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[Conference 2018] Making Open Source Work


#9

Hello, I recently started to follow this great project and as a service provider, i’m considering to make some money out of it, by customizing it and selling it to customers. It seems that a lot have changed since you first wrote this article: https://frappe.io/blog/community/how-to-build-a-sustainable-erpnext-business, where i could interpret that there’s nothing wrong with selling the software. As a service provider, I can tell you that you are right by saying that most customers are unlikely to implement an ERP by themselves and much less if it is an Open Source ERP. So I think you should create a plan or membership with premium support, implementation & customization services, aimed at the folks who are making money out of it, which happens to be the service providers. If it is reasonably and somehow proportional in it’s price, to the earnings we make, I would be more than happy to enroll to this product.


#10

@jai_kejriwal I think we must look beyond Frappe. Why should Frappe make money to create value for everyone? The community should be independent and responsible for its own health and future. Those who are invested must be open to “donate” not get a service!

@Pawan appreciate your thoughts! But how many of us actually contribute money to say Python or Linux or mariadb and many of the libs we use? Agree about a clear roadmap. Already working on one, since it seems no one else is up to taking this up.

@dhananjay @snv I agree we must look at all options. Maybe a bold statement here on discuss too :sweat_smile:


#11

Yes memberships are one option (we already have them). But the money we raise barely covers the effort needed. We need 10x of our current income.


#12

@rmehta I was not talking about what’s right or wrong. On that front, I am aligned with your thinking. Practically, however, I believe there will be a path to getting where we want to be and a strong, fast-growing, money-making Frappe will keep things moving in the right direction. Simultaneously, the foundation has to brainstorm how it can be a revenue generating machine which means it’s got to build revenue-oriented service models of its own. And lastly, we all have to ideate about fund raising to make a substantial corpus for the foundation. Off the top of my head, Make in India, Incubators, Crowdfunding, Approaching HNIs etc. Come to mind. However, a coordinated strategy needs to be put in place for fund-raising. I’m happy to take a jab at starting a document for this.


#13

It depends on person to person or company to company is all I can say about this. Hence, I said it is a moral pledge you can take to give back but it is not necessarily binding on anyone.


#14

@rmehta please look at LiveCode’s business model (https://livecode.com/). One thing that they have implement is raising fund for developing a particular feature.

I also liked this article of a Norwegians software developer (https://jonlennartaasenden.wordpress.com/2018/09/06/hexlicense-patreon-and-all-that/). He is using Patreon (https://www.patreon.com/) for funding.

Personally a better option is to use SaaS. But from my experience I can say that no business will be able to use ERPNext out of the box. Almost all businesses require customization of varying proportions. So if you give SaaS based access to latest version of ERPNext then it is written in stone that the user cannot customize ERPNext as per their requirements. This will deter users from going for it…

Regards,

Yogesh


Absence and salary
#15

I am following this type of discussion on financial sustainability covering the period that the number of paying customers went from less then 100 to the actual 600…and the number of Frappe staff (Webnotes Technologies in those days) grew from 6 to some 15…

This resulted in many experiments but so far none has been an overwhelming success.
And over the years may people, including myself, aired there opinion…also not yielding the right answer.

Accepting that @arikfr bases this statement on his experience building an OS based software company I am wasting my time :slight_smile:

I find it quite difficult following ErpNext to find clear strategies in their development path and in their search for a financial sustainable model. It leaves the impression of ad hoc and trial and error actions. Saying this I also realize that I do not have the inside knowledge Frappe staff has, and can they vary well justify their actions.

Let me express a few observations:

There has never been a concerted, structural, long-term/sustained effort to really understand the needs of the customer base in terms of technical functionality, service requirement, deployment, configuration. The information what the user wants is passed to Frappe thru this platform, direct mails and/or discussions, the user conferences, during demo sessions and so on. I believe there are ample IT solutions to address this. In the present model it are the loudest voices who set direction…not the majority.

If I study the four (4) points @rmehta is making in this thread I feel there is some kind of mismatch between these statements and the development path of ErpNext. V11 has many options only interesting for larger companies: Shareholders, Multi-Companies and so on. This observation is actually confirmed by @umair in the first line of his latest (aug18) Blog "In last few months, we at Frappe received decent traction from the large enterprises. " Large companies are for various reasons not so much interested in cloud subscriptions offered by Frappe…and as a consequence one may question how far the developments targeting the needs of larger companies actually contributes to the profitability of Frappe… As stated by Rushabh “A lot of service providers make money on ERPNext, but not all give back, so it feels unfair for Frappe to do all the charity, while others make money…”

Maybe Frappe should consolidate the rapid developments of new functionalities for a while…and fully concentrate on money generating activities…that is the SAAS users. What are their needs in terms of functionalities, service level, willingness to pay , what are the constraints to subscribe to SAAS and so on…


#16

If foundation memberships are a significant piece of ERPNext’s model of financial sustainability, I think it would be both helpful and strategic if there were a fair bit more information on erpnext.org about what foundation membership actually looks like. What does it involve, and what are the benefits? How does the foundation influence the direction of ERPNext development? Is any of that spelled out anywhere?


#17

“Is any of that spelled out anywhere?”

Where to look for that is Community Foundation as per the screenshot


#18

Thanks @clarkej. In reality, though, even after browsing through many of the forum posts that come up in those categories, the structure, function, and strategic scope of the foundation is still not entirely clear to me. I might just be missing it. In any case, I suspect that a more consolidated and more explicit statement of the foundation’s role would help those not already active members of the community evaluate the benefits of joining.

The Mozilla foundation’s page strikes me as a particularly good example of how an open source foundation can define itself.


#19

@becht_robert thanks for sharing your views. You have seen us for a long time. I am also observing how this discussion is tending towards, how can Frappe make more money. I would like to argue that this is the wrong approach.

Maybe the reason we don’t make a lot of money at Frappe is because we are not sure if we are a charitable company or a profit making one. This has led me to the conclusion that it is time, we at Frappe stop thinking ourselves as a charitable organisation and put our energies in building a profitable services and hosting business. That does not mean we stop volunteering. It means we continue “volunteering”, and stop taking “responsibility” for everything.

That brings us to the foundation. I was wrong about the foundation being a community-led entity. Unlike Frappe, most service providers in the community have clear vision that they are here to make money. So it was naive to assume that they will bring some leadership here.

The way forward will be that we will be “moving” a whole bunch of Frappe ops that are related with supporting the open source project, and raise independent funds for it. We would still love community volunteers for the foundation, but we won’t depend on them for going forward.

@anon-forker, already posted that we are working on a clear roadmap and vision.


#20

Great! I wasn’t talking about a roadmap but rather a simple description of what the foundation is and how it operates, but if that’s included in the roadmap you’re talking about I’m glad that it’s a priority. I think it will be a big help to attracting more involvement.

I’d argue that this is a false opposition. With the exception of Wikimedia, perhaps, I can’t think of a single FOSS foundation that doesn’t have substantial support and leadership from for-profit companies. There’s no contradiction to that. Supporting open source is often just smart business.

If the foundation isn’t getting the support it needs from service providers, I hope you’ll reach out to see why not. In many other projects I’ve used, business support companies are a major source of manpower, code, and cash.


#21

You may find this https://erpnext.org/blog/general/objectives-of-the-foundation helpful.


#22

I suggest Partner / Channel model. No need to reinvent the wheel. This works because partners get a plus when saying they are a certified partner - and you get recurrent income. They get training and pre-sales assistance which is familiar to what larger companies offer. There are already so many partners delivering ERPNext - there is potential.

Something like…

  • ERPNext Reseller $500/year
    benefit: online training/certification. requirement: 1 customer/year, 1 certified resource

  • ERPNext Silver Partner $1,000/year
    benefits: xx hours support, online training, pre sales consulting/assistance, 10% discount on customisation services
    requirement: 3 customers/year, 1 technical resource, 1 sales resource

  • ERPNext Gold Partner $2,000/year
    benefits: xx hours support, online training, pre sales consulting/assistance, 10% discount on customisation services
    requirement: 3 customers/year, 1 technical resource, 1 sales resource


#25

The question is who will provide the services? Open source projects should be supported by grants and donations (like Mozilla, Wikipedia etc) and not services.


#26

I do think this is the right approach, practically, for ERPNext. I believe Frappe MUST NOT think of itself as a charitable organisation. I think this also means prioritising development by Frappe on features which may help it land high revenue customers and not “community” needs. Community features should be prioritised and paid for either by the foundation and/or pull requests by SPs.


#27

@rmehta Frappe leading foundation is the most realizable one at least for next few years.
Rushab and his team are the best bet for leading the foundation.
Community participation towards development and foundation will be substantial only when a service provider adds the kind of value to ERPNext like Frappe has added over the years.
Possibly at that time service providers will be vying for Foundation leadership as opposed to current scenario where participation has had to be coerced.
Till such a time service providers and users need to generously fund the foundation.


#28

I think a partnering program on the medium term, where you get more access to resources, and also pay for it. Models like odoo also depends on the referrals of partner to their enterprise version, more referrals, the further you go up the partnering level (silver, gold …etc.), and also get money. This would also motivate more partners to do referrals to ERPNext hosting instead of self hosting.

Maybe better for bigger projects, more hands on and support for the implementing partner for a price of course.

I think partnering and working on partnering programs that gives more incentive to bring enterprises and companies that work with ERPNext to work with the foundation would be a key discussion.

I still love this product :slight_smile:


#29

Are you referring to something like this: https://erpnext.com/reseller


#30

Yes, I know the resellers program, but it needs severe renovation. e.g. better representation of contributions and partners, better exposure of partners, better gamification engine, although this is more like enterprise more than a foundation.