Eating dinner with Larry Augustin in London this weekend, we fell to talking about open source's relevance to the SMB (small- and medium-sized business) market. Augustin is currently CEO of SugarCRM, a company with over 5,000 customers, many of them SMBs.
But SugarCRM is the exception to the rule. Open source has long been billed as a savior for the SMB market, but the reality is that open-source adoption has largely been an enterprise IT phenomenon, despite other exceptions like KnowledgeTree, which recently updated its product suite to further appeal to this market.
Why aren't more SMBs adopting open source? Following recent Forrester data, Savio Rodrigues of IBM points out that many SMBs still cling to the perception that open source is not secure and is overly complex.
In many cases, it's not perception. While it's tough to generalize about open source at this point in its history, it's absolutely the case that some open source is complex, some open source is not secure, etc. Much open-source software mimics the enterprise software world it strives to leave behind.
Dell is trying to overcome these concerns by selling prepackaged open-source applications, and I would assume we'll see more companies following Dell's lead.
While some big vendors like Cisco already have significant SMB focus, others, like Oracle, SAP, etc., could use an open-source runway to the SMB market. Unfortunately, as noted, open-source vendors haven't necessarily penetrated the SMB market any better than the proprietary vendors have.
This suggests a strategy for open-source vendors, one that could lead to a big exit: figure out how to pitch to the SMB market, then sell to those big, proprietary vendors that need an entree to SMBs. The new hybrid model for open-source vendors might well be to make the "enterprise" version the one that is easiest to administer and use.
First, however, open-source vendors need to start making software easier to use, and not emulate all the wrong behaviors of the proprietary past. Fortunately, the way to make software easier for SMBs and to monetize it might actually be cloud-based computing.
How fortunate.
Disclosure: I am an advisor to SugarCRM.
Follow me on Twitter @mjasay.
John Roberts on Wednesday resigned from his post as CEO of open-source CRM vendor SugarCRM, leaving board member Larry Augustin to assume the role of interim CEO while the company conducts a formal search for his replacement.
John Roberts
(Credit: SugarCRM)Roberts, whose grounds for leaving the company and future plans remain undisclosed, has made a huge impact on the open-source world, innovating the "Open Core" business model and helping drive open-source applications into the enterprise.
SugarCRM, despite losing Roberts, will be in good hands with Larry Augustin, who, as founder and former CEO of VA Linux, sits on a number of open-source company boards, including Pentaho, Compiere, Appcelerator, and Medsphere. He understands how to run an open-source business and, importantly, what to look for in leadership. Augustin should be able to find a strong CEO to lead SugarCRM.
Augustin's near-term task is clear, as he outlines in his blog announcing the change in leadership:
Yesterday, I stepped into the role of interim CEO at the company. I have an immense amount of respect for the founding CEO, John Roberts...My goals for the next 30 days at SugarCRM are fairly simple: get to know the team, customers, and partners. I am looking forward to helping them to continue to execute and (taking) the company to the next level.
In other words, continue the solid work that Roberts started.
I first met Roberts at an SDForum event in 2004, at which time I thought that he was crazy for believing open source could succeed in applications. He and his SugarCRM team persisted in their Quixotic dream, building SugarCRM into a thriving company that brought in tens of millions of dollars in sales last year and has an eye on an IPO.
I couldn't reach Roberts for comment but hope that he spends a little of his downtime on cycling, one of his passions, before he leaps back into the open-source world. As Augustin notes of Roberts, "Few people have taken a company from concept to major growth the way John did at Sugar."
I agree. Roberts will be missed. Fortunately, his legacy should live on at SugarCRM, one of the pioneers of commercial open source.
Disclosure: I am an adviser to SugarCRM.
Follow me on Twitter @mjasay.
eWeek has put together a solid list of the top-15 open-source business influencers in the industry today. It's much the same that I would have devised had I come up with such a list. Names like Linus Torvalds (Linux), Mitchell Baker (Mozilla), Mike Milinkovich (Eclipse), and Larry Augustin (most startups known to humankind) make the list. Also John Roberts of SugarCRM, who was really the one who made commercial open source as big a topic as it is today, at least beyond Linux and middleware.
But the list is also notable for its inclusion of some people that might normally escape public notice, but who deserve it all the same. Tim Golden (Bank of America) is one such person. Another is Peter Fenton (Benchmark Capital). Few recognize just how deeply involved Peter is in the open-source venture market.
Others on the list, like Mark Shuttleworth, are well-known but not yet for the right reasons. Mark is known more for his engineering side (Ubuntu), but I think his most lasting impact will be with the uncompromising business principles that he brings to Canonical.
At any rate, good people getting the credit they're due.
Greta and Lily Asay
Whom shall he teach knowledge? and whom shall he make to understand doctrine? them that are weaned from the milk, and drawn from the breasts.
For precept must be upon precept, precept upon precept; line upon line, line upon line; here a little, and there a little:
For with stammering lips and another tongue will he speak to this people. (Isaiah 28:9-11)
Anyone that has tried to ramrod open source into an organization will appreciate this counsel from Isaiah. As a market phenomenon, open source - be it Linux, Apache, MySQL, SugarCRM, MuleSource, or another project - almost always has begun on the fringes of IT. With Linux it was the edge-of-the-network server at first, until it eventually claimed the data center. With many commercial open-source projects, the first entree into an enterprise is at the departmental level (and even before that, with the individual developer's desktop).
Milk before meat. Here a little and there a little. Start small (as with my two youngest daughters to the right) and grow into greatness. Getting there depends on patience, as Marten Mickos and Larry Augustin have individually written:
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