Businesses that have built a commercial offering on open source software are well positioned to lure these developers in and then tempt them at a later point with premium features. It’s often developers and IT professionals who go searching for solutions to whatever problems they’re having, and open source tends to be top of mind for that target market. This also has a knock-on effect on companies’ go-to-market strategy. “The vast majority of open source projects aren’t meant to become businesses, so when you build a venture-backed business in open source, you can often become the leading open source player in a category through engineering investment and sustain that position as you scale.” “Unlike enterprise SaaS, there’s not yet a lot of competition in open core markets,” Tien explained. So how do open source software and open core business models address this, exactly? It all comes back to efficiency.
The main problem this creates, according to Tien, is that as investors plow more money into enterprise SaaS startups, the cost of customer acquisition “goes through the roof.” Everyone’s running ads on the same keywords, they use similar messaging, they go to the same conferences.” “Second is that enterprise SaaS go-to-market strategies are commoditized - marketing and sales motions eventually all look the same. “First is that product differentiation only lasts six to nine months before competitors in the space have effectively rivaled your new features - it’s difficult to create a moat,” he said. “Right now, the financial markets favor enterprise SaaS as a category, and you can see that through the validation multiples for the category,” Tien told VentureBeat, though he added that enterprise SaaS has two inherent challenges. And if a customer on a hosted enterprise plan is concerned about their data becoming locked into commercial software, they can “downgrade” to the open source Mattermost Team edition without losing any data.Īccording to Mattermost CEO and cofounder Ian Tien, the most powerful benefit of operating what is known as an “ open core” business model on top of an open source product is efficiency.
It also has a commercial self-managed free edition called Mattermost Enterprise Edition EO, which provides the added ability to upgrade to more feature-rich paid versions. Mattermost offers various plans covering most potential use cases, including its foundational free and open source Mattermost Team edition. The Palo Alto, California-based company has raised around $70 million since its inception and claims some major customers, including Samsung, SAP, Deloitte, Nasdaq, and BNP Paribas, with a typical “large enterprise deployment” of between 10,000 and 40,000 users. What matters mostįounded in 2015, Mattermost targets enterprises with various self-managed and hosted software-as-a-service (SaaS) options. Here we look at some of the open source “Slack alternatives” currently on the market and speak to the key movers and shakers behind them.
Companies that manage sensitive data, for example, might prefer to be in full control of all their information under a self-hosted option, not to mention enjoying the flexibility in terms of integrations and deployments. There are any number of reasons an enterprise might decide to explore communication software that adheres to a more open philosophy. Microsoft also went so far as to conclude that open source is now the accepted model for cross-company collaboration, as big technology companies often join forces to solve problems by investing resources in projects that benefit them all.Īt the intersection of these two trends are open source team collaboration tools.
As businesses have had to evolve and embrace digital transformation, open source code offers an easier conduit to scaling software, given that it saves companies the effort of starting from scratch and often gives them more flexibility to create a differentiated product. This is particularly true in the enterprise, by many accounts. Another key trend accelerated by the pandemic has been the rise of open source.