Press: Open source as a business model

Published 2008-06-17 in Press by jondrusek

hnonline_and_zive_logo
hnonline_and_zive_logo
The following interview with Filip Hanker has been published in a national newspaper in Slovakia – Hospodárske Noviny, as well as the largest Slovak and Czech IT portal ZIVE. Comsultia is the only company in Slovakia with a business model based on its own open-sourced software – a content management system called Cyclone3. We bring you the English translation.

Two years ago, Comsultia ltd. opened the source code of its content publishing system and made it accessible for free. Roman Fordinál, the managing director, claims that it has been good for the business.

These are the links to the Slovak version at HNOnline.sk and Zive.sk.

Why have you picked an open-source and free model?

Since the beginning we have extensively used open-source applications in our business. Control over functionality and ability to make changes were the main reasons. We have benefited from these, particularly in crisis situations. That was a much stronger argument than price, especially in a company developing applications. The feedback from the community of developers and the speed of bug reports has convinced us even more.

Considering our own open-source development was a natural next step. In the beginning we were a little worried about our clients. Would they accept the change? The attitude towards software is still traditional to a large extent – people expect “a box”. However, we managed to bring not only new benefits to our clients, but also an extending commercial product and a wider package of services.

Our view of a publishing system is that it is more a tool to reach particular goals. The customer is interested in the final effect: Does the web application work properly? Is it reliable? What about additional supplemental services?

Was it difficult to open your source-code? Did you have to re-write some sections that had been far from perfect so that you would not need to be ashamed before the community?

We dedicated a lot thinking to these issues. Whether the new system was ready to be published or to what extent we would release it. In the end we released source code for most of the framework and several basic applications. We only kept parts with the real value for the customers in the commercial product. We certainly did not re-write anything just because of the potential critique from the community, we rather sped up changes we had prepared for some time anyway. We consider the community a valuable source of feedback.

What are the advantages of an open-source solution from the customer perspective?

Mainly price and the assurance that the customer is only paying for something particularly tailored to his or her needs and tangible services. The ability to avoid vendor lock-in is another advantage. The client can make changes to the software and is not bound the original supplier, not even after closing the contract.

Continuous development of the open-source solution and improved quality feedback from a large group of users is another significant and not so well-known advantage. The customer thus keeps receiving an up-to-date application with new and better tools. This way of software development can be compared to accounting software. It also has to be developed continuously because of policy changes.

What about the employees?

This way the potential employees already know what the product, they are supposed to work with, is all about. This prevents later dissatisfaction to a large extent. Outsourcing flexibility is another advantage. We can search for our programmers all over the world using the web and various code development competitions.

How does the community of open-source users help? For example, have they contributed a valuable piece of code?

Currently we are more aimed at benefits towards our clients, not community activities. We get great feedback anyway. The community has produced for example translations to German, a Russian version is being written, possibly a French one. We are trying to have Chinese as well.

Does the community bring better security too?

We actively communicate with independent Internet and application security professionals. It is easier to have an open-source product audited or assessed independently rather than having to manage access to protected source code fearing for your intellectual property. Several minor problems have been discovered this way.

Did opening the code contribute to the quality of the system?

Openness of the code makes the programmer feel being watched. Thus it prevents temporary and non-systematic solutions. So during code development a programmer thinks twice before writing anything.

If the system was closed and only accessible for a fee wouldn't it result in greater profits? Wouldn't the profits outweigh the loss of benefits such as feedback or translations?

Our turnover has increased after going open-source because the attractiveness of our product has increased as well. Furthermore we also have a commercial version of the product with a paid license. Anyway the customer still saves a lot compared to completely proprietary solutions and is more eager to pay for additional services or extensions. The customer is motivated by ordering services that he or she really needs.

But you would still make more money from the customer if the solution was proprietary

In the case of a single customer - yes, but we would have fewer customers. And I am talking about real numbers we had before opening the code.

So do you only make customer pay for the additional solutions?

Yes, the software was built as “business ready”. It is possible to attach any applications to it or even modify the base functionality without risking license violation. This makes the commercial version of the product. For example libraries for DDoS attack monitoring, automatized SEO, specialized outputs and applications. We have implemented a fully working connection to the Spin ERP system from the Datalock company. These are the services our clients pay for and are interested in.

Do you keep developing the basic module?

After some time we release several applications as open-source. Recently, for example, we have released a library for watching statistical information and producing graphs. Applications that no longer pose a great benefit for the customer – e.g. because there is a new version already – and can improve the attractiveness of the software are released to the basic module.

What if the customer proposes a functionality that would benefit the open-source version or other customers?

If we see that the wish of one customer can be used for other customers as well we offer a discount price. In some cases we develop it entirely for free if we are convinced it would increase the attractiveness of the whole software. It is mutually beneficial. Not only for the customer because of the reduced price and the guarantee of further development but also for us, because we can offer it further. If the customer asks for an application or an extension so specific, that no one else would make use of it, we ask the standard price.

Take, for example, an e-shop solution. A product catalog and its administration is a generic part of the software. Programming a connection to an ERP or another information system, business processes, bank communication are all paid additions.

How many of your customers administrate their software themselves?

Currently two, there will be one more in short time. This service is used by larger customers who welcome the possibility of administration using their own sources without any license regulations. It is only about something over 1% of carried out projects.

Do you provide detailed documentation for the open-source product?

Until now we have considered the documentation as our know-how. There is a basic installation manual and libraries and modules documentation. So far we have not provided detailed complete tutorials, for example, how to build your own application. But the aim of spreading the software within the community we are currently working on that too.

What are the advantages of competitive publication systems compared to yours?

Larger community working on the projects can be considered an advantage. As a result a greater number of add-ons and modules is available, even though the most valuable applications are usually developed internally and are not open-source. As for open-source software, we consider TYPO3 and Plone, which enables solving of greater tasks, a strong competition.

Compared to conventional open-source CMSs though, our administration system is different. It has been programmed as a RIA (Rich Internet Application). The user interface is not a standard web page but rather a classical application for greater user convenience. The framework is deployed also on larger server farms.

We strongly promote open standards such as OpenDocument – an ISO norm, SVG, DocBook – a semantic format and we make less compromise concerning new standards and application complexity. There is also primary orientation towards commercial use of all applications.

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