20-Year Journey of a Fat Startup with Major Pivots: Scott Sellers, CEO of Azul (Part 6)

Sramana Mitra: The open-source was a commercial open source business model where the free product was lead generating for a subscription-based offering?

Scott Sellers: Right. We still have free downloads of the open-source software. We encourage people to use it in an unrestricted manner. The business monetization model is selling commercial support services, which include the obvious thing of answering the phones. More importantly, it’s things like timely security updates and long-term access to builds.

Sramana Mitra: How big a business did the open-source become?

Scott Sellers: It continues to be a big part of our business. We’re not quite at a $100 million but we’re getting there. The open-source product represents a good portion of that.

Sramana Mitra: Can you talk a little bit more about the go-to-market strategy of that open source product?

Scott Sellers: When we talk about the product and go to market for that, we didn’t reinvent the wheel. There are tried and true ways of going about this. It comes down to showing an unwavering commitment to open source. Companies that dabble in open source or pretend they’re open source, that’s a recipe for failure. In our world, there’s a massive Java community called OpenJDK.

By being very involved in the open-source community of Java and participating significantly in the OpenJDK project, you have to do that to build the credibility and expertise to offer commercial support services. First and foremost, being an expert in Java, building a reputation in the community, and always offering a free pure open-source version of the product are foundational elements in terms of being successful in open source.

We’ve got a tremendous track record in this. Customers can always come to our website and they always have access to the open-source. We have a tremendous track record in terms of timely updates when security issues come up. What does that build for you? Over time, it builds hundreds of millions of downloads of the product.

Zulu is now called Platform Core. It’s got hundreds of millions of computers, devices, and cloud instances. It’s been extremely well-received. That creates all sorts of benefits for us. It creates the potential for us to engage with its users to see if they need commercial support offerings. It creates awareness about Azul. It furthers our reputation as a leader in the Java space.

The way we monetize it is by selling subscription-based support services. It’s really more support and maintenance that enterprise customers pay for. You would ask why would someone pay for it. There are several things why. The number one benefit is, for compliance users, customers have to have support for any software that they use.

Secondly, assurance. Things do go wrong. Waiting for the open-source community to fix something is not a very good strategy. Especially in the world of open-source software, license contamination can be a very real issue. The code that Java is based on is GPL. GPL is a contaminating license. If you run on GPL, you might contaminate your software and have to release that in open-source form.

That gives customers great concern. What is my certainty that my software is not going to be contaminated? Part of the open-source support that we provide for our customers is the assurance that the builds of our open source products have been rigorously tested to absolutely ensure that there is a barrier between the underlying GPL code and their code to ensure that there is no license contamination.

Then there are other aspects of 10-year access to builds of the product. Once an application gets deployed, it runs for a very long time. Often it’s not easy to upgrade to newer versions.

This segment is part 6 in the series : 20-Year Journey of a Fat Startup with Major Pivots: Scott Sellers, CEO of Azul
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