Last week I suggested that open source still has work to do to penetrate the SMB (small to medium-sized business) market. Immediately various open-source companies started contacting me, either corroborating my contention or contradicting it.
Untangle is in the latter camp.
Untangle's active deployments skyrocket with open source
Untangle CEO Bob Walters talked with me in 2008 and indicated the company's switch to open source had paid serious dividends. As I learned in this follow-up email, the momentum has accelerated, as shown in the graph at right, and it's apparently all coming from the hard-to-reach SMB market.
Untangle sells software that allows small businesses to securely connect their local networks (LAN's) to the Internet. In other words, Untangle is a "secure network gateway" company, as Bob describes it. The company has now open sourced roughly 90 percent of its code, which is given away free of cost, and then charges for advanced features, similar to the business models used by SugarCRM, Zimbra, and others.
That move to open source has proved beneficial, as can be seen in how deployments have soared since Untangle open sourced its code. But I still wanted to know how Untangle successfully reaches the SMB market, particularly in light of the fact that Untangle doesn't build appliances which might make the software easier to adopt than a download-and-install-it-yourself model.
Open source has helped turn Untangle's customers into a self-reinforcing community:
Nothing sells like free during a recession. And those 18,000 active Untangle sites become both spokespeople for and prospective customers of ours. It's then our job to put highly-useful complementary commercial products in front of them.
Well over 99 percent of our customers have fewer than 100 employees. These include accounting firms, professional services firms, retail franchises, and small government agencies/offices. We are also popular for schools, especially private middle and high schools. (These can sometimes exceed the 100-user mark.)
Fine, but how do you reach such a scattered, tight-fisted market?
... Read moreI've been saying for some time that open source is not a price tag, or at least is much more than that. In criticizing Oracle's "lite"/express approach to competing with MySQL years ago, I insisted that "free, as in price, is just one part of the open source puzzle. But it's not necessarily the most important one."
I stand by that claim, and received confirmation from Untangle this week.
Untangle is an open-source network gateway company. It started out as a proprietary software company, but turned to open source for growth. This doesn't always work well for companies, largely because many get the model and/or culture wrong.
Untangle, however, has done it right, and the downloads have followed. From 145 in June of 2007 to 41,419 in April of 2008, interest in Untangle has rocketed with its adoption of open-source licensing.
Is this just because its code is free now, and not because it's open source? A quick look at the data suggests that "free" isn't selling Untangle. Open source is.
... Read more
Matthew Aslett is highlighting four open source startups to watch: Aptar, GravityZoo, Loopfuse, and Untangle. I've talked about Loopfuse and Untangle before, but Aptar and GravityZoo are news to me.
That's one of the great things about the commercial open source ecosystem right now. People can complain that there aren't enough (public) examples of success yet, but one of the great examples of general commercial open source success is that there are so many new companies getting funded and/or getting traction. This is a vibrant, growing ecosystem.
Growing in breadth, but also growing in depth. ... Read more
Most of the CEOs profiled run commercial open source ventures that have always been open source (or had a strong open source component to them). In this seventeeth installment of the Open Source CEO Series, I caught up with Bob Walters, CEO of Untangle, a recent convert to an open source business model (though Bob, himself, has been involved with open source before while at Linuxcare). I wanted to find out lessons learned by Bob (and Untangle) on the shift to open source, and was not disappointed....
Name, position, and company of executive
... Read more
Bob Walters, President and CEO, Untangle, which delivers on-demand software to small businesses.
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