 All right, I am thrilled to be here today. We only have 30 minutes to discuss this, and so I'm probably going to be speaking a little bit quickly because there is just a lot to cover. But however, despite the fact that we have a lot of things to go over, I do want to make this interactive. If you've got questions, if you've got comments, I'd love to hear them. I'd love to react and respond. So let's begin. Why in the world are we talking about this? Now, aside from the fact that just about every meeting of the to-do group has some sort of section where people say, how in the world do we deal with budget issues? How do we justify our value? This is a real concrete issue for so many companies that are doing so much with open source. But they say, you know what, this is maybe important, but it's not urgent. And if you've got a bad quarter, you've got some sort of people coming in, and they want to cut the budget. Ospo's frequently seem to be one of the places where very quickly it seems to be near the top of the list. One of the things that I think is surprising is that Twitter, I think, has blown away their entire Ospo, I think, three times. And then they needed to reconstitute it. This is not a sustainable way to go about these things, but this is something that we see. So how in the world do you manage it? And this is especially frustrating for those of us in this audience, because we know how Ospo's drive business value. But the thing is, you have to show how what you're doing affects the bottom line of the company. Because the sorts of value that we talk about don't always map exactly according to the value that is being measured by the accountants, by the bean counters generally, by the executives. And so we need to figure out how to translate the things that we do into terms that make sense to them. Now, a couple, just minor caveats. Number one, this first point I think is the most important. One size does not fit all. This is I've been dealing with Ospo's in one way or another for, I don't know, probably a decade now or so. And there have been some that have been very regimented, that have very strict requirements. There have been others that have been a little bit more loose. There have been the things that they value. One of the things that was mentioned earlier in the talk about metrics was making sure that the questions you asked when you were setting up your Ospo were aligned with the business needs. That's absolutely true. The second thing is I want to note that these examples, while they are true, are just illustrative. And the third thing is that in most cases, one of these I will talk about more specifically, details have been changed to maintain client anonymity. So with that, let's get onto why in the world do people create Ospo's? Now, a lot of people have lists that are similar to this. I generally tend to break it up into these three main categorizations, either reducing cost because, hey, this source code is free, or we want to be able to engage with the community and we think that it's going to drive our cost down over the long term. That actually is true, but that tends to be why people get in in the first place, but it really is not a good long term driver. The second is business development. This gives us mind share. This gives us market share. Increasingly, this is becoming important for the way in which we get and keep our employees. I was having a talk with Amanda Brock from Open UK over lunch, and we were talking about how open source has grown over the past decade or 15 years, and I think that the difference is that used to be that open source was the exception to your regular software procurement practice. These days, open source is your software procurement practice, and you need to think about all the other things as the exceptions. We haven't really caught up to that in terms of process, but the fact is this is the way that software is done in 2021. This final driver, I think, which comes from organizations that really start to get it, is this idea of managing business risk. You've got a platform that allows you to focus on things that are most important. You're able to stay away from non-aligned vendors and provide self-sufficiency. So with this sort of background, these are what the business is trying to get out. Now, what we do provides value in exactly these ways, but how do we know that what we do provides value? Well, one concrete reason is because we have been able to find situations in the past where people have destroyed business value through interacting with open source communities in very poor ways, and we've actually been able to see them needing to take write-downs, which allows us to measure exactly how much value they destroyed. This, we can then turn around and say, well, if we do things the right way, we can maintain or develop equivalent value. So let's take for a moment a trip down memory lane, and let's look at some of these situations where people destroyed business value. The first one is open office. Now, I think that it's important here to sort of take a look back, cast your mind back to 2010. What we now know is G Suite or Google Workspace was out, but it wasn't very capable. Online office suites were not really a thing yet, and the 900-pound gorilla, of course, as it still is, is Microsoft with its office suite. At that point, openoffice.org had, depending upon the survey, between a 9% and a 14% market share in the US and had over 20% market share in other countries. This is astounding. This is a solid number two position. And if you think back to then, there were lots of people who were coming up through the system who had open office installed on their computer so they could deal with DockX files, and they wouldn't have to deal with the licensing associate or the cost of licensing associated with Microsoft Office. This was a solid position. Here's the other thing is that open office actually had an online story, which could have been developed much easier. An economics study at the University of Boulder, I thought this was interesting, they said, open office has such high penetration that its market share had reached an irreversible point and would grow over time versus Microsoft Office. At this point, Oracle said, hold my beer. What you're looking at here are on the left, on the right, my left is your right, on the right is the defection of developers from open office to LibreOffice over a period of eight weeks in late 2010. This basically, as soon as things started to come in, you saw this vast number of the entire community moved over almost at once. And you can see that in terms of the increasing diversity of developers, the sheer number of them. The second graph is the number of contributors over the time frame from 2009 to 2021. The green line at the bottom is open office. You can see a few places where it still was active, where it was donated to the Apache Software Foundation. And the line up here is for LibreOffice. Now, LibreOffice, in spite of not necessarily fulfilling all the things that it could have been if there hadn't been this massive value disruption, it still has, according to many current estimates, 200 million users worldwide. Again, that's a huge amount of value that could have been oracles, except they destroyed it. They actually paid on the order of many hundreds of thousands of dollars to the ASF to take open office. And they had to take a write down associated with open office. The next sort of series of value destructions, I tell you, Oracle really had banner year in 2010. How many people remember Hudson? Or know what Hudson was? OK, one person. How many people have heard of Jenkins? OK, Hudson was Jenkins before it was renamed to Jenkins. It was the winner of the Duke's Choice Awards at Java 1. It passed cruise control. It was the way to do CICD. It was revolutionary. Turns out that one of the people who worked on it, the primary author, was at Sun. It was hired by Sun and worked there. And while he was at Sun, Sun said, OK, we're going to trademark this. This looks like a great business. And they did this Hudson trademark. Oracle acquired Hudson as part of their acquisition of Sun. And at that time, they were considering just moving to GitHub because there were some issues with the Java.net platform and to attract a greater developer mind chair for ease of use. Oracle said, no way. We want this to be tightly associated with Java. You are not moving it. And by the way, if you happen to move it, we will be asserting our trademark rights over the name Hudson. And as a result, everyone said, OK, too bad. We're just going to rename it to Jenkins. And thus, Jenkins was born from the code that used to become Hudson. Now, what's interesting here is that this is one of those cases. Both of these are actually cases where the community went one way, and the trademark went another. When you talk about goodwill, we're going to be talking about this a little bit more, goodwill is typically associated with the trademark, the intellectual property, those sorts of things. Here, the intellectual property is the same. They still have it. The trademark actually stayed with Oracle in both cases. But here, the community went over to the new project. And the vast majority of the value associated with the product was in that community goodwill, not in the trademark. This is one of the places where trademark lawyers get it wrong all the time when they're dealing with open source. The community is where the value is not in the brand, because the community will move away from the brand if they see that it is being threatened. So I want to note, again, this was a great business that was destroyed by Oracle. This is market share percentage. As of right now, you'll notice that Jenkins has greater than 50% market share right now for CI CD systems. They would have loved to have had this, and they lost it, because they did not deal with their community correctly. This final one, I've got a question mark on it, because it is suggestive, but we can't say yet that there is a destruction of value. But there are certainly something interesting going on. Early this year, Elastic, the company, decided that they were going to re-license Elastic Search away from the Apache license and dual-license it under the SSPL and their Elastic license. They did this because they wanted to be the only company that was able to host it. Amazon had already been doing a fork, just maintaining it, because Elastic had been mixing their code with some of their proprietary code. So when they did this, Amazon announced a full fork. And then in just this past August, like two months ago, maybe even, well, I guess eight weeks ago, Amazon's open search fork became publicly available. Now, I want you to look at this graph, and I think that this graph is wild. I've marked in orange the date when open searches became publicly available. And what do you see? This is the retention of outside developers after that date. Now, I did take a look at open search to see whether there was a corresponding rise there. The answer is they are rising a little bit. What I see is this is an abandonment of Elastic Search. And it may be that open search wins, but the jury's still out. But still, I think that it is astounding that their retention of outside contributors has fallen off a cliff. So let's go back. How does an OSPO create value? Well, you've got a number of things that are buzzwords that people talk about. There's compliance. There's community development, retention, goodwill, marketing, security. This has actually been a really big one over the past year, both here in the UK and especially in the US with the new cybersecurity order that was put out by the Biden administration. They said, hey, you need to track your entire software build materials, including all your open source bits. That has been huge. And in my opinion, that has moved away from legal compliance as the major driver for open source process adoption in the United States companies. So let's look at some of these arguments. The first one is, hey, this is compliance. And like I said, this has traditionally been the thing that has gotten the OSPO at least some funding. This idea that, hey, we need to comply with the license. Otherwise, something bad is going to happen. We're going to get legal pressure. It's usually framed and heard of legal pressure, although non-legal pressure ends up being more significant in my experience. This is important, but not urgent, like I said. So it tends to get pushed back. The other argument that you frequently hear again is that, hey, this is free. We're going to get community development. Yes, again, this can happen. But anyone who believes that this is a primary driver for why you should have an OSPO is still living in the late 90s when everyone thought that being open source was magic fairy dust. Instead, I want to focus on those other things, which I believe are real drivers of value. And I'd like to give three true examples and case studies of how we were able to show OSPOs creating and maintaining value. So number one, employer retention. The real point with this one is that it costs a lot of money when you lose somebody. You have to find a new person, and you have to retrain them. For the sorts of people that we're talking about, it is on the order of 100% to 150%, sometimes even 200% of the yearly cost of that employee to go through that cycle. So with that in mind, this was a story at Rackspace, where we had a bunch of developers in our San Francisco office. And we had, I don't know if any of you have heard of the NPS score. There's external NPS internal or employee NPS. That's what this is. It stands for net promoter score. It's basically a measurement of how many people are positive versus negative about some question. Zero is considered the median score for an employee NPS. 20 to 30 is considered to generally be pretty good. In our office, we had an NPS score of around negative 20. This means that we had significantly more detractors than promoters. This would lead to and was leading to significant defections to other opportunities. We implemented a new open source policy that made it significantly easier for people to engage in the open source community for them to go through and make contributions, including those in their own name, that eliminated a lot of the process associated with it. The E-NPS, this NPS score in this office, jumped 40 points and stayed there for at least two quarters. We later, when we went across and tried to figure out, what did this do for us in terms of dollars and cents? If you run through the number of people that we figured that we saved and their total aggregate salaries, we estimated that we saved $2 million of avoided cost over a one-year period through this change that was driven by essentially our open source, our OSPO. You can also note that the same sort of analysis applies to the cost of employee acquisition. If you've got a good reach into the community, it's going to be a lot easier to recruit. And the cost of training, if everybody who you're bringing in already knows the tools that you're using, it's very easy to train them. Story number two, this is one of those companies that has, essentially, an open source product that then feeds into a SaaS model. Now, sometimes people think about, oh, open source and marketing, they don't mix. And in fact, they say that one of the things that you should never do is send a marketing person to an open source conference. I say that that's Bollocks. Open source can be thought of as one of your most effective marketing channels. You just have to do it effectively. I mean, saying that it's not a marketing channel is sort of because people are doing it wrong is sort of saying, well, when we tried to show all of these grandmas heavy metal music, they weren't really interested in our product. Well, I'm just making that up. Maybe there are plenty of grandmas who love heavy metal music. But I'm saying you have to do it appropriately. Now, in this case, this was one where they actually went and talked to the people who were buying their product and they discovered something amazing. The first is that more than 90% of the people who bought their product started by using it, starting by using the community or the open source, the unsupported edition. They kicked the tires. They tried it out before they bought. This was a significant driver for the purchase decision. The second thing was that this was something where when people came in, it tended to be several thousand dollars per month. They would have an average lifetime of two to five years. So your total lifetime value of an average customer was somewhere in the hundreds of thousands of dollars range. Now, that meant when you backed it up into the number of downloads, the average value of a download was somewhere in this $50 range. Now, of course, the vast majority of those were the value of them was zero. But when you had a hit, it actually was so valuable that it lifted the average significantly. Another thing that people sometimes say is that if you've got this SaaS model or a support model or whatever, the strong inclination is to make the open source version really terrible so that people have to pay for your support. Turns out that was completely wrong. In fact, it was the positive experiences with the downloaded version that was one of the most significant drivers toward adoption of the commercial product. Now, when you did the analysis, the conversion was actually pretty low in an absolute manner. But it was better than some of their regular marketing activities. Other measures of community activity, stars, forks, interested at conferences, were also positively correlated with sales. Now, here was something that was fascinating is that the people who had the highest lifetime value, who were the best customers, were actually the most likely to convert. Now, again, you might think, why is that? It is because those who were satisfied with the basic version and didn't need to get into some of the more complicated deployments or needed to have some of the different support or indemnity or other things that make companies warm and fuzzy, they just went by and did self-support with the free version. This meant that rather than just being a neutral sales funnel, this positively selected for the most valuable customers to come in the front door. And like I said, the better the developer experience, the more there was conversions. This third story is about a startup. And I talked about this idea of goodwill. You see up here the definition of goodwill. It is the things that the value that is attributed to a business separate from its assets or receivables that basically everything that you can't exactly account for. Well, in this case, this was the acquisition of an early stage startup. If you think about it, it had a relatively small number of employees around nine. It had an Apache license code base, which everybody was interested, which everybody could access. It had one trademark, which was of no interest at all to the acquirer, but it had some really interesting beginnings of a community where people were starting to take this technology and play with it and figure out things that they could do with it. For this group of people, it was an $8.2 million exit, which isn't huge, but for them, it was pretty significant. And the majority of the valuation was recognized as the value of this community association with the code and the ability to continue developing it. That was what drove this acquisition. So when you look at the venture, how were they able to determine the value? Well, they looked at downloads, stars, forks, blog posts. They had a little bit of revenue, but honestly, it was in the tens of thousands type range. The valuation was driven by this non-trademark goodwill. So let's think about your organizations. The common denominator here is that we were able to address the value driver that was associated with some other part of the business. And as an OSPO, you interact with all different parts of the business. In fact, I've highlighted here a few things, and this is, again, illustrative, but you see you've got marketing and comms, you've got engineering, you've got legal, you've got the executive team, you've got HR. Every single group, almost every single significant group, you have some way of interacting with them. Now, when you go back to these ideas of establishing value, the most important thing is to be able to say, how do these interact and how are these viewed by these various other parts within the organization and how can we make this a shared win? And in particular, I want to basically give you what's the TLDR? Every organization has cost and profit drivers and within each organization, each part of the organization has cost and profit drivers. So identify the way that you interact. Use the same categories for ROI that your business partners are using. For example, when we talked about measuring ENPS as associated with doing that, the change in the open source policy, this wasn't because we necessarily loved ENPS, it was because the organization was already using that and so we used their same metric to judge how well we did. You also want to use the same budget categories, downloads, revenue, the value of something happening in the funnel because that is the thing that they're already trained to think about. Be interested in looking how you can share wins with other parts of the organization. This is not only an effective way to collaborate, but it also means that all sorts of different areas will become your champions because they see you helping them. And the other thing is that if you're part of an organization that does a lot of acquisitions, this is a great place for your organization to jump in and be a part of it because one of the things that companies hate doing is making markdowns associated with lost goodwill. If you can come in and say, hey, if we go through and we handle this correctly, you won't have to take a write down next year for this acquisition that you just made. That's a great way to get some people's attention. And then finally, security is very big. It's driving a lot of this process. That is a concrete value driver right now. Hop on that train. Thanks, any questions, thoughts? Yes. Sure, and could you get me back to the developers that actually made contributions and so on and used the new policy and how, because it seems like the effect of the E-NPS would be particularly high for those. So we know that some employees did use it. We didn't track that. However, we do know that the E-NPS jump was due primarily to the open source policy because as well as the E-NPS question, there was a free response portion and the majority of the free response answers did credit that for increased happiness at work. So it was not only due to actually making contributions but knowing that they had the freedom to do it. Yes, okay. So that's a great question. I'm gonna repeat it for those. Could you all hear it? She said, I talked about essentially the marketing value of engaging with a community. How do you balance this idea of increasing your community value versus increasing the value of your company and saying, hey, we need to balance this? Is that a good representation of your question? I think that the important thing to do is, number one, using this sort of analysis, you can see that the majority of the value is actually located outside your company. You may be the steward of that value but if you want to harness it, you actually need to increase the value of the ecosystem sort of as a primary driver if you want your own value to go up. So I think that that realization that they are intimately tied is the first thing that needs to happen. The second thing is that I'm a big believer that there are certain things that people are going to be willing to pay for. There is inherent scarcity around some of these things and what you see sometimes with people trying to change the licenses or do things is they're trying to artificially create scarcity. The thing is there are already, one of the great things about software, especially open source software, is that you can deal in abundance. There are things that are naturally scarce and if you can focus the things that you offer that you create business value around, around those things that are naturally scarce and not try and drive artificial scarcity around the actual bits, the code, then people will be very, very happy to trade that value for money. I think that a lot of times just the, hey, I'm going to sell you a license. Maybe this was a big driver back when but now I think it's a little bit lazy and it ends up maybe you capture a bigger share of the pie but it definitely shrinks the pie. All right, I am overtime, so thank you all.