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Talking Open Source and Business - TYPO3 GmbH and DRUD

Thanks to Jam from OSP for sharing!

I sat down with TYPO3 GmbH CEO, Mathias Schreiber, and DRUD Technology LLC CEO, Steve Grandchamp to explore the benefits open source software offers customers, end-users, and business people. All three of us are well into our second decade of involvement with open source software and products. I was keen to hear more about the hands-on experience and extensive knowledge of open source and business that they bring to the table. This post is a recap of some of the highlights of that conversation. Watch the full video below.

Why open source software is better

As an opener, we talked about our thoughts and experiences in the open source space from the perspective of a business person, rather than from the usual technology perspective.

I asked Steve Grandchamp when he first heard about open source. “2004. I was approached to run a company and the open source space and I thought, ‘open source? Well how serious could it be, right? It's FREE.’ I'm thinking OK, how are you going to build a business if it's free? And I thought, ‘Yeah I've heard of it but …’ Until you dig in and realize, literally, that anybody doing any serious innovation in software development; it's rooted in open source. But my initial approach was or reaction was, ‘You can't be serious. It cannot be that big of a deal, because it's free …’”

Mathias’s background is in sales. “I started selling stuff in the music industry. Growing up, my dad had an advertising agency. So selling stuff. That's how I grew up. And I remember I came in touch with open source in 2000. … When I came in touch with TYPO3, which was my first serious open source project back in 2001, my first reaction was also like, ‘How the hell am I going to sell this? Because it's free, right? Everybody can just download it.’, and I remember my dad telling me like, ‘Your intellectual property, that's the value,’ and I was like, giving it away publicly …”

As Mathias was drawn into the TYPO3 community, he soon realized the importance of collaboration in software development. He says that collaboration makes the end result far better because you get more perspective and insight from a lot more perspectives. You don’t become stuck in your own silo and develop tunnel vision.

My open source journey began in 2005. I was fascinated by the community dynamic that brings together people of diverse backgrounds, cultures and education disciplines to create and share technologies to help anyone who wanted to use them.

Open source and sales - solving problems better and faster

Steve pointed out that a key concept in open source is collaboration and defined “sales” as solving somebody’s problem. “What does collaboration do and what does open source do? What does it excel at in a project?,” referring to open source, “Solving problems, right? Lots of different inputs, lots of different perspectives competing ... Great ideas, best idea wins. You know sort of that whole dynamic that exists within a healthy open source community so you solve problems faster.”

Open source competitors collaborate for better quality

The open source dynamic is a little crazy if you’re unfamiliar with it. For example, it is commonplace for competing development teams to come together to find the best technical solution for everyone and then take them back home to use to compete with each other.

It is a completely different atmosphere to that of proprietary software, with a different set of priorities. The focus is on generating value and enabling communication to reach a common vision. I find it fascinating how large groups of people cooperate and share ideas for the benefit of all.

“The dynamic is high energy – high competence!“  Steve Grandchamp

Video: Steve Grandchamp, Mathias Schreiber, and Jeffrey A. "jam" McGuire talk open source and business

What is the best open source business model

Steve Grandchamp’s most recent challenge is to put venture capital to work building and putting together a bunch of open source technologies at DRUD Technology LLC. He talks about translating the vibrancy and activity of open source communities into value: “There are many different kinds of business models that work in the open source space. It doesn’t have to be just one business model,” You need to know your customers, “because the monetization piece, the business model, the value that you generate for a customer is rooted in the problems and the needs of that customer and you have to understand that because there are different ways you can do that.”

“And then as your customer transitions from the open source project that you are building ... All this community activity, all of this great input, that has to transition into a product that makes sense and generates value to the customer and that product is built off of the project. In fact, the projects build much greater products than a proprietary software team could build because of all the vibrancy of the community.”

There are many ways to build products and services around open source. The most common one is support contracts; enterprise customers require ongoing support. Consulting and training, integrations with other systems, and a variety of other things generate value for customers.

But beware, an unsupported project will die and leave your business high and dry. The best open source business models also include some concept of contribution and support for the software and the communities that built it in the first place. Software ecosystems that get this balance right can thrive.

Why the popularity of open source software continues to grow

Proprietary software vendors did us a great service in releasing crappy software and coming up with more security incidents that you can wish for.” - Mathias Schreiber

Unsatisfactory proprietary software went a long way to helping customers understand that open source software is, by its very nature, better. The next hurdle was to outweigh other  possible issues customers may have with open source.

“Customers want a phone number to call.” - Mathias Schreiber

While this seems like a simple thing, but it gets tricky in a community. Answers to questions like who will answer the phone, and when and why they should, are not always clear-cut.  Having a service company that can take on these responsibilities adds professionalism and commercial credibility to open source projects.

TYPO3 GmbH, supporting the TYPO3 CMS project

TYPO3 GmbH is the commercial arm of the TYPO3 content management system (CMS) project. It was founded by the TYPO3 Association and the TYPO3 community to act in its interest. While the company finances and manages much of the development and maintenance of the project, TYPO3 CMS is licensed under the General Public License (GPL) and remains legally separate from the commercial entity.

The project remains open source, freely available, modifiable, and distributable, but with one big advantage: The TYPO3 CMS contributor agreement assigns rights to the Association that it has entrusted to the GmbH making it the official project vendor. The company can pitch for new business in situations that require a vendor service level agreement (SLA), something that few open source CMSs have. In western Europe, for example, many public tenders are only open to software backed by vendors. Large enterprises demand to deal directly with the vendor, and will not enter into negotiations with individual agencies.

“Nobody asks consultancy X to implement Office 365 on a municipality level. They only talk to either IBM or Microsoft ….” Mathias Schreiber 

“Give us your shameless pitch!”

When given the opportunity to make a final “shameless pitch”, here’s what we all had to say:

Mathias Schreiber for TYPO3 GmbH: “We are providing service solutions with TYPO3 CMS that you cannot get anywhere on the market because we are the independent entity. We have no interest in getting your clients: we want to get the best for TYPO3. If your project runs well that is the best for TYPO3 because you, as the customer, are happy. We extend support for TYPO3 if the official support runs out - you can buy that from us. You can do project reviews and extension reviews. If you are not sure that the TYPO3 project is built in a proper way and want an independent opinion on that, we can do that.”

Steve Grandchamp for DRUD Technologies and the DDEV platform: “You do not want to be locked into a vendor. You are building complex websites in a very complex world. The open source roots and fundamentals allow us as a company to create an environment where you have the freedom to pick any tools on the frontend that you need to build this – and to take any technology on the backend where you need to deploy it. You can rely on us to remove the complexity and make it work – and make it work well. We’re using open source and the communities as a way to innovate, absolutely as fast as we can, to help drive your success.”

Jeffrey A. "jam" McGuire, wrapping it up for both: “Try this really interesting CMS TYPO3, if you haven’t tried it. They do multisite, multilingual and there is a ton of fascinating things going on. You can do that quickly and easily by using a tool called DDEV-Local which supports TYPO3 CMS, and lets you get up and running to check it out.”


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