Cms marketplace
What is wrong with this picture? Brain teaser.

Comments

fgm (not verified):

Two things at least:

  1. Commercial and FLOSS are not disjoint categories. I guess that's the one you wanted to see mentioned ?
  2. Nothing allows one to think the internal revenue has been accounted for, but only the revenue resulting from licensing sales (in the case of dual-licensed products, if any exist in that space) and service sales directly bound to a CMS

To clarify the "internal" revenue notion, many organizations deploy a FLOSS CMS on their own, thus generating no initial revenue to the relevant community and its service-providing members. But most certainly expect a revenue from the CMS deployment. In that case the "internal" revenue, from an accounting standpoint, is the value of the amortizable investment, which is no less real than direct sales.

bertboerland (not verified):

Well, first of all "FLOSS" is not the opposite of "commercial" as noted above. Second: I am very interested to know where the revenue figures come from. They are not consistent with my experience.

As a provider doing everything from housing, hosting, building, designing and maintenance, it is our experience that there is more revenue in using open source products.

Given a limited/fixed budget at the customer/prospect side, making a site based upon "free" licenses gives the builder a bigger piece of the semi-fixed budget the customer has. So "revenue" has to be defined as well; for whom for what?

Dries:
  1. It obviously is a simplification of the CMS marketplace. It's naive to think that I'm trying to present an accurate model of that entire space. I'm merely trying to point out that this marketplace is unbalanced along, at least, two axes.
  2. We're not talking about products, we're talking about content management systems in specific. For other products (i.e. browsers, webservers or operating systems), this graph could look very different.
  3. I meant revenue for CMS implementors. If you're looking at this from the user's point of view (like the comments above seem to do), it should be labeled expenses. (I've updated the label on the graph to read "Revenue / expenses" instead of just "Revenue".)
  4. The figures are not based on one particular research report. They represent my view on the CMS marketplace, based on documents I've read, conferences I've attended, people I've talked to and so on. I'm asking the lazy web to validate or correct this graph, and specifically, the points it communicates. If this unbalance is real, I'm asking you to think about it and, say, to make a projection of what this graph will look like 10 years from now ...
fschaap (not verified):

Well, the obvious remark might be that regarding the install base the generated revenue for FLOSS CMSes is too small... until you realise that everyone and their monkey can install a FLOSS CMS for free and thus generates no revenue stream for any implementor, but do add to the installed base.

Next comes the question of how much of the revenue generated by commercial CMSes must necessarily be spend on R&D by those commercial parties, because they do not benefit from the cumulative effort of a well organised FLOSS community.

The question might not be as to how much revenue is generated, but how much profit is realised by an implementor who develops and deploys their own, closed source CMS, versus an implementor who contributes to and deploys a FLOSS CMS.

It might just be that the smaller revenue stream on the FLOSS CMS side points to a more effective 'method of production'. But it's probably more realistic to say that in many commercial/governmental companies/organisations, which is where the big money is made, commercial CMSes and traditional suppliers of closed source software are still very much entrenched. But, for how much longer?

Ken Rickard (not verified):

As Dries suggests above, to be truly accurate, there needs to be a third section showing how much revenue is generated by the users of the system.

Large enterprises using a commercial CMS may or may not make more money....

David Geilhufe (not verified):

I like the Harvard Business School four quadrant thing, but the issue is a little more complex, IMHO.

  1. Installed base is massive in FLOSS, relatively tiny in commercial CMSs.
  2. Revenue, I would argue is FAR, FAR, FAR larger in FLOSS than in commercial CMSs... you have to add up all the revenue from all the consulting firms, all the internal engineering projects, all the tiny hobby and small organization sites.
  3. Cash R&D/ Investment stemming from revenue is tiny in FLOSS compared to commercial models. Most of the R&D is coming as gifts of time from developers.

It is the disconnect between the huge installed base/ huge revenue and tiny R&D expenditure that is wrong with the picture.

We have the installed base. We have, as a community, the revenue. How do we encourage the community to allocate a larger percentage of their revenue to the maintenance, upkeep and continuous improvement of the underlying software?

The real issue is how do you effectively provide easy ways for a portion of that revenue to flow into R&D and maintenance?

Dries:

Revenue, I would argue is FAR, FAR, FAR larger in FLOSS than in commercial CMSes

Is this true? EMC makes 360 million USD a year with Documentum alone. OpenText made roughly 500 million USD last year. IBM acquired FileNet for 1.6 billion USD.

David Geilhufe (not verified):

This is one of those questions that is impossible to "answer" since we don't have data on Drupal community revenue. I will have to acquiesce to overstating the relative revenues now that I actually run the numbers.

But some points to think on:

  1. Not sure the comparison is with the largest CMS companies is really an apples and apples comparison. But lets go with it.
  2. Open Text's revenues in 2006 were $528M. That is 30.3% licensing, 47.8% support, 21.9% service. They invested 8% of revenue in R&D ($22M). The have 2,000 customers and employ 2,200 people in 2005.
  3. How do we figure out the same numbers for the Drupal community?
Steven Noels (not verified):

I find collapsing revenue and expenses into a single segment quantifier quite confusing, to be honest. And usually, such representations are used for Gartner's quadrant blabla, or for simple SWOT diagrams. The representation kind of obfuscates what you're trying to convey - hence my confusion.

Dries:

Simply put: expenses for clients are revenue for vendors. ;) Depending on whether you look at this from the client's or vendor's point of view, you should read it as expenses or revenue, respectively.

Either way, all I'm trying to do is tickle your brain, and to make it dump its thoughts in these comments. I'm not trying to draw an accurate or all-compassing picture. I'm trying to figure out whether you think such unbalance exists.

There are some additional clarifications in my comment above.

Steven Noels (not verified):

Well, it's hard to have an opinion on something I can't quite parse. :-)

That's the basic issue I have with the drawing, I guess: it's an opinion -- just that. Somebody would need to provide me with objective market data in order to convince me that there's any truth behind it. Not that I debate the basic idea behind it, it's just that I see it vastly oversimplifying an entire industry, mashed up with a few economic business models, and year balances of lots of different types of vendors, integrators and consultancy shops into a pretty, but simple picture.

Sorry! ;-)