The open source download canard

Open source is not a volume game. It's a marketing intelligence game.

I'm not sure why we continue to persist in talking about downloads, but I'm with Stephe on this one: downloads are not the best measure of success in open source. In fact, they're often not even a remote predictor of success (i.e., sales). Having them, as Stephen O' Grady notes, is much better than not having them, but it would be erroneous in the extreme to assume a company with 100,000 downloads per month necessarily has a bigger market opportunity than a company with 20,000 downloads per month.

The 451 Group's Matt Aslett points outthat marketing automation software like Loopfuse can help to supercharge an open-source company's conversion rate. Same number of leads in, many more conversions (sales) out. I agree with that. Aslett writes:

Of course, the statistic [in Loopfuse's results] that will have jumped out for many people is the drop from a 40X increase in qualified leads to an 8X increase in engagements. The theory that leads are not enough in open source software has also been well documented. The ability to turn those qualified leads into paying customers remains a missing piece of the commercial open source puzzle.

As I've written before, it's not how many downloads an open-source company has, but what it does with them. JBoss' downloads largely flattened out over time, but it's revenue against that "fixed" number of monthly downloads exploded. Why?

Because JBoss discovered added value that it could sell to these downloading prospects, and because it became a much safer bet as a company. Hence, it became easier to give money to.

Downloads are useful in and of themselves because they allow an open-source company to permeate a prospect for very little cost . But turning those downloads into dollars is not a given. It's hard work. Tools like Loopfuse make that work easier and more productive, but you have to use them intelligently (which is why one of Alfresco's first hires was the man who built JBoss' marketing infrastructure).

If you're in open source and you want to make money, you need product differentiation (in the way of value-added services of some kind) and you need marketing automation. Period. No leeway on the two. They're required.

So, if you're an open-source company and you're patting yourself on the back for your download count, don't. Downloads are nice because ubiquity/abundance is nice. But if you're not selling real value into that abundance and if you're not finding those downloaders efficiently then you will fail.

The key is not to find the one customer in 1,000 who is willing to pay for something they can otherwise get for free. The key is to create value and processes that turn this into a one in 10 relationship of download to sale, or better. Open source is not a volume business. It's an online business that requires online intelligence.

This is why Alfresco can make considerably more money on 30,000 downloads per month than other open-source companies have with significantly more downloads at a similar period in their corporate existences. We've learned from JBoss, Red Hat, and MySQL. They paved the way. What are you doing to follow their lead?


Disclosure: I am an employee of Alfresco and an advisor to Loopfuse.

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About the author

    Matt Asay is chief operating officer at Canonical, the company behind the Ubuntu Linux operating system. Prior to Canonical, Matt was general manager of the Americas division and vice president of business development at Alfresco, an open-source applications company. Matt brings a decade of in-the-trenches open-source business and legal experience to The Open Road, with an emphasis on emerging open-source business strategies and opportunities. He is a member of the CNET Blog Network and is not an employee of CNET. You can follow Matt on Twitter @mjasay.

     

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