Business Model, Part 1/4
A new generation of... ...Open Source business model.
In only 4 years, we developed the most popular enterprise management software ever made. (*)
This document describes the 2009 Open ERP business model. It explains how we achieved such a success.
It also reflects my vision on how to develop Open Source products efficiently.
Fabien Pinckaers, CEO Tiny
(*) 700 installations per day.
We think Open ERP can sustain his incredible growth only if we suceed to benefit from...
● The Community: to generate activities, provide huge feedbacks, and specific contributions.
● The Partners: to create the market, offer value added services and professional marketing.
● The Editor: to follow a product vision, offer guarantees, support partners and communities to help them grow.
● The Customers: to finance this ecosystem, provide feedbacks and experiences.
These 4 actors are very important. If one is missing or unsatisfied, the product can't achieve the growth and quality we expect !
As an editor, our goal is to provide the tools to continuously satisfy, help and sustain: the community, the partners and the customers.
We set up incentives and tools to sustain this business model. They rely on:
Marketing: websites, screencasts, success stories, Documentation: users' doc, community guide, Contracts: partner contracts, training contracts, Platforms: forum, launchpad, irc, Services: quality certifications, support, SaaS, etc.
This document does not describe these tools, but how they will sustain the business model.
The next 3 parts describe the business model and how it will impact:
The Community The Partners The Customers
A business model that... ... fits partners needs.
Business Model, Part 2/4
Our Goal is...
To develop a business model that leads you to the top while supporting the growth and establishing a professional partnereditor relationship to sustain this growth.
The way we want to do business
1. Get Leads(using Units)
2. Resell Editions(get Units)
3. Use Support & Trainings
(using units)4. Increase Partner Level
(starter > platinium)
Get Leads...In 2009, we're going to improve:
Lead Generation Program Marketing
And invest in:Direct MarketingWeb Campaigns
=> To focus on qualification of leads.
... Sell More
Our goal is to provide more customers to efficient partners. The more you sell, the more we provide you leads and presales support.
Marketing PreSales Sales
Editor
Partner
$
Resell Editions...
● Editions = 2nd level of maintenance
(1st level = partner support)
● Guarantees on:● Migrations● Bugfixes● Security issues● Lifecycle
... Limit risks & cut costsBy reselling editions to the customer, you get:● Guarantees from the editor (migration, unlimited bug
fixes)● 15% commissions● 10% as units for services● Increased partner level:
starter > silver > gold > platinum
You can also resell in another way than the editions (your own package including your 1st level of maintenance)
Avoid Hidden Costs
Maintenance contracts prevent you from all hidden costs: Take bugfixes and migrations at your charge, buy units for the support, leads, etc. (instead of receiving them)
Who offers what?● Sales● Support to customer● Support to partner● Maintenance
Editor
Partner
Modules Quality Certification
What's the module quality certification ?180 functional & technical tests of your module
Benefits :● Feedback document: (notes, suggested improvements, notes for
migrations, guidelines, etc.)● Quality certificate for your customer● Press announcement of your contribution● 25% of commission (money + services)● Available in OnDemand offers and guaranteed maintenance in next
editions
QuotationsInclude Editions & Certifications in your quotations
– Analysis● Functional Coverage
● Modules to reuse● Modules to develop
● Integration Plan– Developments– Certification of custom modules– Trainings– Partner support + maintenance custom modules– Editor 2nd level maintenance for official modules
...because it has to be paid by customers, not by partners.
Get Support and Trainings...
Use your units (from editions and certifications) to get, for free:– Support: on your customer projects
● 1 hour = 100 Units– Trainings: for your teams or
customers● 1 training = 450 Units
... to reach perfection
● Develop yourself and support new employees● Satisfy your customers● Improve your quality of service
Partner Relationship
Your activities reflect your quality:– Editions Sold => Customers Success Stories– Quality Modules => Good contributions– Trainings => Better Partner Knowledge
The partner level reflect the partner activity:– Starter > Silver > Gold > Platinium
Levels are reevaluated every 3 months !
Our Goal...The more you do on Open ERP,
the more we work to help you to grow
Starter Sell More (Leads)
Improve Code (Certif.) Communicate on Quality Limit Risks (Maintenance) Provide Support Better Visibility
Platinum
Summary● Resell editions and certifications to customers● Get services units● We provide the services you need (support,...)
Partners do not buy direct services, everything is paid by the customer !
Service Paid ByLeads From PointsOpen ERP Edition Sold to CustomerCustom Certifications Sold to CustomerBugfixes Included in EditionsMigrations Included in EditionsSupport From Points
Projects
ConclusionThis is a scalable model, where:
Provided support, visibility and services grow according to the partners' activities.
The editor has incentives to help partners in their sales and customers projects, in the long term.
Partners benefit from customer's specific requests. Editor benefits and spread the costs of generic improvements (maintenance).
Any question about partnerships ?
Contact our partner manager: Mail: [email protected] Phone: (+32).81.81.37.00
Business Model, Part 3/4
A business model that... ...fits customers needs.
Our goal is...
Provide an environment, an offer of products and services that tend to satisfy our customers...
Provide an environment, an offer of products and services that tend to satisfy our customers... ... and those of our partners.
What arecustomers needs ?
A Strong Product...
Easy to use, with productivity
Covers most needs
With a strong maturity
At low costs
A Good Service...
A quality supplier
Avoids vendor lockin
Guarantees for the future
Value added services partners
Why our business model brings perfect solutions to these needs ?
A Strong Product...Easy to use, with productivity
As an Open Source editor, we focus on simplicity and accessibility of the software. Simply because users installs Open ERP directly, without purchasing anything. They only call a partner if they like Open ERP.
Having hundreds of feedbacks per day in the community forum is also very important to reach perfection !
A Strong Product...Covers most needs.
The Open ERP modular system allows us to never refuse contributions due to editor policies. Every new feature is packaged and published as an official or contributed module.
With the others Open Source ERP's, the editor is in permanent conflict with the community and the partners:
● The editor has to be very restrictive on the features he integrates to keep a consistent product and,
The community or partners does not understand why their specific contributions are not integrated.
=> Open ERP has 350 modules and 10 new modules per month.
A Strong Product...A strong maturity
Open ERP have 700 installations/day. The « On Demand » offer runs hundreds of customers. It means we are on a mass market. Without a strong maturity we would not have launched an On Demand offer:
We are the only ERP having an official On Demand offer !It's the best proof of maturity we can provide.
On Demand requires: automated migrations, easy use because customers start without help, full automatisation, customizations, ...
A Strong Product...Low costs
The Open Source license guarantees you are free to : ● Use without paying● Not have yearly recurring costs● Modify and copy the software
Result:● 25% cheaper for the integration project● 70% cheaper for recurring costs
A Good ServiceQuality Value Added Suppliers
Our business model define incentives to continuously improve the quality of our partners:● They resell editions => The editor's guarantee● The more they have customers, the more we provide them trainings and support
We have tools to control and help them improving their services:● Modules Quality Certification● Starter > Gold > Platinum
A Good ServiceAvoids Vendor LockIn
With our Open Source license:
The one owning the code is you ! not
the supplier !
A Good ServiceGuarantees for the future
Guarantees are provided by the editor to satisfy customers needs in the long term, through the editions:
● Unlimited bug fixes,● Fixed Price Migrations,● Maintenance,● 5 Years lifecycle.
Want to be a customer?
How to proceed? 1) Discover Open ERP
Install It
Read documentations, check openerp.tv
2) Get in Touch with a Partner:
Contact on OpenERP.com
Partners will recontact youOr contact a partner Directly
3) Ask for a prototype/analysis
4) Launch the Project
5) Maintenance contract
Select the Right Partner/Solution
Size / Need OutOfTheBox Few Adaptations Specific Solution
<15 users /
15 – 100 users Integration with partner Integration with partner
100 – 500 users Integration with partner Gold or Platinum Gold or Platinum
>500 users / Gold or Platinum Platinum
OdOO, Buy Online OdOO + training/partner
OdOO + Partner
Choose the right approach:● Integration Project: services, custom adaptations, specific development, data recovery, methodology● On Demand (OdOO): low costs, ready to use, no customization, few support hours, do it yourselfChoose the right partner: silver or platinum ?
Why trust our partners?
They are PROFESSIONAL !
They have a contract and a strong relation with the editor.
The more they make quality, the more they become gold or platinum.
Our partner contracts include trainings, support, frequent meetings.
The editor provides guarantees.
Why Editions ?These editions provide you the guarantees you need to run Open ERP in a professional environment.
Guarantees on:
MigrationsBugfixesSecurity issuesLifecycle
Modules certifications
You need a new specific module? With the modules certifications, we can guarantee:
A good integration with the future versions of Open ERP.
A high level of quality in the code developed.
An offer for maintenance
Your module will be reused by others, so it will benefit from others contributions.
Conclusion
Our business model does not define any constraints, but only incentives ! As everything is free, we know it's the customer that controls the game...
Our success is financed by customers. That's why we focus on improving our services and those of our partners.
A business model designed... ... for the community.
Business Model, Part 4/4
It's very important to have a strong and active community. The more we offer to the community, the more the community will make for the product.
What does the community
need ?
The Community needs ...
● Everything for free (no need for services)● Easy access to the software● An OutofTheBox software● Never be forced to purchase anything● Tools to sustain collaboration and
communication
And, ... like every one on this planet..., being listened.
If everyone works this way, the community will contribute efficiently:● Help in translations,● Contribute new features,● Provide feedback and bug reports,● Communicate on the product,● Help each others.
And this will lead to a very fast growing curve of the product:
● Increased maturity (lots of testers)
● More features (tons of contributions)
● Smarter product (lots of discussions and critics)
● Huge spread of the product (they communicate)
We want to achieve the best enterprise management software in the world. To achieve this perfection, we push everything to the community.
The Problem:
We need a way to provide incentives to customers and partners so they tend to contribute everything they make.
By default, most enterprises do not contribute to open source projects. If incentives are strong enough, they will.
Release every module as Open Source
Our license (GPL v3) forces every modification of the software to be open source.
As to motivate enterprises to distribute their code, we provide maintenance on open source modules.
To motivate partners to contribute, we offer services to partners (support, training) for each quality certified module released.
The more a partner contributes, the more it becomes “Gold” and get visibility on our website > get customers.
Easy access to the software
All our english documentation is free.
To encourage authors to write translations or new chapters, we have contracts with editors to sell paper books and pay author rights to contributors.
To help people or enterprises to start with Open ERP, partners provide services offers (trainings, support). We provide the training material to partners.
We focus on the simplification of the software: simplified views, tooltips, configuration wizards, autoinstallers, ...
An OutOfTheBox SoftwareOur professional editions provide quality services to customers: unlimited bugfixes, migrations,etc. These contracts guarantee that the improvements are applied on the public sources on Launchpad.
All improvements in the software requested by a customer, are pushed back to the community. So, community can benefit from a very mature and fast improving software.
To the contrary, all improvements proposed by the community are reviewed by our quality team so that others can benefit from it.
Never be forced to purchase anything
The GPL license is the best protection the community can have. It guarantee:● You can always get the sources of the software,● You do not pay to get the sources,● You are free to distribute, use and modify.
As the CEO of Tiny, Open Source is all my life and my passion. Trust me, we will never do something that do not fit the “Open Source” mind.
Tools to collaborate and communicate
As to help the community to grow efficiently, we setup tools to organize the collaboration: launchpad (code, translations, bug tracker, answers), forum, irc, planet, etc.
The Open ERP website is dedicated to customers and the Open Object website is dedicated to the community. Both websites are based on the same software, but it allows us to offer different tools and communications.
As an example, the Open ERP planet is managed by marketing guys for a professional communication. The Open Object planet is fully open, every contributor can post.
Being listened
The community provides a very good feedback on the software and on the communication/organization.
This feedback is very important to achieve a perfect tool, we read it every day. Just have a look at how often managers at Tiny or partners are discussing on the forum and/or IRC.
Conclusion Community
Once a month, we organize IRC community meetings with the Tiny management. Join us at one of these meeting to discuss on how we can collaborate more efficiently...
And It Works !
I started alone 4 years ago, with 1000 EUR.
Today, we are selffinanced with:● 85 employees,● A partner network in 35 countries,● The most advanced ERP in the world.
With our Open Source vision, we never had to do a fund raising and we continue our organic growth of 100% per year !
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