Once More unto the Breach

SourceForge Acquires Ohloh!

First, congratulations to Scott Collison (Ohloh CEO) and the Ohloh team. [Caveat lector: I've been an advisor to them for some time.] It's a great exit for a great little company. As with all the companies I advise, there needs to be something unique going on. Ohloh has always been unique. As I described in January:

When a potential open source user wanted to find out "what open source software is available" to solve a problem, they were invariably left hunting across Google, SourceForge, and sites like java-source.net and FreshMeat. There was no consistency. The depth of information was sketchy. Some of it was bleeding edge software, some tied to the site. There was no sense of "what's good" unless you were already involved in a particular community, and even then community bias could get in the way. This gave way to a collection of directory solutions and companies that tried to bridge this gap.

Ohloh has always had the most useful and interesting directory for me. First, they have no direct sales model tied to the directory, so my trust in the depth and breadth of the information is high. Second, the beauty of the analysis is that the core data is metrics based on what programmers do, not what they say. I can see how big or small a community is, how long it's been around, how active it is, and this provides hard data when one then looks at the qualitative commentary. Third, it's always been comprehensive across the open source world and getting better all the time.

...

Over their several year history, they have continued to expand and add features to their core statistical analysis. They've built the community and expanded the number of repositories they support. Once one finds a project, one can see other projects immediately that are related through the tagging and stacking other Ohloh users share. The site is a proper social network for open source developers. It's been used to get a project manager's view of an open source project by the project's own leadership. As a resource for job hunters and recruiters it's invaluable to be able to see the visual resume of a developer. They've evolved their offerings to act as download host, and provide job and support services classifieds.

In one commentary, Jon Sobel (SourceForge group president of media) made reference to "Another advantage for SourceForge ... is that Ohloh's data will help the company deliver advertising that is more targeted and effective." This is the real key to the acquisition. A primary revenue driver for SourceForge is advertising across the forges and online media properties. Ohloh has been successfully developing a data service that would wildly improve the ability to target technology advertising and provide data rich feedback for high-tech marketing campaigns. [Frankly, Google should have acquired Ohloh.] They have a number of large corporate customers. So through this acquisition:

• Ohloh can improve SourceForge's advertising revenues.
• The Ohloh data service itself provides an excellent additional revenue stream in the high-tech corporate marketing world.
• The Ohloh community site is complementary to SourceForge's forges, providing open source communities better tools for understanding their projects.

This is a great acquisition for SourceForge. Hopefully along the way, the original and unique aspects of the directory that make it so valuable to open source users (as opposed to open source developers) are not destroyed or lost, and that SourceForge continues to recognize the difference between the core data competency Ohloh represents, the core value proposition to SourceForge's customers, and its complementary uses as a separate directory at strengthening the SourceForge brand in non-revenue producing ways.

Other commentary:

• The official press release
• Matt Asay's interview with Jon Sobel, SourceForge group president of media
• Ars Technica Article

Partner Programs and Open Source Software Businesses

I was discussing partner programs with colleagues the other day. Partner programs tend to need careful thought — much more than many young companies realize. The simplest summary I can offer is that partner programs aren't about marketing — they're about sales, which means they're about compensation plans and metrics aligned with those plans.

Four years ago when Optaros announced what it was doing (consulting services based on open source building blocks) many companies approached us to "be partners". This meant everything from at its most innocent "let's share leads and swap logos" all the way to "Optaros would be a great sales channel for our product." All this requires (a.) a lot of time, and (b.) needs to be tracked against revenue. As a channel, it needs management just like a company's sales team does, so you can figure out who is really performing and so as to get rid of the non-performers. We did sign several light weight partnerships (i.e. logo swap and a joint press release) in the first year because it gave us a press release with a high profile (i.e. newsworthy) partner. We expected nothing else from the partnership — no leads, no co-marketing, no co-sales. Some partners never called with leads despite promises and follow-up from us. They did, however, call to give us a hard time if they heard us using a competitor's project/product to solve a problem for our customers. Obviously our customers were more important to us and our revenue than the partners lack of leads/revenue. [To be clear, Optaros has strong partner management in place and developed a number of excellent partners over time with strong complementing business relationships.]

Aside from the day-to-day management, you also need to ensure there's no channel conflict. You will encounter problems with partners where their business development people may love you, but their sales force may never think of you because:

• You're not helping them meet their quota
• Worse, your product/service competes with the higher margin items they sell to make their quota
• They'll take a lead from you, but have no need to return the favour on their way to closing their quota. (Contrary to popular belief, they will not call you because they like you — they are sales people and there needs to be some bottom line benefit to calling you because otherwise you're taking away valuable time from them making their quota and "salesperson of the month/quarter/year" and the perks attendant on that title. These are highly competitive revenue-focused individuals. Good sales people in a channel conflict won't call because it wastes their time.)

Business development managers that don't sell for a living don't necessarily understand the channel conflict problem. They also might be compensated on something like "partner satisfaction" or "# partners signed", etc., rather than on revenue numbers. Not only that, if the partnership is one sided (they get sales, you don't) they still may not care. Partner programs aren't worth anything if the channel and compensation programs aren't well-aligned to mutual benefit.

Gaining visibility through partners is an interesting idea and a Big Name Partnership MAY help as a marquee sort of "partner" regardless of sales, but THEN you need to ensure you have a solid business development person on their side that will speak GLOWINGLY on your behalf to potential investors or act as a direct customer reference to close a deal. That's when they count. Otherwise, you're lost in a sea of all their partners. [Softway was a Microsoft partner back through the late 1990s before the acquisition. It was a fascinating relationship when it came to getting them to admit that they wanted to see UNIX/Linux applications running natively on Windows NT.]

I'm not saying don't set up a partner program — I'm saying set one up with your eyes wide open and with a realistic eye on the revenue that could otherwise be gained by (for example) hiring another sales person rather than a partner manager. Once you understand exactly how you want to make revenue directly for yourself, you can better determine how to organize a partner program (by region, by vertical, by function) such that your needs and your partners's needs and compensation are properly aligned and your partners trust you to not conflict.

Photo by Robert Scales