Why use downloads as an indicator of OSS success?

Brett Shoemaker — Wed, 13 Feb 2008 17:31:00 GMT

I continue to be surprised by the amount of weight given to downloads as a metric for OSS success. A topic Matt Asay also touched on recently over at The Open Road. Like Matt, I’m talking OSS at the product or company level (i.e., not OSS projects) and by success I mean sales.

For me, a high number of downloads only signals that people are willing to trial a product. Downloads do not equal actual use of the product, and trial is a far cry from success. If we take it as a given that consumers see value in the product, the company still has to convert those downloads into paying customers, and this challenge is where the problems of using downloads as an indicator of success become apparent.

The first problem is that not all downloads are created equal. If downloads are from commercial buyers who want to “try before they buy,” then increasing downloads is a good thing, whether open source or not (e.g., Microsoft’s Express Editions). However, if one’s downloads are largely by enthusiasts where no procurement channel exists, then the value of those downloads, beyond possibly generating demand for the product from the bottom up, is minimal when one is going after IT leaders who buy commercial products. It is the conversions that matter, and not the downloads.

Now, I realize that number of downloads will continue to receive attention as an indicator of success in open source. It is an easy metric to track, and while a less-is-more argument can be made in specific cases, I would rather see more downloads than not. That said, total downloads is still misleading.

Different products have different potential market sizes, so total downloads cannot be used to make comparisons across a number of products. Total downloads simply doesn’t provide a robust enough picture. It is the equivalent of saying that Company X is successful solely because it generates $250 million in revenue. Revenue doesn’t tell you anything about profitability, share, or rate of growth. Company X could be unprofitable with revenues declining at a rate of 20% a year. Revenue, like total downloads, is only part of the picture.

Sure, total downloads is worth knowing, but I am more interested the patterns and trends of those downloads. Are they steady/growing/declining? To what degree do they coincide with release dates? Etc. It is this second level of detail that starts to tell you whether a project is successful, not total downloads.

Hitting those total download plateaus, whether it be 25,000/month or 1,000,000 overall, is a great opportunity from a marketing standpoint to generate press and interest, but it doesn’t tell you whether or not an OSS product is successful or not. It’s just a small part of the equation.

Does selling mean selling out?

Brett Shoemaker — Fri, 01 Feb 2008 23:51:00 GMT

As an open source business strategy lead here at Microsoft, I am particularly interested in community reaction following acquisition waves like the one we have seen recently (Sun/MySQL, Nokia/Trolltech, SpringSource/Covalent, etc.). While I am interested in reaction to each announcement individually, I find those that attempt to extrapolate what the event says about the broader OSS landscape especially interesting. This time around, one question that keeps surfacing is whether open source companies have sold out. Put differently, does selling mean selling out? My answer is no.

First, let me quickly point out the obvious. This recent wave of open source acquisitions is nothing new. Over the last 3 years, we have seen a number of open source companies sell to traditional ones (e.g., Zimbra to Yahoo, XenSource to Citrix, Gluecode to IBM). There is also a continuum of “ownership” and participation at the project level as well from company-driven to community-driven projects (e.g., from IBM’s influence over Geronimo to Zend’s PHP involvement to community-driven projects on Sourceforge or CodePlex). And, there is a continuum of opinion on it.

When I hear the question raised of whether open source companies are selling out, my reaction is “Why should OSS companies be held to a different standard than that of traditional ones?” What I mean is that I expect companies, whether open source or not, to do what is in the best interest of their customers and provides the best opportunity for future growth. The question should not be are OSS companies selling out, but rather are OSS companies selling to the right companies and in what ways will it further the company’s purpose.

Furthermore, the approach that an OSS company takes—IPO, acquisition, VC backing, or go-at-it-alone—doesn’t particularly matter. Today, we see more acquisitions and not IPOs because these traditional companies place higher valuations on these OSS companies than the market does. While the market focuses more on revenues, these traditional companies price in other variables (competitive impact, benefits to existing complementary offerings, etc.).

Does this acquisition trend mean that the terms open and closed source will no longer be relevant in the future? Maybe. Maybe not. To me, it’s minutia compared to the overall trend. I expect to continue to see convergence between the traditional and open source business models, and I expect to see Microsoft and other traditionally proprietary companies’ involvement continue to grow, as it is in the best interest of customers, partners, and shareholders. The heterogeneity of the technology landscape will continue to grow and consist of multiple source approaches so as to deliver the most value to customers. So, for me, this wave of acquisitions is nothing more than the next logical step on that path, and I’m excited to be a part of figuring out those next steps.

Port 25: The Open Source Community at Microsoft : Brett Shoemaker, Open Source

Why use downloads as an indicator of OSS success?

Does selling mean selling out?