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The Rise of Open Adoption Software, OAS
What is Open Adoption Software (OAS)?
open · adoption · software /ˈōpən/ noun
software that
1. is openly built by a network of developers, end users and ecosystem partners; 2. is openly and freely adopted by frontline developers who can become potential
customers; 3. is embracing of proprietary, valued-added bits to help users get the most out of their
software; 4. is now the foundation for how enterprises think about IT
a definition
what’s giving rise to OAS?
A change in requirements and attitudesthere’s a real shift in how end users think about and adopt technology
innovation through networks
developer power everything’s web-scaleneed for speed (& control)
powerful contributor networks and web-based communities are driving steep innovation curves. open projects spring up
around critical-mass pain points and attract
thousands of contributors
users are taking an “open-first” view of the world,
driven by a newly empowered front line
developer who pulls best-of-breed solutions off the
shelf
the requirements of today’s global, web-scale applications
dwarf the capabilities of traditional software vendors;
many open projects are founded from these exact
challenges with scale
IT leaders need to move faster than traditional vendors allow, while
having the freedom to touch and modify code on
the go — minimizing unknown dependencies
Mgm
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A redrawing of the enterprise IT stack
Storage, Networking, Compute, Web Server
Data Management
Application
Storage, Networking, Compute, Web Server
Data Management
Application
we’re seeing a floor to ceiling remodel using open adoption software (OAS)
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Break open tech and non-tech companies alikeand you’ll find they both adopt and contribute to open technologies
Hundreds of billions in equity value built on the backs of open adoption software and technology. These CTOs and CIOs are all thinking “open first”
can OAS companies be real + independent?
Enjoying steeper adoption curve
paid customer count**
Downloads* of
2010 2011 2012
200,000
400,000
750,000
3300
201120102009
23001400
* Github & public estimates **Splunk S-1
Not all users are created equally; but OAS can rapidly find itself in mission-critical production environments, without ever
having to talk to a procurement department
User
s/Do
wnl
oads
/Inst
alls
open adoption software spreads much faster than proprietary counterparts
Mulesoft
OAS companies are scaling quickly*from founding, to $100m ARR — they don’t look dissimilar from their software counterparts
y0 y1 y2 y3 y4 y5 y6 y7 y8 y9 y10
WDAY SPLKCRMCloudera
$100m ARR
Acquia
*Source: filing company 10-Ks, Accel estimates, press release mentions
Github Tenable
NOW
$20b+ est. private + public equity value of OAS
companies today (excl Red Hat)
200+
11OAS companies valued
above $1b**
*Black Duck OPENHUB Project Statistics **Accel, Crunchbase, Mattermark, Tracxn
10
**
unique OAS technology startups that raised
funding over last decade
30+unique venture capital firms investing in OAS companies last 3 years
$7b+cumulative venture
dollars in OAS companies, 2016
By the numbersOAS vendors receiving meaningful VC support over the past few years
OAS: the next wave in software
Application/Client ServerMainframe SaaS Open Adoption Software
Mar
ket R
each
/Inno
vatio
n
Each phase enjoyed easier deployment and end-user distribution
more widely distributed and driving greater IT value than anything before it
how are OAS companies constructed? (answer: it’s different, but luckily, there are some good frameworks emerging…)
A later starting line
traditional saas/proprietary software timeline
start companyidentify customer
pain pointsbuild products
iterate towards product-market fit
scale go-to-market
drive customer success
retention/ expansion
open adoption software timeline
create an open project to solve
critical technology pain
build community of like-minded
developers
determine customer interest in similar
pain points / TAM
start company build value-added products
harvest early community adoption
retain + expand
OAS companies start well after market proof points have emerged
Phase II: Product Definition & Packaging
Nail all three phases in sequence to build a long-term, durable business
Phase I: Project Community
14
Phase III: Profit Scale & Go-to-Market
How do we build a high-energy, organic community,
while ourselves becoming the leading voice/brand behind
the project?
How do we leverage inbound support/services
engagements to help define product requirements and
core customer needs?
How are we filtering through our community adoption to
hone in on mature users, while going to market with
our proprietary, value-added products?
Three P’s of OAS companiesalmost all OAS companies follow these three “phases” en route to independence
Founding, Seed, Series A Series A, B, C Series C, D+
Phase II: ProductPhase I: Project Phase III: Profit
Open Dev Product Dev Sales Marketing Open Dev Product Dev Sales Marketing Open Dev Product Dev Sales Marketing
$ In
vest
men
ts
R&D: heavy community development phase• Ignite the contributor base (deep and wide) through open
development • Become the defacto project steward: are we the driving
technical voice in the community?
S&M: brand marketing• Grassroots, developer evangelism via content, forums
and Slack • Sharing new use cases — what’s possible now that
wasn’t before? • Aim to be leading brand and authority associated with
the open project (eponymous)
15
R&D: ramping product development + support • Centralize key contributors within your org • Leverage inbound service and support requests from early
adopters to help organize broader community efforts and shape a shared roadmap
• Identify customer pain points that can be solved with value-added proprietary products
S&M: building the pipeline, ramping sales efforts• Sustained community marketing and use-case evangelism • Marketing starts going beyond front-line developers, to
include key business stakeholders • Service and support requests form the basis of an early
sales pipeline for value-added products • Crisp view of what a production customer looks like
R&D: product development at scale• Open development reaching steady state • Major efforts around proprietary products that extend
the value of the underlying project • Deepening hooks with prevailing cloud vendors • Building out necessary integrations with partners
S&M: sales effort at scale• Beginnings of a repeatable sales playbook • Targeting accounts that are production-ready and have
expansion opportunity • Marketing becomes more business-centric and
solutions-oriented • Verticalizing sales efforts to sell project + products
against industry needs
Each phase has its own set of inputs…
Go To Market: “selling” (TAM) vs. “harvesting” (TAC)
“Selling” motion = concerted outbound effort to find customer n+1
… and get them to deploy product
Repeat sales / Referrals
Prospecting via TAM
Initiate Contact
Identify Needs
Present Offer
Manage Objections
Close Sale
Traditional Enterprise SW Sales Process
Total Addressable Community (TAC)
User Acquisition Cost (UAC)
User Conversion Cost (UCC)
active project users deployed in production
Subset of Paying Customers
What’s Different for OAS
“Harvesting” motion = sorting through highest priority opportunities among of community of
existing users
A few things to remember…
Being “open” is not the be all, end all still need great teams, strong execution, and a large market — not all projects will become companies!
To come out on the other side, focus on the core inputs to OAS company building
Big markets
Strong teams
3 P’s
Funding
Mission-critical use cases
HadoopMule
MongoDrupal
Cassandra
d3.jsChef
PuppetSalt
Kafka
Budget
The cloud plays a BIG part here!public clouds will power a lion share of OAS — find differentiated and unique areas to add value!
Cloud vendors will offer plain-vanilla distributions out of the box; developers
can quickly spin up, and other non-power customers get many simple
needs met
Power customers with complex workflows and critical LOB applications
will elect for pure-play vendor distributions, paying for capability and
control
As applications deepen and become more mission-critical, customers
purchase products to further drive-value — well beyond scope and reach of the
public cloud players
Bare-bones project, offered as-a-
Pure-play distributions from OAS vendors
Value-added products from OAS vendors
DirectorAnyPoint
Deve
lope
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t
o en
terp
rise
to more com
plex Simple requirem
ents
investors in a spectrum of software categories:
