Entrepreneurship for Engineers: Non-DevTool Open Source
In spaces where people talk about open source companies, whether it’s at conferences or in publications like this one, people tend to focus on developer tools. There are, of course, plenty of developer tool companies that are also open source companies, and many of the really well-known examples, like Red Hat or pre-license-change HashiCorp, are DevTools.
But financially successful open source companies are narwhals, not unicorns: They actually exist, but spend a lot of time going undetected below the surface.
“It’s true that it’s a bit more rare in the application layer,” said Frank Karlitschek, CEO and founder of Nextcloud, about the fact that there are more open source companies in, for example, the software infrastructure space.
“I don’t really know why, to be honest, because the benefits are very similar — the benefits for the users and for the company and the community.”
Let’s shine some light on the world of open source companies that don’t necessarily sell to developers — and why they still think an open source business is the right way to build their particular company.
Adoption and User Feedback
Just like for developer tools, one of the reasons that a non-DevTool startup might choose to go open source is to drive adoption. It’s just that the communities adopting the project are not developers.
Justin Simpson, managing director at Artefactual, an open source company that makes digital preservation and archiving software, said at a conference recently he spoke with someone from Indonesia who had used one of Artefactual’s projects to create an automated way for any small community to build a web-based archive. There are about 400 of these websites around Indonesia, all created without Artefactual’s knowledge.
“The same things have happened in places like Brazil and Spain,” Simpson said. “We’re working with a community of users who are, by definition, conservative, like people who work in archives are not typically on the leading edge of things. So when they see hundreds of organizations using the software, they are more likely to be our customer.”
Karlitschek said his company gets a lot of inbound leads every day. “Our open source strategy means we are very, very well known,” he said. “We have millions of users all over the world.”
This doesn’t mean he just shakes money from the tree, however — the quality of the leads tends to be lower, because a lot of these potential customers can’t actually afford to pay for services and support from NextCloud. “We really have to spend a lot of energy in the qualification phase in the sales cycle,” he said.
For OpenProject, an open-source project management company, having an open source project means getting excellent feedback about the product, knowing what new features to prioritize and help with testing the product, according to Birthe Lindenthal, the organization’s co-founder and CMO.
Trust and Transparency
There are a lot of ways an organization has to trust their software vendors, and being an open source company helps in more than one way. First of all, all of the three founders interviewed for this article sell to governments — which is not a coincidence.
Governments tend to be especially paranoid about security, and the ability to audit the code themselves is important to security-conscious organizations, whether the software is a DevTool or a human resources tool.
“We have a lot of paying customers in areas that are very security sensitive,” said Karlitschek. “From governments to defense, to healthcare and banking, all these customers really like that, with Nextcloud, you can audit the code, you can look inside, you can check if there are backdoors.”
There are other types of trust, too. For Artefactual’s customers, Simpson said, being an open source company is a critical part of the company’s branding, and it signals that the company doesn’t just exist to make a buck.
“The academic research libraries, government archives, many of the people working with these organizations have had many bad experiences with vendors,” he said. “Being open source helps us to step outside of that.”
Artefactual is still a vendor, of course, but using open source software is a differentiator and makes the relationship seem less adversarial for customers.
This might be ironic, but non-DevTool open source companies are at least as successful at getting code contributions for their projects as DevTool companies are, whether in the form of completely volunteer contributions or customers who pay them but also contribute actively to the open source project.
“We have huge clients who actually have employees who are working on OpenProject or who are developing integrations to the back end of OpenProject,” Lindenthal said. “Also, especially within the public administrations, they pay us for further developers of the software, and they always give the source code, like in terms of upstream contributions, back to the community. So this is like a real open source ecosystem.”
Nextcloud also counts on volunteers to improve the project — in many ways.
The company employs about 90 people, Karlitschek said, “but we have a community of over 2000 volunteers.” And that’s not even counting things like translations and plugins, all of which contribute to the Nextcloud ecosystem.
Is Open Source the Right Choice?
Open source still isn’t the right fit for every technology company. “There is a space for proprietary,” Karlitscheck said. “You need to have a clear strategy, like engineering, product development strategy, community strategy and marketing strategy — if you have that, then open source can be beneficial.”
One criterion Karlitschek recommended is thinking about whether a project has both a personal and professional use, because those types of projects are most likely to be successful at building a community.
So is open source right for your startup? It depends. But an open source approach can be a good fit even for companies that don’t fit the stereotype of an infrastructure tool for experienced platform engineers.