A few words on – The Cloudera Model

Mike Olson, the Chief Strategy Officer at Cloudera, eloquently articulated the philosophy behind their business model in this LinkedIn article titled The Cloudera Model. I highly recommend anyone working on open source platforms and building value on top to stop coding, and read this article. Like right now!

I would like to highlight one quote from the article:

You can no longer win with a closed-source platform, and you can’t build a successful stand-alone company purely on open source

Finally somebody said it!

For years, I have been convinced of this model. I have often wondered how pure open source companies actually make money and justify such large valuations without offering any kind of monetization other than offering training, support and development services on top of the open source projects. Some do it via dual-licensing model, as Mike points out in his example of how SleepyCat worked it before getting acquired by Oracle.

Now, I don’t know if this is the best model that Mike has articulated, but it is close to Winston Churchill’s idea of democracy where he said something along the lines of:

…it has been said that democracy is the worst form of government except all those other forms that have been tried from time to time.

I feel the similarly about the Mike’s call, and I believe this is the best model of all the models out there currently to think of how you want to build a company and balance between open source and closed source to create unique value on top of open source. For most part, it seems that people agree with Mike’s article (based on LinkedIn comments and tweets). Those that don’t agree are in denial.

Use, contribute back, innovate (both open and closed) and create value – that sounds like a good viable business model.

Advertisements

Balancing Act: Build and Buy Strategy

In most startups, you begin with a hypothesis of how you are going to address a need, and hope to build a product or a solution that can fulfill that need and build a business out of it. The time to market is one among the many pressures weighing down on your mind. How do you execute in this scenario?

1. Build: You can build everything on your own. Though you don’t know what to fully build yet,  you will discover along the way.
2. Buy: You can find other technologies that address certain problem in a generic way and bundle (integrate) those to create your product. ¹
3. Build and Buy: You can build what you think is the core competency that your startup is going to focus on, and buy/acquire the other peripheral components to create your full offering.

Sometimes building everything on your own is stupid, why would you want to waste your time and resources in solving problems already solved. And you can’t just buy everything and cobble together a unique product that is worth something. So you have to really come up with a Build and Buy strategy for your product to both be uniquely valuable and addresses time to market. Time kills startups.

So if you are in charge of building the product, you are bound to face all these pressures coming from your CEO, CTO, Marketing and Sales visionaries in your company. And this is where if you are not careful, you will end up building something that probably takes more time, is not elegant, and does not add any real value. And thus, if the product has no real value, how can you expect your company to establish itself as a viable business. The paranoid around you will start proposing ideas, most of them tend to be hare-brained, spur of the moment types coming from really loud voices in the organization. This is the time when you have to stand strong. After all, you are there to build a new product that offers a new and unique value proposition and change the dynamics in the market.

I have gone through this experience myself and wondered if I and our product team caved to these pressures and simply bundled what is out there already in the market, would we really be a product company or just another integrator? Where does innovation rank? Where is the IP that is going to make your company highly valuable and set us apart? As a product owner, you need to really think hard and have the courage, conviction and vision. You need to lead and convince others that what you propose to build will be more valuable than just cobbling together a piece of other technologies. At JackBe, we established very early on that innovation was going to be the key value my team was going to live (or die) by, and as such, we went against the opposing forces time and time again to innovate and really build the core technology and IP that established JackBe as the market leader in enterprise mashups and real-time intelligence. Our product gained customer admiration, won several awards and eventually, the company was acquired by Software AG because of the value of our unique product and IP.

I am not saying that your complete product has to be 100% home-grown, every line of code written by your team. There are plenty of FOSS products for you to build your unique product or platform. And there may be commercial products or components that you might want to OEM and license to build your product. There is no need to build those from scratch. That would be silly and a stupendous waste of time and resources. The key is to identify what is core to your differentiation and what is commodity, and then build your core by leveraging the commodity components out there and that’s how you balance the forces and address the time-to-market. Some common commodity components to consider (I only mention a few to just illustrate the example)²:

• Server Side (Java Based): Application Server (Tomcat/Jetty/etc.), Application Frameworks (Spring, Akka, Play, etc.), Utility Libraries (Apache Commons, Apache Axis, Saxon XML Parser, etc.)
• Database Systems: RDBMS (Apache Derby, MySQL, etc.), NoSQL (MongoDB, Redis, etc.)
• JavaScript: jQuery, jQuery Mobile, Prototype, Angular JS, etc.
• Visualization: Fusion Charts, High Charts, D3, NVD3, etc.

So my message to you is this. Don’t just bundle other COTS to create your product. It won’t help you to build a revolutionary new product. Instead make  your own unique and secret sauce and mix it with what is commodity already to create a high value game changing product.

---

^{1 – Buy: For the purpose of this discussion, I am using ‘buy’ very generically. In some cases, you don’t really buy, but you can just acquire it via partnership. For open source products and components, you just use it (beware of what open source license they come with and their restrictions there upon. My favorite FOSS licenses are Apache 2, MIT, BSD. I tend to stay away from GPL (all versions) and LGPL.
2 – Free or Commercial: Note that some of the components are open source, and some are commercially available sold by other vendors in an OEM friendly license that you have to acquire from the respective vendor for a price.}

Apple – Why they rule, and iPad2: my first impressions

I tuned in to the TechCrunch Live Blog today to get the dish on iPad2. I was skeptical about this launch. Rumors were it would be thinner, lighter, would have a camera, and so on. I didn’t care much for any of that, so I kept my expectations low. I already own an iPad and I wasn’t going to rush and get a new one just because. Don’t get me wrong, I love Apple stuff, but I am not total nuts to get every little version that comes out.

But now after ready the details on the iPad page at Apple.com and hearing about it via the live blog, I am impressed. I am impressed by the two Apps featured in the launch and look forward to getting GarageBand and iMovie on my iPad. I am not so hot on the white iPad, but who knows, I might change my mind after looking at the real thing. I also love the iPad Smart Cover, which is brilliantly designed, so simple.

Coming to why Apple rules…it is all in the way you think about a product.  Steve Jobs said when he closed the show with a statement:

“A  lot of folks in this tablet market are rushing in, looking at this as the next PC. hardware and software are done by different companies, talking about speeds just as they would with PCs. Every bone in our body says this is not the right approach.”

This is a fundamental difference between Apple and all the other wannabes, in how Apple (and Jobs) views a product: as an integrated system  (of hardware, software and user experience) and eco-system (Apps, Books, Music, Movies, Videos, …). This is the reason why no one is going to beatthe iPad / iOS for some time to come, in spite of all the hoopla about Android based tablets. Google is just beginning to think about the eco-system, but has no integrated vision like Apple. All the other device vendors are beginning to create their own fragments of marketplace which in my only makes it confusing and difficult for the users. Besides, I am not convinced that users will pay for mediocre content, apps or experience. Apple has set the bar quite high and others are only getting started. Which means, they have a lot of catching up to do. While they do that, Apple is not staying  put, they are forging ahead. So I am convinced that it will be difficult for other tablets to achieve the level of commercial success the way iPad did for Apple. It is not about the OS (Android or iOS) or how many Android devices are shipped compared to iOS devices. Those stats only tell you just that, not how much revenue the devices are generating. The difference is what Apple has been known for for decades: They just “Think Different!”