SaaS Hasn't Killed Open Source: Can Open Source Help SaaS Evolve?
by Kristin Shoemaker - Feb. 02, 2009Comments (4)- Related Blog Posts
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Ben Kepes at Cloud Ave. offers some interesting analysis of a question Yuuguu CEO Anish Kapoor recently tackled on his company's blog: Has software as a service (SaaS) killed open source as a business model?
The question raised, of course, is why these concepts are at odds at all -- why are they mutually exclusive? They aren't, per se (SaaS companies can -- and do -- offer their code under open licenses), but Kapoor imagines that for some companies, SaaS takes a bit of the shine from open source. Kepes counters that while this might be the case, SaaS has a fair bit to gain from the open source model.
At first glance, Kapoor's query seemed the technological equivalent of asking if the weather in Cairo yesterday would disrupt tomorrow's Boston to New York commuter train schedule, but he makes some reasonable arguments as to why a company might prefer a SaaS arrangement to becoming involved in a similar open source endeavor. Most of his points focus on the costs and technical skills required in making open source deployments work -- which are as likely to be relevant to one company as they are irrelevant to another.
Kapoor seems to infer that open source projects ("base code") offer applications -- completely across the board -- that are in some manner unfinished or require extensive customization to be useful. While customization needs vary depending on application and end-users, a generalization such as this is about as accurate as describing every last SaaS offering as "beautifully crafted" (though one would figure the services that are truly painful get tossed aside quickly). A company making the choice between an open source project managed in-house or a solution offered by a SaaS vendor has a lot of uniquely individual points to consider, and a perfect arrangement for one business can be a horror show for another.
Kapoor acknowledges that community is a crucial part of the open source effort, and Kepes picks up on this in his analysis. Kepes believes that SaaS companies should embrace the open source model of community, if not the business model (though he says that there's no reason why a SaaS company can't build a viable business this way). He says a sense of ownership, making the users feel special, and encouraging them to take a larger role in shaping the end product (something beyond the "beta invite") are open source style community cornerstones from which SaaS companies could greatly benefit.
I think Kepes makes some important points (and not just for the SaaS industry, but others as well) in regards to community, product loyalty, and a sense of ownership. I am not quite so sold on the idea of pitching your company (or project) as an underdog, and certainly not using that status as any sort of binding agent in the community. There are obvious areas this could backfire ("How do I know you'll be here in a month?") and the possibility of a company, its community -- and the rest of the world, watching it from afar -- misinterpreting the "scrappy and determined underdog" image with the inability to accurately assess business situations, or, worse, being cast as a victim.
So maybe the open source approach is more of a tactic than an out and out business model? And certainly, in some cases, it is better for a business to use a SaaS product rather than an in-house open source solution. These are not mutually exclusive ideas, and open SaaS applications have the still very potent selling point of visible source code behind them, even if they're being delivered through a third party, remote vendor. Kepes stresses the SaaS/OSS relationship is not one sided, nor is it solely about code licensing. Open source hasn't lost its luster by a longshot -- though sometimes it is valuable to consider its shine in slightly different lighting.
