Business development: the Alfresco approach

Two weeks ago I attended John Powell’s speech, you might have a look at his presentation by the Italian SourceSense website. Alfresco is a company founded by by John Newton, co-founder of Documentum and John Powell, formerly from Business Objects and its investors include leading investment firms as Accel Partners and Mayfield Fund. Alfresco tagline “the leading open source alternative for enterprise content management” summarize Alfresco’s strategy: forging inside and delivering VAS services and maintenance.

Alfresco reduced drammatically marketing costs because there is no need for evangelic sale since potential users are already users.

It’s true, commercial off-the-shelf (COTS) open source software is found by users, but as seen with MySql is not trivial to turn them into customers. Luckily Enterprise Content Management is more complex than DBMS, and customers need subscription based support and value added services, therefore VC are happy to invest.

About marketing Powell reported proprietary vendors expenditure for marketing and sales about 76% of new license revenues, and he added that

buying proprietary software you’re paying for a sales guy.

But cutting cost of sales of two or four times sounds a bit difficult, and I’m looking forward to read Alfresco’s 2006 annual report to figure it out.

About production costs Powell said Alfresco benefits from community involvment, and I think it would be interesting to know more about it, may be getting analyzed by FLOSSMETRICS, a European funded project analysing OS software projects to collect complete information about the development process, its productivity and the quality of its results.
Alfresco’s story it’s really interesting, here some reasons:

  • they did choose a promising market (estimated 3.9b$ where RDMBS is about 10b$);
  • they have choosen mature OSS infrastructure components;
  • they hired developers from Documentum and Interwoven teams;
  • they are running a very strong and wide partnership program;
  • they understood the importance of benchmarking and stack-assurance;
  • they pay attention to standards, ODF included;
  • they do agree that user interface matters.

Matt Asay, Alfresco VP Business Development, has an interesting blog, and I keep it in my blogroll.