Yes, you can make lots of money with open-source software. Alfresco, a leading enterprise content management and collaboration vendor, just announced its 2007 financial results. The numbers speak for themselves:
- Surpassed the one million software download mark;
- Grew community membership to in excess of 45,000 members;
- Grew customer bookings by over 320 percent year-on-year with more than 400 enterprise accounts [including Activision, Electronics Arts, Boise Cascade, and Sony Pictures, as well as five of the top 10 investment banks world-wide and major government organizations globally];
- Announced significant OEM partnerships - including a major deal with publishing giant Quark;
- Exceeded 30,000 active deployments of Alfresco worldwide.
There's apparently gold in them there open-source hills. Lots of it.
As an employee of Alfresco, let me add some more local color to the numbers, which provide a glimpse into the power of open source as a distribution model (putting to one side its power as a development model for just a minute):
- We routinely close six-figure deals with a relatively junior "inside sales" team...in 90 to 120 days (start to finish - that's the sales cycle). The software sells itself, to a degree;
- We almost never get on a plane to nurture or close a deal. Everything is done over email, phone, and Adobe's Acrobat Connect. It costs us little to acquire companies.
- Our renewal rate approaches 100 percent. I suspect this will go down over time (natural forces, strength of the product requiring less support, etc.), but we're adding value to this with our Network product (similar to JBoss Operations Network and MySQL Network and Advisory Service);
- We still do most things wrong. :-)
On this last point, I simply mean that we don't do everything right. Internally, we're hyper-critical and tend to see all the things we're doing wrong. The point is that an open-source model doesn't require perfection to be profitable. It just requires drive and execution. Zimbra seems to me to have done everything just about perfectly, but I doubt they felt that way. JBoss and MySQL? Same thing.
It's great that Alfresco is doing well, but my point in posting this is to insist that open source offers an exceptional way for all software vendors to make money without sacrificing the well-being of their customers along the way. It is, quite simply, a better way to develop and distribute software.
Frankly, even Microsoft could use this model - as Marc Fleury pointed out to me earlier this week - without skipping a beat. It could adopt Red Hat's model tomorrow without sacrificing its billions in profit. If anything, it should grow with a model that focuses on widespread, cheap distribution.
Something to consider.
Disclosure: In case you missed it above, yes, I do work for Alfresco. Now you see why.