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发表于 2005-7-28 17:55:39
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The Next Wave of Open Source:
Applications
Larry M. Augustin
CEO, Medsphere Systems Corporation
Director, Open Source Development Lab
Director, SugarCRM
Director, JBoss
Director, VA Software
Proprietary and Confidential. Copyright 2004 . Medsphere Systems Corporation. All rights reserved.
First we made games…
.
First we made games…
–
Adventure – 1977
–
Rogue – 1980
.
And people said, “Sure, they’ll make toys like games, but no one
will ever write something serious, like a compiler, for free.”
.
Then we made compilers…
–
gcc – 1987
–
And linkers and editors and other serious development tools
.
And people said, “Sure, they’ll make programming tools. After all,
they’re developers. But they’ll never make anything that requires
real work, like an operating system kernel.”
.
Then we made operating systems…
–
Linux -1991
–
386BSD -1992
.
And people said, “Sure, they’ll make a Unix-like operating system.
They studied how to in their computer science classes. But they’ll
never make anything for real users, like applications…
Proprietary and Confidential. Copyright 2004 . Medsphere Systems Corporation. All rights reserved.
So We Made Applications…
. The Next Wave of Open Source: Applications
. Examples
– SugarCRM: CRM
– Compiere: ERP
– Asterisk (Digium): PBX
– VISTA (Medsphere): EHR
. What do these applications have in common?
– 6 Rules for identifying applications that are ripe for Open Source
. Why now? Multiple drivers
– Developer interest: Fodder for the next wave
– Enterprise software model is broken
. What does an Open Source business look like?
– Business model for Open Source applications
. Conclusions
– Open Source applications are here to stay
– Open Source is a fundamental disruptor of enterprise software
Proprietary and Confidential. Copyright 2004 . Medsphere Systems Corporation. All rights reserved.
Example Application: SugarCRM
.
Customer Relationship
Management (CRM)
Software
.
Mozilla Public License
.
www.sugarcrm.com
.
SourceForge.net top 10
.
20,000+ downloads/mo
.
400,000+
pageviews/mo
Proprietary and Confidential. Copyright 2004 . Medsphere Systems Corporation. All rights reserved.
Example Application: Compiere
.
Enterprise Resource
Planning (ERP)
.
Mozilla Public License
.
www.compiere.org
. 800,000+ downloads
.
Proprietary and Confidential. Copyright 2004 . Medsphere Systems Corporation. All rights reserved.
50,000+ page views/mo
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
MySQL ERP PollSAPOracle ERPPeopleSoftCompiereBAANGreatPlains
Example Application: Asterisk (Digium)
.
Voice Over IP PBX
.
Company – Digium
.
GPL
.
www.digium.com,
www.asterisk.org
.
Over 130 Asterisk systems
vendors worldwide
Proprietary and Confidential. Copyright 2004 . Medsphere Systems Corporation. All rights reserved.
Example Application: VISTA (Medsphere)
.
Electronic Health Record
(EHR)/Clinical Information System
.
Veterans health Information
Systems and Technology
Architecture (VISTA)
.
Company – Medsphere
.
Public Domain
.
www.medsphere.com,
www.va.gov/vista
.
Over $2B investment by VA
.
200+ dedicated VA developers
.
Proven, complete, fully integrated
clinical system
Proprietary and Confidential. Copyright 2004 . Medsphere Systems Corporation. All rights reserved.
What do these applications have in common?
Proprietary and Confidential. Copyright 2004 . Medsphere Systems Corporation. All rights reserved.
#1 – Traditionally a Big, Expensive, Heavy
Application
. SugarCRM
– CRM
. Compiere
– ERP
. Asterisk (Digium)
– PBX
. VISTA (Medsphere)
– EHR
Opportunity for market disruption
Proprietary and Confidential. Copyright 2004 . Medsphere Systems Corporation. All rights reserved.
#2 – Big, Traditional, Proprietary Competition
. SugarCRM
– Siebel
– Oracle
. Compiere
– SAP
– Oracle
. Asterisk (Digium)
– Nortel
– Siemens
– Avaya
. VISTA (Medsphere)
– Cerner
– McKesson
Vulnerable competition
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#3 – Large, Enthusiastic Free User Base
. SugarCRM
– 20,000+ downloads/month
– 400,000+ pageviews/month
. Compiere
– 800,000+ downloads
– Ranked ahead of BAAN, GreatPlains in MySQL ERP survey
. Asterisk (Digium)
– 250+ attendees at Astricon 2004 in Atlanta
. VISTA (Medsphere)
– Used daily at 1,300+ facilities
– 200,000+ users
– 85% of all US trained physicians have used the system
Sales leverage
Proprietary and Confidential. Copyright 2004 . Medsphere Systems Corporation. All rights reserved.
#4 –Enthusiastic Developer Ecosystem
.
SugarCRM
–
SourceForge.net top 10 project
–
25 related projects on SugarForge
.
Compiere
–
SourceForge.net top 10 project
–
50+ Compiere partners worldwide
.
Asterisk (Digium)
–
Asterisk developers mailing list > 30 messages/day
–
Over 55 Asterisk systems vendors in North America alone
.
VISTA (Medsphere)
–
VISTA Software Alliance Corporate members include HP, SAIC,
Perot Systems, IDX, others
–
200+ dedicated developers within VA
Development leverage
Proprietary and Confidential. Copyright 2004 . Medsphere Systems Corporation. All rights reserved.
#5 – Big Enterprise Market Opportunity
. SugarCRM
– CRM is $2.2B license revenue market today
. Compiere
– ERP is $5.4B license revenues and $19.7B overall
. Asterisk (Digium)
– VoIP growing to $6B by 2008
. VISTA (Medsphere)
– 5,800 hospitals in US, growing to $25B IT market by 2007
Up-market opportunity
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#6 – Big, Under-Penetrated SMB Market
Opportunity
. SugarCRM
– $1B SMB CRM market size today
– 28M+ customer facing employees, 1% market penetration
. Compiere
– 4.2M SMB businesses in US
. Asterisk (Digium)
– Estimated 1M businesses will use VoIP PBX by 2008
– $4.5B revenue opportunity
. VISTA (Medsphere)
– Estimated 2,300 hospitals < 400 beds
– Less than 3.5% of hospitals do computer physician order entry
– $1.8B+ recurring revenue opportunity
Market entry below competition
Proprietary and Confidential. Copyright 2004 . Medsphere Systems Corporation. All rights reserved.
Summary
1. Traditionally a big, expensive, heavy application with long,
slow and expensive sales cycles.
2. Big traditional competition addicted to enterprise sales
model.
3. Large, enthusiastic free user base to build on.
4. Enthusiastic developer ecosystem.
5. Large, established Enterprise market opportunity.
6. Large, under-penetrated SMB market opportunity.
Proprietary and Confidential. Copyright 2004 . Medsphere Systems Corporation. All rights reserved.
Why now?
Proprietary and Confidential. Copyright 2004 . Medsphere Systems Corporation. All rights reserved.
Fodder for the Next Wave of Developers
. Each generation of developers needs new challenges
. Each generation of developers builds on prior work
. It takes 5 to 7 years for a project to mature
. A developer generation is 5 to 7 years
. 1970 to 2000 == about 4 generations of developers
. What will the next generation of developers work on?
Proprietary and Confidential. Copyright 2004 . Medsphere Systems Corporation. All rights reserved.
Enterprise Software Model is Broken
.
Enterprise software today
–
Long sales cycles
–
Expensive
–
Inaccessible to SMB
–
Inaccessible to small developers
–
Disconnect between license cost
and manufacturing cost
.
76% of New license revenue
today goes to sales and
marketing1
.
We are charging customers (a
lot!) to convince them they need
our software!
1 Source: Goldman Sachs
Proprietary and Confidential. Copyright 2004 . Medsphere Systems Corporation. All rights reserved.
What does an Open Source applications
business look like?
Proprietary and Confidential. Copyright 2004 . Medsphere Systems Corporation. All rights reserved.
The Open Source Promise
.
Reduce sales and marketing costs
–
Free try before you buy model
–
No expensive pilot
–
No evangelical sale: potential customers are already users
–
Sell enterprise software more like we sell small business
software
–
Let the user come to us!
.
Reduce development costs
–
Still do most of the development work
–
Leverage Open Source for testing, edge cases, interfaces, etc.
.
Open Source results in a fundamental business model
advantage
Proprietary and Confidential. Copyright 2004 . Medsphere Systems Corporation. All rights reserved.
Example: Siebel Meets Open Source
Siebel Proprietary Siebel Open Source
Revenue
Software license $487,127 36.4% $0 0.0%
Maintenance $469,751 35.1% $469,751 55.1%
Professional Services $382,915 28.6% $382,915 44.9%
Total Revenue $1,339,793 100.0% $852,666 100.0%
Cost of Revenue
Software license $13,316 1.0% $13,316 1.6%
Maintenance $0 0.0% $0 0.0%
Professional Services $443,585 33.1% $443,585 52.0%
Total Cost of Revenue $456,901 34.1% $456,901 53.6%
Gross Profit $882,892 65.9% $395,765 46.4%
Expenses
R&D $299,051 22.3% $149,526 17.5%
S&M $337,690 25.2% $84,423 9.9%
G&A $104,541 7.8% $66,508 7.8%
Total Expenses $741,282 55.3% $300,456 35.2%
EBITDA $141,610 10.6% $95,309 11.2%
Proprietary and Confidential. Copyright 2004 . Medsphere Systems Corporation. All rights reserved.
Did we just shrink the market? No!
Proprietary and Confidential. Copyright 2004 . Medsphere Systems Corporation. All rights reserved.
Broader Market Availability
. Lower cost means broader market availability
. Lower cost grows overall market
. CRM
– 1% market penetration today among potential users
– 100x growth opportunity
. EHR
– 3.5% of physicians use computerized order entry today
– huge growth opportunity
Proprietary and Confidential. Copyright 2004 . Medsphere Systems Corporation. All rights reserved.
So what did we learn?
Proprietary and Confidential. Copyright 2004 . Medsphere Systems Corporation. All rights reserved.
Open Source Advantages -Summary
Proprietary Open Source
Sales cycle Long Short
Pilot Yes Do it yourself
Enterprise ready Yes Nearly
Install time Long (months) Short (weeks)
Large up-front license Yes No
Developer community Small Large/Open
Proprietary and Confidential. Copyright 2004 . Medsphere Systems Corporation. All rights reserved.
The Next Big Thing? Look Down Market!
. Look for
– Enterprise applications
. With
– Long sales cycle
– Long installation time
– Inability to go down market
. For which there is
– A large SMB market demand
Proprietary and Confidential. Copyright 2004 . Medsphere Systems Corporation. All rights reserved.
Thank you.
Larry M. Augustin
CEO, Medsphere Systems Corporation
larry.augustin@medsphere.com
Proprietary and Confidential. Copyright 2004 . Medsphere Systems Corporation. All rights reserved. |
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