5 ms·

Isn't it just consulting? How is it different from just offering dev services as a feeelance agency?

by usaphp 8y ago

TAForObvReasons 8y ago
It is, the open source project functions as marketing for your abilities to develop solutions in the space.
gk1 8y ago
Because you can build products around the open-source core. So then you are selling enterprise products, not services.
yesimahuman 8y ago
No, you are shipping and licensing a software product (like SaaS) and you’re not building custom solutions (in the general case), but you are backing it with support. Support is also not the same as consulting hours as you aren’t billing hourly for it and customers can only purchase it if they also pay for the software. It’s probably more like an insurance policy than anything (and should be high margin on its own) Support is tablestakes for B2B so this isn’t unique to OSS
- marpstar 8y ago
  Sounds like fixed-price consulting to me.
  - yesimahuman 8y ago
    No, it’s more like a SaaS model. Yearly subscription/license and you’re not doing bespoke development
  - krn 8y ago
    > Sounds like fixed-price consulting to me. Is there no difference between technical support and consulting? I see technical support as answering emails and picking up the phone when someone needs the help using your product. For instance, AWS Support Plans[1]. [1] https://aws.amazon.com/premiumsupport/plans/ https://aws.amazon.com/premiumsupport/plans/
    - yesimahuman 8y ago
      Yes there is s huge difference. One is a yearly subscription and the other is billed per-hour or is a set of consumable hours you buy one-off. Most teams don’t just sell support on its own, you only get it if you have a subscription to the software product behind it.
      - deleted 8y ago
        [deleted]
- capkutay 8y ago
  yeah what you're describing is almost a textbook example of enterprise services/consulting that companies like Oracle/IBM/HP have been doing for decades. and what you're describing was also debunked as a scalable core business model by many companies... https://a16z.com/2014/02/14/why-there-will-never-be-another-redhat-the-economics-of-open-source/ https://a16z.com/2014/02/14/why-there-will-never-be-another-...
  - yesimahuman 8y ago
    Actually our particular model is more like the OSS as a service he gets to at the end, but it’s unique to us and so my original comment was more broad strokes. A lot of the software our customers pay us for is _not_ open source but fits in with the open source in a really natural way (and we’re on the frontend/mobile). We also don’t see support standalone, you only get it in tandem with the software subscription. “Support” is a loaded term. Every B2B company has to have a team able to support their biggest customers and you’d be dumb to not charge extra for it. I don’t think the shape of our support is that much heavier than any B2B SaaS company today and our high gross margins just on support further prove that (but it’s not our core business). So far the model is scaling. Can it scale to be another public OSS success like red hat or mongo? We’d like to think so but we’ve got a long ways to go still on that.

Isn't it just consulting? How is it different from just offering dev services as a feeelance agency?

by usaphp 8y ago

Isn't it just consulting? How is it different from just offering dev services as a feeelance agency?

TAForObvReasons 8y ago

It is, the open source project functions as marketing for your abilities to develop solutions in the space.

gk1 8y ago

Because you can build products around the open-source core. So then you are selling enterprise products, not services.

yesimahuman 8y ago

No, you are shipping and licensing a software product (like SaaS) and you’re not building custom solutions (in the general case), but you are backing it with support. Support is also not the same as consulting hours as you aren’t billing hourly for it and customers can only purchase it if they also pay for the software. It’s probably more like an insurance policy than anything (and should be high margin on its own) Support is tablestakes for B2B so this isn’t unique to OSS

marpstar 8y ago
Sounds like fixed-price consulting to me.
- yesimahuman 8y ago
  No, it’s more like a SaaS model. Yearly subscription/license and you’re not doing bespoke development
- krn 8y ago
  > Sounds like fixed-price consulting to me. Is there no difference between technical support and consulting? I see technical support as answering emails and picking up the phone when someone needs the help using your product. For instance, AWS Support Plans[1]. [1] https://aws.amazon.com/premiumsupport/plans/ https://aws.amazon.com/premiumsupport/plans/
  - yesimahuman 8y ago
    Yes there is s huge difference. One is a yearly subscription and the other is billed per-hour or is a set of consumable hours you buy one-off. Most teams don’t just sell support on its own, you only get it if you have a subscription to the software product behind it.
    - deleted 8y ago
      [deleted]
capkutay 8y ago
yeah what you're describing is almost a textbook example of enterprise services/consulting that companies like Oracle/IBM/HP have been doing for decades. and what you're describing was also debunked as a scalable core business model by many companies... https://a16z.com/2014/02/14/why-there-will-never-be-another-redhat-the-economics-of-open-source/ https://a16z.com/2014/02/14/why-there-will-never-be-another-...
- yesimahuman 8y ago
  Actually our particular model is more like the OSS as a service he gets to at the end, but it’s unique to us and so my original comment was more broad strokes. A lot of the software our customers pay us for is _not_ open source but fits in with the open source in a really natural way (and we’re on the frontend/mobile). We also don’t see support standalone, you only get it in tandem with the software subscription. “Support” is a loaded term. Every B2B company has to have a team able to support their biggest customers and you’d be dumb to not charge extra for it. I don’t think the shape of our support is that much heavier than any B2B SaaS company today and our high gross margins just on support further prove that (but it’s not our core business). So far the model is scaling. Can it scale to be another public OSS success like red hat or mongo? We’d like to think so but we’ve got a long ways to go still on that.