Making an open-source living, part 1

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Noels summed up what he felt his clients really wanted: "That's something our customers are adamant about: if they ask a question, they want serious answers. You don't sell them a licence; you sell them your experience."

Noels has also found that this approach is a great way to generate repeat business. "It leads to serious stickiness in business relations. It's very challenging, because you have to be sharp -- there's no safety net. You can't say 'this isn't working, but it's Microsoft's fault'. We tend to be very selective in the jobs we take on. We say 'we only work in Apache Cocoon, don't ask us about Struts.' The difference is that we haven't been participating in the design, discussions and community around Struts, so we can't provide the same level of quality as we can with Cocoon."

Being able to provide the level of support that customers were asking for meant that Outerthought had to specialise in a very specific area, the Apache Cocoon framework. Noels says this wasn't an obvious move at first: "That's something we learned ourselves, the hard way. In the beginning, we said 'we do Java and XML,' then we said 'we do open-source Java and XML.' If we said we did Java and XML, people came to use with questions about the Java API for Oracle, which we didn't know anything about. So we said 'no, we do open-source Java,' then people said 'are you doing MySQL?', and we said no, since that's C and C++, and we don't know anything about that. So then people said 'oh, you do Struts and Cocoon and Tapestry,' and we said 'no, we only do Cocoon.' We made that decision two years ago; to really focus on Cocoon, and now 50 or 60 per cent of our turnover is based on Cocoon. But it took us some time to realise that we had to focus and be very specific about it."

It has been suggested that specialising so much may actually result in the company losing business. So, one might ask, what happens when a customer wants more than just that specialised area? "When a client comes along, he's interested in us but he might have a different technological vision. We try to convince them that he shouldn't focus on the framework he wants -- let us help decide on the framework used. In the end, experience with a particular framework is much more important than having the choice of framework."

Noels goes on to say that they're happy to work with third parties who provide some skills that Outerthought isn't able to provide: "Since we're specialised we don't do everything. For Outerthought itself that means we have been involved with a few other companies which have particular expertise in related areas, or they have similar expertise but operate in a different geographical area, so we don't feel like competitors. Sometimes these companies are larger, they have some J2EE folk on staff, or people with JBoss knowledge, for instance. In that case we end up doing a normal subcontracting job. Mostly we say let us just do what we're capable of, and we're very keen on working with partners on a project."

Talkback

It is nice and useful to read an open source/free software experience and business model insights from a small software developer, my opinion is this is the segment that really contributes a lot to open source, and this is also the segment that needs revenues most

Many thanks for the article, I plan to include it in a page we run on the topic Making Money from Open Source Software @ eIT.in @ http://www.eit.in/sw/free_software/making_money/making_money_from.html

Rgds from Narsi @ http://www.eit.in

via Facebook 9 July, 2006 17:23
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