We just finished the first Europe Open Source Think Tank (OSTT). Andrew Aitken of Olliance and Alexandre Zapolsky of Linagora hosted a fantastic event. I highly recommend it to anyone who can attend.

During the course of the two days a common theme I heard repeatedly was the difference between commercial Open Source businesses in Europe versus in the US. The differences are best illustrated by examining different views on a number of concepts. This isn’t a scientific survey, but reflects opinions I heard consistently from multiple people over the two days of the conference:

Concept/Idea European View United States View Primary reason for adopting Open Source. Avoid vendor lock-in. Cost. Key driver of commercial Open Source business creation. Creation of a local software industry. Venture capital/entrepreneur driven to create a big business and make money for investors. Dual licensing business models. Not true open source. Proprietary business models using Open Source for PR and marketing. Widely accepted as the most common Open Source business model. Software sales model. Channel oriented: VARs and SIs. Direct. Open Source business models. Service and support subscription focused; 100% open source software. US companies don’t want to be in the services business. The focus is on products, typically proprietary add-ons or an Enterprise Edition paired with an Open Source product edition. Expectations around "Open Source" products. All code is available under Open Source. There is often a community governance of community participation model. Same, but not necessarily all products are available under an Open Source license. Commercially licensed versions of the products are commonly available. Projects are managed by a commercial vendor.

Let’s explore each of these in a bit more detail.

Primary reason for adopting Open Source.

The week prior to the OSTT I spent a few days with senior IT people from the financial services industry in New York. The last two OSTTs in Napa both featured CIO panels. In all three cases I heard a common theme that the primary driving factor for their adoption of Open Source was cost. Likewise The451 Group did a survey of CIOs regarding Open Source adoption and identified cost as their primary reason for selecting an Open Source alternative. That’s in stark contrast to what I heard this week at the Europe OSTT. Cost is still important, but the Open Source nature of the software is more important; specifically, the ability to have multiple vendors (avoiding vendor lock-in) and the ability to influence and support the direction of the project.

Key driver of commercial Open Source business creation.

I’m somewhat biased living in Silicon Valley at the center of the information technology Venture Capital business, but in the US we are definitely driven to create Open Source businesses with venture capital. The US has a large and successful existing proprietary software business. Our motivation in the US is to build the next generation of software companies. But in Europe that’s not the case. Here there is a natural desire to build a local software economy and Open Source offers that opportunity. That’s a major motivating factor in the adoption of Open Source.

Dual licensing business models.

Business models based on dual licensing (either relicensing Open Source code under a commercial license or selling a commercial version of an Open Source project with added features) have become commonplace in the US. I definitely heard from the European attendees at the OSTT that there’s a negative reaction among European customers to those models. This contrasts with the US CIOs I talked with last week who were definitely more comfortable with getting their Open Source software from a vendor with a commercial license.

Software sales model.

Commercial Open Source in the US has relied heavily on an ability to disintermediate the software selling process and go direct to the buyers. Interestingly enough that doesn’t appear to have happened in Europe. Here the buyers still seem to acquire software predominantly through VARs and SIs. The direct model does not seem to be as widely accepted here. Perhaps it’s because the VARs and SIs in Europe are more heavily invested in Open Source than they are in the US.

Open Source business models.

Support and service subscription models clearly dominated the thinking among the Europeans here at OSTT. This contrasts with our thinking in the US that services models are not scalable and that the models should be product based.

Expectations around "Open Source" products.

The bar for Open Source companies is clearly higher in Europe than in the US. That is, expectations are that if a company is primarily an Open Source vendor that 100% of their software is available under an Open Source license. Further, that there is some community model or interaction model that allows a customer to participate in guiding the direction of the software.

Conclusions.

I’ve said this many times: Europe and most of the rest of the world is ahead of the US in Open Source adoption. This has been the case since I started tracking Linux usage numbers by country in the mid to late 90s. I believe the attitude differences I observed at this OSTT reflect a more sophisticated view of Open Source than we have today in the US. In the US the Open Source nature of the software is almost irrelevant to a company’s buying decision. The US buyers want better, cheaper software and a better relationship with vendors; all of which Open Source helps create for them. But they are not so interested in the source code itself nor in how access to the code created those benefits.

I believe the European Open Source software community has moved beyond that. The European community sees those benefits, but in addition recognizes that the Open Source nature of the code is the driving factor behind those benefits. As a result they have embraced Open Source to a degree the US market has not; insisting in many cases on acquiring the software under an open source license, not an alternative commercial license. It’s great to see this level of sophistication among the commercial Open Source community in Europe, and I have hope that eventually the US market will catch up.