Building An Open Source ERP Company From Pamplona, Spain: OpenBravo CEO Paolo Juvara (Part 5)

Sramana: How did your revenue evolve? In 2007 and 2008 you were doing consulting to bring in revenue, correct?

Paolo Juvara: The company started in 2006 and did less than 500,000 euros. In 2007, the company did 1.5 million euros. Those revenues came from consulting, training, and support. The company’s revenue grew threefold during its first three years. Once we began acquiring partnership fees as a source of revenue, we were able to stop providing integration services. That transition year was a difficult year for us because our integration services revenue disappeared and our professional server revenues did not come as quickly as we had hoped, which resulted in our revenue dropping.

Sramana: What was your company’s core offering once you stopped offering integration services? Did you charge for premium features?

Paolo Juvara: We had to change the business model a number of times. Our first professional edition did not offer any real differentiation other than support. We found that model did not work in our space. The majority of our users did not feel it was necessary to pay for support.

We then decided to build enhanced administration and system management tools and made that available only in the professional edition of OpenBravo. That strategy worked, so we have continued down that path and now have even more features available in our professional edition. We also allow our partners to develop specific solutions that are tailored for certain sectors. Those specific solutions require the use of our professional edition.

Sramana: What types of professional solutions have been built using this model to date? What industry segments are attractive, and what kinds of partners have you been able to recruit?

Paolo Juvara: It varies a lot. Some of our partners are focused on services and are not interested in developing a specific commercial solution. We have other partners who are aggregators of open source solutions and their specialty is developing integration components. They develop tools to allow various open source projects to integrate with one another. We also have an increased number of specialists who go for very specific sectors, such as geographic sectors, or from business vertical perspectives. We have companies that use our solution to develop solutions for higher education, private schools, retail businesses, nonprofits, fashion manufacturers, food distribution, hospitality, and hospital management.

Sramana: Have you been able to get all of these commercial solution developer partners through SourceForge.net?

Paolo Juvara: We have outgrown SourceForge.net and now have our own repository, which we established in 2009.

Sramana: How much of your revenue today comes from those types of partnerships?

Paolo Juvara: Around a third. We get another third of our revenue from partnership fees for those who have developed solutions that they resell to others, and we get our remaining revenue by providing direct services to our developer partners.

This segment is part 5 in the series : Building An Open Source ERP Company From Pamplona, Spain: OpenBravo CEO Paolo Juvara
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