Perspective at //build

Recently I had the opportunity to share stage with some brilliant internal and external colleagues advancing open source in the cloud at //build, Microsoft’s developer conference in San Francisco. Beyond having been able to talk to about 400 attendees about how we’re approaching open source in the cloud, how customers are building open source applications in Azure and much more, speaking at //build had a very special meaning for me.

Before joining Microsoft, I didn’t have a lot of exposure to the Microsoft developer ecosystem, the Microsoft subsidiaries themselves or the employees working there. I was focused in a number of open source projects such as Canaima (Venezuela’s national distro) a number of communities and expanding a small open source system integrator in the region.

Most of my interaction with Microsoft was limited to public debates, at industry events or in Congress, or to the ISO/IEC 29500 discussion back in the days (both of which I’ve covered in this blog, in Spanish) However, around 2009 or so, the company I was a CTO for and Microsoft decided to create an Open Source Interoperability Lab in Venezuela. The idea was to document common hybrid technology use cases (such as Samba-based DCs in Windows environments, or PHP and ASP.NET communicating via ESB) and transfer that knowledge to customers.

As a result of that effort, I ended up being invited to and participating in PDC09 in Los Angeles. PDC was the precursor of //build, a yearly conference aimed at Microsoft-centric developers. There are 3 things I remember clearly from PDC09: one, was the “convertible tablet PC” they offered attendees (running Windows 7 bits that rapidly became Debian bits), the second one was the PHP SDK for Azure, and the preview access to that new “cloud” thingy, and the third one was an open source roundtable led by Miguel de Icaza that mainly talked about governance and CodePlex.

While I didn’t know it back then, a lot of the things discussed in that roundtable influenced my decision, about a year later, to join Microsoft and work in open source strategy; a journey that brought me to Azure in less than 5 years. But I digress, and that whole story deserves another post.

Maybe some of the attendees then foresaw that Microsoft would end up acquiring Xamarin, or that attention would be put in non-CodePlex initiatives, like GitHub. What I really didn’t expect was that all of that new reality would converge into a PDC-like event, less than 10 years after. This year at //build it did, and then some.

For me, speaking at //build was a humbling opportunity to reconcile the many worlds increasingly pulled together by the force of open source. From the announcements to the content and all other metasignals at the conference, it was incredibly exciting to see this transformation manifesting itself within Microsoft’s developer community.

It highlights the importance of leaving no one behind when we explore new paradigms and technologies in the cloud, and how every individual in the open source community can exert change in this industry.

Planetas en Inglés

Thoughts on growth and open source services

For many years I was infatuated with the idea of creating value out of open source professional services. To a certain extent, this is a function of when, where and how I was exposed to open source. Even today, after acknowledging the challenges of this model (the hard way) I find myself spending time modelling what needs to change in order to innovate it.

While today there are statistically no skeptics of the tremendous impact that open source software has had in and beyond the IT industry, thinking prevails that the open source opportunity doesn’t lay on professional services.

It’s commonly accepted that only a handful of players have found success in this model. In fact, some would argue that it can only be one that exhausts it for everybody else. Media commentators shun on rising startups whose business model smells too much of support and services.

As Ben Werdmüller recently wrote (motivating me to write this article) those services are not recurring and not scalable. And there’s also proof in the market that well designed, talented and recognized organizations eventually fail in their efforts to seize the open source consulting business.

Back in 2008, after 5 years selling open source services either as a freelancer or in small firms, I was invited to lead technical strategy for an open source focused system integrator in Venezuela. The organization had recently scored a support agreement with a large multinational hardware vendor for a subset of their customers’ Linux needs, and they were looking for a portfolio and an attractive environment for talent and for growth.

I spent the next 3 years building a team of 50+ in several countries in Latin America, shipping open source products and solutions and managing large consulting projects for customers in the public and private sector. That support agreement became 3 partnership agreements with large IT multinationals. Yet with all the impact, the challenges of dealing with the subtleties and complexities of the open source professional services challenge remained unaddressed.

There were numerous learnings I grabbed from that experience, ranging from managing a team of talented professionals who went on to highly successful roles in Europe and the Americas, to the art of marketing something as bland and commoditized as open source consulting.

Among the fun learnings: with a highly mobile talent pool in multiple countries we managed our daily operations via IRC. We also built a lean-and-mean sales process led by the delivery teams, not sales, embraced document and knowledge management and invested in the communities and ecosystem that help open source be successful.

But I digress. Portfolio-wise, we had organized our offering in three core areas (infrastructure, applications and databases) and a number of incubation areas that gave us a unique competitive advantage such as knowledge management and end-user experience (we focused a lot on Linux in the desktop) or business intelligence and unified communications. All with open source, all with Linux.

Yet market disruptions, such as government policy in an economy where public sector concentrates an overwhelming amount of spending power, contributed to mask the unaddressed. Since 2004, there was a stated pro-open source policy in the public sector which evolved into a number of unstated policies trickling to public and private sector alike.

When this policy was introduced there was a small talent pool to cover the complex needs of a public sector that sprawled beyond the vertical with plenty of Oil & Gas, Financial Services, Manufacturing and other needs. Furthermore, virtually no relevant foreign organization took advantage of this opportunity due to general market conditions, a difference between how similar policies were rolled out in, for example, Ecuador (where the US dollar is the local currency)

Therefore, supply and demand reality made margin management, a critical discipline in the services business, an afterthought. Plus, the depth and quality of our technical results was a catalyst for business opportunities so marketing wasn’t really in the picture. We were a go-to open source consulting company and we got away with selling bland OpenLDAP clusters and Asterisk IPBX as if they were actual products, repeatable and scalable.

And in exploring other models we found support was something we actually enjoyed: we were really proactive and fanatical about it and generally speaking never had to sell a support agreement. In the training side of things we managed to set consistency standards across courses and deployments but all accrued to that non-recurring base of services, to that dreaded hourly rate. So they were never differentiated sources of growth as it always converged in a consulting project.

At some stage we did invest in a products team that explored all the right things which years later hit the market (agile embedded with general purpose Linux OS, SaaS and cloud-powered IPBXs, analytics and insights, etc.) but the reality is that our operation corpora was built on a professional services foundation which made it unrealistic to detach. We tried using a different brand for our product labs, but the talent we had attracted and developed thrived in services.

I still see the boundaries of a VAR, an ISV and an SI as pretty artificial in the open source world, just as I find it less relevant to look at the boundaries of development and IT professionals with an open source hat on. Of course the business models are different, some are based in volume and depend on marketing and channel while others are based in margin and depend on trust and references. This mix is not different from what we’re seeing today in open source startup IPOs.

Today I don’t struggle to articulate a value proposition or find demand for the open source capabilities I’m selling. I’m struggling to find the right partner to help me scale. And I refuse to believe I can only go to a global SI or a well-known Bay Area ISV for those needs, when I have lots of VARs, SIs and ultimately great people in local markets who can land meaningful solutions. Yet I’m wary about putting all the eggs in the basket of building value out of open source professional services.

We’re now living interesting times where the successful players in this space are crowd sourcing services growth via channel. This is a fascinating move from an open source support and services behemoth and has a lot of potential if it can connect the local talent with consistency that accrues to growth.

In the meantime, common sense will still indicate that entering the market to sell non-repeatable open source professional services can be highly rewarding in developing people, acquiring and developing know-how and making an impact. It can even help reduce the consumption gap for a complex product and help build market share. It just doesn’t seem to be a high-growth strategy for most people out there.