSS (to what I would spend in for a proprietary solution), I expect to get more. More transparency. More ? much more customer contact, More Service. More Quality. More innovation.
Greed isn?t the motive. Reality is.
Hands down open source [practiced] is a better way. I try (I need to try harder) every day to get my organization to see and practice this. We are not a software company but open source isn't about code and its principles apply to us and most other businesses. I have the same expectations of "More" from my company. I want More for my customers - which leads to More customers who are More satisfied and who come back More often.
Open source [practiced] has real, tangible systemic benefits. It's a system that has properties which support growth in a healthy, sustainable way which is simply not present in the ?old world.? Business in open source is about healthy sustainable customers.
If you are in business and you are not trying as hard as you can to understand open source and what it has done to better the entire customer-industry dynamic and health of the software ecosystem you are not going to be in business for long.
The sizes of the deals may compare but the value should not.