Archive for January, 2008

Covalent and SpringSource: here we go again

Gee… commenting Open Source acquisitions is turning into a full time job. I didn't have a chance to dump my thoughts when the SpringSource/Covalent merger hit the news as I was dashing through London like an headless chicken: a lot has been said already, which means I'll be the latecomer to the party and just add a few random notes for my memoirs.

First of all, let me extend my kudos to Mark Brewer and the Covalent crew: this is a very good opportunity to strengthen the Open Source support business model, and SpringSource looks like an excellent partner. I consider Covalent one of the best Open Source companies around, so it's really good to see them moving forward at a faster pace. It's no news I'm not exactly a fan of Rod Johnson's obsession for separation of IP creation and monetization (read: "no one outside of SpringSource is able to support the Spring framework", AKA "I want my cake, and eat it too"): I believe that there is more to Open Source than gating access to committership as a way to defend a business, but I guess that's just me and a bunch of others. As Covalent is bringing some great folks to SpringSource, there might be a good chance for them to bite Rod and friends with the Apache and Open Development bug, so we might end up with a closer bound between Apache and Spring, which is most definitely a Good Thing.

Having said that, I have to note I feel awkward when describing this deal as an acquisition: while the actual details of the transaction are private, we know about the 10M$ upper limit, that is what Rod Johnson milked from his round A from the deep pockets guys. The money changing hands has got to be much less: SpringSource got the funds last May, so it's safe to say most of it should be gone by now. On top of this, an undisclosed amount of shares went the Covalent shareholders' way. 

We have to remember Covalent was privately held, so all in all the deal is not that bad, despite landing at least couple of zeros behind what seems to be the standard nowadays. However, given the minimal amount of money and the potential role of shares, I can't stop wondering why SpringSource and Covalent decided to hit the press with an acquisition news, when the actual description of the deal looks so much more like a merger to me. Petty naming discussions aside, I believe that from a PR standpoint announcing the deal as a merger would have resulted in a much better perception of two leading companies in their respective spaces joining forces to hit the market as a bigger and better endeavor.

Marketing the transaction as an acquisition might strengthen the perception of SpringSource being tall and strong, but this comes at the price of somewhat diluting the value of Covalent which looks like the weak part of the deal, especially when you look at the numbers involved. As I have a passion for Mark and friends, there is a good chance I'm biased: most likely the Covalent folks are still recovering from hangover and are perfectly happy with the deal. Still, I believe the net effect of a  communication along the lines of a merger would have been easier to understand and a stronger proposition altogether. Nevermind this small gripe, I won't pass on any champagne left from the celebration, so here comes my virtual toast to SpringSource and Covalent for getting together and making Open Source a better place!

Proprietary to Open Source: resistance is futile…

you will be assimilated.

So, 150M$ went to fill a few more boots as Nokia acquires Trolltech. Matt is already on the ball, asking  who's going to change the world for the better as the old guys continue their shopping spree, swallowing Open Source companies in a seemingly endless binge.

I'm not that worried. I think this is yet another step toward the much anticipated hybrid model that everyone is expecting. Also, I'll stick to what my ancestor Horace said about Greece being conquered by Romans:

Graecia capta, ferum victorem coepit (Horace, Ep. 2.1)

which would translate to "once Greece had been captured, it captured its wild conqueror", meaning that since the Roman Empire won Greece, the Greeks were able to influence the Roman culture so much that it just looked the other way around. Are we going to see the Open Source culture permeating proprietary companies and changing them from the inside? I guess this is yet another way of considering Open Source as a means to an end. 

The marketing ploy of Open Source

This just in from Matthew Aslett. A true must read if your business has anything to do with Open Source, as it clearly show how Open Source strategies can be a powerful marketing tool. Case in point: a unnamed company switching to an Open Source distribution model, with mind-boggling numbers about their first year of operations (emphasis mine):

In its first year using an open source distribution model the company saw:

  • A 12X increase in ‘awareness’ (web hits, community engagement, media mentions, conference visits etc).
  • A 13X increase in web site visits.
  • A 17X increase in software trials.
  • A 40X increase in qualified leads.
  • An 8X increase in engagements.

[...]

  • The company’s executives estimate that it would have cost in the region of $2m in marketing to get those leads if the company was not open source.

What's not to love? With Open Source being the ultimate marketing WonderBra, it's no surprise that everyone and his dog are dropping stuff on Sourceforge and friends. Numbers are strange beasts, though, and Matthew doesn't fail to recognize how a 40X increase in qualified leads brings to an 8X increase in engagements. Just read the numbers backwards to find the culprit: even assuming that the mean deal size was constant over the year (which in itself can be quite a leap of faith considering how Open Source is typically cheaper), the outcome is lead conversion being 80% worse with Open Source. While the term "qualified lead" would deserve a fair bit of discussion, performance of Open Source seems poor when it comes to what is actually paying the golf membership for the VP of Marketing. 

It looks like an happy problem, actually: any VP of Sales will at least consider trading her daughter for an eight-fold increase in engagements, yet there are at least a couple of issues to consider:

  • sales aren't free. There is a considerable cost associated with closing a deal: phone calls, paperwork, travel, proofs of concept, prototypes and the like. Sales staff isn't cheap, and conversion rate getting 80% worse is a sure way to make costs skyrocket and margins nosedive at the same time.
  • am I the only one seeing a problem with value here? I'm missing a few key figures here, but it seems that open sourcing is a great recipe to have 40X more people interested enough in buying something from you to get in touch and ask questions (that is my reading of "qualified lead", for the record). It seems, though, that a lot of these guys don't quite find what they're looking for, as the conversion rate isn't stellar. In a nutshell, even when you manage to get in touch with a customer in a direct way, there doesn't seem to be enough perceived value to move the conversation to the purchase department. Why is it so?

Having said that, I have a few takeaways from these numbers:

  • tactically speaking, there is a clear need for streamlining the sales cycle. It's not a surprise that Matthew is using those numbers to prove that LoopFuse, a tool to monitor and increase lead conversion, can be a tremendous help in separating the wheat from the chaff and bring those sales costs down.
  • a tool, no matter how nice, is still a tool and there is only this much it can do. Better sales conversion needs a comprehensive approach, working through general and market-specific issues. Such as being close enough to the customer in a global market, which is a big challenge for the average Valley-based Open Source shop: in the enterprise world, telemarketing and phone calls just don't cut it, yet a global sales force is difficult to attain. If you were wondering why Sourcesense has being forging so many partnerships, here is your answer: we hit the road day in day out, making customers and vendors meet. Open Source  is great at marketing, but still needs the channel to shine.
  • we can't sweep the real issue under the rug for much longer: Commercial Open Source needs a solid value proposition. It doesn't take much to convince a user that freebies are a good thing: the difficult bit comes when trying to make customers pay for the very same free lunch. Or (even worse), pay for the whole meal just because they might be like some ketchup on top.

Last but not least, these numbers are great news for those who consider Open Source as a part of a bigger marketing strategy: if all you need is (co)marketing, Open Source can be the ultimate silver bullet. It doesn't really come as a surprise to me, but it's good to see some figures in print.

Open Source governance: FOSSBazaar launched

One of the most important themes for 2008 seems to be Open Source governance: it's not a surprise to me, yet it's good to see I'm not alone, as a number of folks just launched FOSSBazaar, which looks like a very interesting place to cooperatively build and discuss all the boring yet vital OSS paperwork. 

Good stuff and well worth a read: I can see lot of potentially useful material for us, as Sourcesense itself has been busy setting up an Open Source adoption program which is all about proper and controlled Open Source management in complex organizations. This definitely makes for a lot of good discussions at the upcoming Open Source Think Tank.

Macheist is sweet!

If you've been living in a cave as apparently I did, you might have skipped the soon to expire Macheist promotion. For a lousy 49$ ,and for a limited time, you can get your hands on a bundle of 14 top-selling Mac shareware apps, including stuff like SnapxPro, CSSEdit, Pixelmator and more. On top of this, Macheist will donate 25% of their revenues to ten different charities (you also get to choose which ucket should your money hit). Last but not least, there is an impressive quantity discount which tops 33% for three bundles. What's not to love?

It took me just a shout through the office to gather a couple of colleagues who happily fleshed out the monies and are now proud owners of a hefty chunk of shareware utilities. You might want to give it a shot as well, but know you're better hurry: at the time of this writing, the offer is due to expire in 11 hours. The clock is ticking… 

If you still need a reason to fight patents…

… just look at how the tennis star Lleyton Hewitt has trademarked his… salute. Yes, I'm not kidding: apparently you should be aware that next time you hit a smash, your exultant routine doesn't incloude anything that vaguely resembles the Australian player way to rejoice.

When it rains, it pours: it appears that the celebration gesture, which by the way dates back to the Vikings when no stupid patent law was even to be imagined, was actually already trademarked by Niclas Kroon, another tennis player who accidentally forgot to renew the registration. Hewitt agents noticed the brainfart and quickly filed a new record, with an action that closely resembles a Viking foray.

History repeating itself, apparently.  

Somebody gets me a lawyer!

The postman rang our doorbell today, asking for someone to sign a receipt for a certified letter.  I trust I'm not the only one who gets the shivers when certified letters knock on the door: it's rarely good news.

gasIt appears I'm in trouble: when I moved from my house in Milano three years ago, something must have slipped through the cracks, and I didn't receive, or noticed, the final settlement for the gas bill. The gas company is now going after me, threatening litigation and other bad stuff if I don't get my act together and pay the whopping sum of 5.28EUR. They are generous enough to provide me with a two days to find the monies, then they will send the hitman or try to find a way to have me pay my dues. 

So, let's see: 

  • According to the Italian Postal Service website, a certified letter costs 2.80EUR, plus 0.60EUR for the certified notice, so 3.40EUR total.
  • The only way to pay the sum is by showing up at a post office. Nevermind the utter waste of time, the Italian Post will shave me 1EUR for letting me go through a painful queue and hand them my precious, hard-earned money. So much for e-commerce, credit cards and modern payment methods.

Am I the only one thinking there is something horribly wrong here?     

Dutch Transport Card 0wned

So, it's not just me being sloppy with security after all. My Dutch colleagues will be happy to know that they can now travel for free (via Glyn Moody). Much less so, when they understand that 2B$ of taxpayer money went down the drain thanks to a stupid security design relying on a secret algorithm and a short secret key. 

Security by obscurity. Did the Netherlands hit a worm hole and travel in time to sometimes before 1883? Or, considering how the Dutch government has been smart with Open Source, is it just a case of split personality?

136,364EUR a day

How would you like that as a budget for your next web site? The Italian Government today pulled the plug for the uberportal italia.it, after a whopping 330 days of operation and a jaw-dropping bill of at least 45MEUR in taxpayer money going down the drain for proprietary software, predatory consultancies, shameless editors, amateur translations, ridiculous logos and God only knows what else. That's nearly 150KEUR per day, according to the most conservative estimates: to put things in perspective, the OLPC project had to make ends meet with a 12.5MEUR funding.

We had a laugh at it before. Now it's time to cry. And miss the good old times where pillories weren't just virtual things. 

Testing the Asus Eee PC

This post is being written from my wife's brand new Asus eee PC, an outrageously cool piece of hardware and an amazing tool altogether. Ever since I managed to get my hands on one of these babies (thanks to my recent trip to Boston and the great support from Sally), I wanted to take it for a spin: my wife was kind enough to lend me the gizmo for tonight, so here we go with a quick hands-on review, bullet-point style. 

  • first things first: you wouldn't believe how small this thing is. The moment I took it on my hands, my back wanted to throw a party to celebrate liberation from the 17" anvil from Apple I'm usually carrying around.
  • the baby is outrageously cheap, It might not be thin enough to fit in a Manila envelope, but it gives you a lot of bang for the buck at 400$ all-in. Packaging also includes a nice neoprene sleeve (get that, Apple?), so it's not like Asus has been shaving pennies and go el-cheapo. Construction is sturdy, and I have to say that while it lacks Apple uber-polished flair, the eeePC looks and feels just like the average Lenovo from a quality standpoint: it's definitely not a toy.
  • yours truly has big hands, with stocky fingers. I was afraid the small keyboard wouldn't have fit my bill, but I'm pleasantly surprised to see how fast I'm getting used to it. If you're not a touch typist, probably this is not your tool of the trade, but I can clearly see how, with some daily use, the eeePC can be a perfect companion for taking notes on the road. Of course this post is being edited on the eeePC itself (gotta eat your own dogfood).
  • performance, so far, is just fine. Apps are snappy despite the 512MB of stock RAM, and the 2G+ of user-available storage seem to me more than enough for road warrior needs. Especially if you consider how you can max out RAM with a standard 2GB SO-DIMM and use any kind of flash-based storage to extend capacity. Wi-fi support is solid, though not as user friendly as my beloved Macs, and it's fast as a racing horse. Surprisingly fast, actually.
  • connectivity is great. 3 USB ports, Ethernet, modem and VGA output with 1600×1200 resolution. And did I mention the included webcam? Apple is just biting the dust here.
  • my main gripe, so far, is that you don't know in how many ways you will miss OS X until you have to go back to something else. I'm dying to use Expose', and I couldn't possibly live without Dashboard for a long time. I'm curious to see to what extent the eeePC can be hacked with Linux equivalents: I suspect screen estate might be a bit of an issue. Also, while I know this might be stretching Apple EULA quite a bit, I can't help noticing how people has been able to install OS X on this baby. Boy, now I'm tempted!

All in all, I have to say I'm pleasantly surprised by the EeePC, and I'm seriously considering getting one for myself during my next US trip (gotta love that weak dollar). My quest for the perfect computer setup is ongoing (more on this later), and so far the Asus has got quite a headstart over the Macbook Air mixed bag – though it will be very hard to resist the Apple allure. Yet, at 400$, this is the perfect and ultimate hacker joy, and something I highly recommend. Thumbs up, Asus, well done.