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Open Source Software Development by TLV Partners
The document discusses the significance and growth of open source software, highlighting that over 78% of companies utilize it, and it plays a critical role in various technologies, including IoT and big data. It outlines the decision factors for customers choosing open source, such as quality and cost-effectiveness, along with community involvement and potential business models for software producers. Furthermore, it notes significant investments in open source companies and the increasing prevalence of open source projects in major industries.
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Open Source Software Development by TLV Partners
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- 2. Open Source “open sourceas a development model promotes a universal access via a free license to a product's design or blueprint, and universal redistribution of that design or blueprint, including subsequent improvements to it by anyone.” Source: Wikipedia 2
- 3. Open Source SWin Numbers 3 Source: Black Duck, ComputerCorldUk, IDC Number of Open Source Projects >1.8M 485 of the top 500 Supercomputers run an open source OS. 80% of Smartphones run an open source OS (Android)
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- 5. Open Source SWis widely used Black Duck Software and North Bridge's survey found that 78%of companies run open source software 5 Source: ZDNet
- 6. The Power ofCommunity 6
- 7. The Community asa Double Edged Sword “Having some components of your solution stack provided by the open source community is a fact of life and a benefit for all. So are roads, but nobody accuses Fedex or your pizza delivery guy of being evil for using them without contributing some asphalt. Commercial entities provide needed products and services, employ people and pay taxes. We might want them to make more open source contributions , and some do, but they are not morally obligated to do so.” 7 Merv Adrian VP Research, Gartner 2011-Present
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- 9. Customers’ Decision Factors- Open Source or Not • Better SW quality • Lower costs • Freedom from vendor lock-in • Security • Flexibility • Internal technical capabilities • Support 9 Source: Black Duck - The 2015 Future of Open Source Survey
- 10. Order of costumers’decision factors Over the years 2011 Freedom from vendor lock in Lower costs Flexibility Better SW quality 2012 Freedom from vendor lock in Flexibility Better SW quality 2013 Better SW quality Freedom from vendor lock in 2014 Better SW quality Freedom from vendor lock in Ease of deployment Ability to access source code, add features and fix code 10 1 1 1 1 2 2 2 2 3 3 3 4 4
- 11. Decision Factors ForOpen Source Software Procurement 11 Source OSS-Watch
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- 13. Expected High Growth “Inthe coming years, we will see open source unlock the potential of a new generation of technologies—the Internet of Things, big data and cloud computing creating many billions in value.” Source: http://www.northbridge.com/ 13 Paul Santinelli General Partner at North Bridge
- 14. Open Source ResourceVolume 14 Source: Black Duck The number of open source projects grows significantly
- 15. Top Open SourceSW Deals Company Date IPO/M&A Post Deal Valuation/Price Red Hat Aug 1999 IPO $9.2B Cloudera Inc. Mar 2014 $900M funding round led by Intel $4B Sourcefire Jul 2013 Acquired by Cisco $2.7B Novell Nov 2010 Attachmate Corporation $2.2B Hortonworks Dec 2014 IPO $1.1B MySQL Jan 2008 Acquired by Sun Microsystems $1B Sourcefire 2007 IPO $700M Cygnus Solutions 1999 Red Hat $675M XenSource Oct 2007 Citrix Systems $500M Jboss Jun 2006 Acquired by Red Hat $420M Springsource Aug 2009 Acquired by Vmware $362M Zimbra Sep 2007 Acquired by Yahoo! (and later by Vmware on 2010) $305M 15
- 16. Top 10 OSSVenture Dollars Raised 121 121 124 129 131 135 194 200 330 1041 0 200 400 600 800 1000 1200 SugarCRM Mirantis Joyent Kaltura MuleSoft MapR DataStax Hortonworks MongoDB Cloudera 16 Source: Tomasz Tunguz @ http://tomtunguz.com/open-source-software-environment/
- 17. Most Promising OpenSource Software Companies 17 Source: Black Duck – Open Source Rookies of The Year Company Description Appium Test Automation Framework For Mobile Applications Docker Enables developers to pack, ship, and run any application as a lightweight container Exercism Crowd-sourced code reviews on daily practice problems Ghost Publishing platform that is beautifully designed, easy to use, and free for everyone InfluxDB Distributed, Time Series, Events, and Metrics database with no external dependencies OpenDaylight Collaborative open source project that accelerates adoption of software-defined networking (sdn) and creates a solid foundation for network functions virtualization (nfv) OpenIoT Enables a new range of open, large-scale intelligent internet of things (iot) applications using a utility cloud computing delivery model Serverspec ServerSpec tests for your servers configured by puppet, chef, or anything else Tox Secure instant messaging, video conferencing, and more XPrivacy Prevents android-based applications from leaking privacy sensitive data and can restrict the categories of data applications can access
- 18. Pros and Consfor Software Producers 18
- 19. Pros and Consfor Software Producers • Marketing greater penetration • More likely to establish an industry standard and gain competitive advantage (especially in “infrastructure” domains – for example MySQL and Hortonworks) • Creates community and get free testing, free bug fixing, free users’ opinions • Promote the company’s image, reliability including its commercial products if exist • Helps build developer loyalty as developers feel empowered and have a sense of ownership of the end product 19 Source: Wikipedia Open Source Software
- 20. Pros and Consfor Software Producers • Complex business models • It’s a “less paved” road • Community as a double-edged sword • Can we go back? • Is it good for revenues? • Is it good for M&A/IPO 20 Source: Wikipedia Open Source Software
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- 22. “Free” Software 22 “According tothe Open Source Initiative, ‘free software’ and ‘open source software’ are interchangeable phrases. It’s just that the word ‘free,’ in this case, doesn’t mean ‘without cost.’ Instead, it has to do with being liberated from the traditional walls of proprietary solutions…” James White, Hongkiat
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- 24. Business Model/Strategy 1. ServicesModel The Company sells services – maintenance, support, training. The support can be priced per “buckets” (e.g., ElasticSearch) or as a subscription (e.g., Red Hat) 2. SaaS The open source project serves as a foundation for a SaaS offering. Customers pay per hosting, streaming, and delivery of the software. 3. Freemium Model / Commercial Plugins The company sells separately premium commercial add-ons, applications and modules (e.g., Jaspersoft, Joomla). Often, The company releases software under an open source license and sells premium features on top of it. 24
- 25. Business Model/Strategy –Cont. 4. Dual License The company releases the code under a standard commercial license and under an open source license. The open source serve as an up-sell to a commercial enterprise edition (e.g., MySQL) 5. Non-Profit Business Models Non-profit organizations which are not interested in making profits. Funding might come through donations, investments or crowdfunding. (e.g., MIT, Stanford, Technion) source: HONGKIAT 6. Mix-and-match The usage of any combination of the above. (e.g., Katura, 10gen) 25
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- 27. Investment In OpenSource Compamies 398 669 920 1300 0 500 1000 1500 2011 2012 2013 2014 $M Venture Investment in Open Source 27 Source: Black Duck (DowJones/VentureSource) 8 14 18 33.9 0 50 2011 2012 2013 2014 $M Average Deal Size
- 28. Andreessen Horowitz $100M, Jul2012. GitHub is a social network for programmers which allows collaboration by forking projects, sending and pulling requests, and monitoring development. $11.2 (total round), Jul 2012. Meteor is an open source platform for building web apps. Undisclosed Angel Round, Apr 2013. Open Coin develops the Ripple open source payment protocol. 28 Source: crunchbase, plivo, techcrunch
- 29. Andreessen Horowitz -Cont. $7.5M, Mar 2015. Tachyon is a memory-centric distributed storage system enabling reliable data sharing at memory- speed. It achieves high performance by leveraging lineage information and using memory aggressively. $1.7M, Aug 2013. Swiftype is building search software for the next generation of websites and applications. Founded by Quin Hoxie and Matt Riley in January of 2012, Swiftype is funded by YCombinator and other angels and VCs. $1.75 (total round), Dec 2012. offers Global SMS & Voice calls for businesses of all sizes. $5.8M, Mar 2012. Offers fast & simple mobile payments technology that aims to allow consumers to checkout from a mobile site or app in under five seconds with one-tap. 29 Source: CrunchBase, plivo, TechCrunch
- 30. Peter Fenton • ASuccessful open source investor • Currently a Partner at Benchmark Capital • Made successful Investments in many OSS Companies (for example): o Docker, Estimated value of $1B following 2014 investment round. o Hortonworks, Valued over $1B in NASDAQ o Software AG, Valued $2B in NASDAQ o Zimbra, Acquired by Yahoo! $350M 30 Source: Forbes, Bloomberg
- 31. Peter Fenton –Cont. Lately he also invested in: Cockroach Labs - Deveolps cockroachdb which enables developers to build scalable applications that can survive datacenter-scale outages effectively. Elasticsearch - Open source search and analytics engine makes real time data exploration Pentaho - Open source search and analytics engine makes real-time data exploration. Engine yard - leading cloud application management platform empowering developers and devops to provision, manage and monitor applications in the cloud. 31
- 32. Greylock Docker – openplatform that enables developers and system administrators to create distributed applications. $95M (total round) Famo.us – Open source JavaScript framework that enables developers to build beautiful apps with 3D physics-driven animation. $1.1M (total round) Cloudera – Enterprise software company that provides Apache Hadoop-based software and training to data-driven enterprises. $40M (total round) Typesafe is dedicated to helping developers build Reactive applications on the JVM. $14M (total round) 32 Source: CrunchBase
- 33. Accel Partners Weaveworks -Weave is an open source software project for containers and Docker especially. Total funding: $5M ForgeRock – ForgeRock provides solutions based on top quality open source software for companies and government organizations. $30M (total round) Couchbase - The developer of Couchbase Server, an open- source, NoSQL, document-oriented database optimized for interactive applications. $60M 33
- 34. Index Ventures 34 Minio –Minimal object storage server written in Golang and licensed under Apache license v2. Minio is compatible with Amazon S3 APIs. $3.3M Elastic – The company behind Elasticsearch, Logstash, and Kibana, three open source projects focused on scalability and ease-of-use that help you make sense of your data. $70M (total round) Pentaho – Open source search and analytics engine makes real-time data exploration. $40M OpenX – Open Source ad server, trusted by more than 30,000 web publishers in over 100 countries. $25M
- 35. New Enterprise Associates MongoDB - The next-generation database that helps businesses transform their industries by harnessing the power of data. $80M, Jan 2015 MapR Technologies - Provides an enterprise-grade, big data platform that supports mission-critical and real-time production uses. $80M, Jun 2014 IIX Inc. - The company's SDI platform enables programmable interconnection between networks that allow customers to improve security, reduce costs associated with IP transit delivery and optimize network performance. $10.4M Jul 2014 35 New Enterprise Associates is a global venture capital firm that invested in over 9 Open Source companies over the past few years.
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