C R M I T - Solutions On Demand

Posted by Sinclair Schuller Blog Track back

Many things in life tend to be mutually exclusive: you can’t drive a car and fly an airplane at the same time (not yet), you can’t be underwater and breathe (at least not without an apparatus) and you most certainly can’t talk and listen at the same time (believe me, I’ve been trying to perfect this for the longest time). Many will have you believe that Open Source and SaaS as a pair of business/distribution models also fall into this category. A simple Google search unearths a bevy of “Open Source vs. SaaS” information.  One thing is certain from my perspective: SaaS and Open Source are most certainly not mutually exclusive.

When looking at software business/distribution models I see a few important questions that need to be answered in order to understand the “source to market” relationship as well as the potential for exploiting different ways to generate revenue:

1. Who Built the Software?
2. Who Added Value to the Software?
3. How is the Software Distributed?
4. Who Wants the Software?

Understanding the choices for each of those questions can highlight what possible paths can be taken. Visually, these questions and potential answers can be captured as follows:

Based on this “source to market” stack, I find it very easy to treat the Open Source Community as one of the many implementation mechanisms for software, irrespective of how the software is distributed or who wants it.  I’m satisfied by the notion that how software is implemented has little bearing on how it can (and should) be distributed, hence allowing SaaS (a distribution model) and Open Source (an implementation/licensing model) to co-exist (If there is some insurmountable contention I’m missing, please do leave a comment!). An example (although not the best example) is SugarCRM: a community develops the open source core, SugarCRM adds value through more feature-rich versions, and the software gets distributed both on-premise and on-demand. If we lay a map over the previous diagram for a concept similar to SugarCRM, we arrive at this:

When building a business/distribution model, understanding the abstraction between interacting layers (or acknowledging that they exist) can be powerful. I think there is a lot of work to be done in creating a powerful “Open Source/SaaS Merged Model” (I don’t think Sugar has the best approach yet), but we should by no means use “versus” to describe their relationship. One thing we can all agree on is that many of these concepts are better than this:

Any thoughts or comments? Is a merger between the two not possible, or is it inevitable?

Posted by Sinclair Schuller