 Okay, well, hello here. Thank you for attendance. Sorry for the technical problems we just had and the delay. Let me present you Peter Ganten. He is CEO of the Univention GmbH in Germany since 2001 and the chairman of the Open Source Business Alliance since 2011. Today, Peter will talk about obstacles for small and medium-sized enterprises. His theory is that in large enterprises, it is widely known that open source and free software is a good thing, but for small and medium-sized enterprises, there are still many open questions. And today he will tell us about some potentials for small and medium-sized enterprises which advantages open source software has for those companies and which challenges we have to face. So please join me in welcoming Peter Ganten today. Thank you. Thanks a lot and hi everybody. So my name is Peter. I want to speak about, as has been said, about the obstacles small and medium-sized companies have with open source software and I want to share some of my ideas what can be done about this. I make my living as the CEO of Univention, the company I founded back in 2002 who of you has heard about Univention already and knows what we are doing. That's roughly the half. For those who did not raise their hands, we make an open source software for organizations to manage their identities and to manage the access of their identities to a lot of different software systems like open source software like Samba or KVM or Ubuntu, groupware systems like Open Exchange or Sarafa and also a number of proprietary systems and proprietary cloud services like, for example, Google Apps for Business or Microsoft Office 365. I forgot to show you that slide. Our core product is a Univention corporate server and you can think of it as a complete solution providing identity management, system management. It is quite scalable, but it is also used by many small businesses. We have, meanwhile, around 4,000 organizations worldwide working and using this product. A lot of them are small businesses. A lot of them are, a lot of our customers are small businesses, but I have to add that we make most of our money with larger organizations which manage tens of thousands of identities with our products. A special group of those are school authorities who in many times manage hundreds of thousands of identities of students and teachers and their access to infrastructure in school and in schools like Wi-Fi, like computer rooms but also cloud-based applications and so on. So what is the problem with open source software? What is the problem with open source software and small businesses? Hasn't open source software already won? I think most of us know that all the Fortune 500 companies or all the DEX companies in Germany, all of them use open source software and many of those use it in a strategically way. And also if we look at the big success story of our technology sector, of the information technology, we can see that companies like Google, Facebook, Amazon that they use open source software wherever they can. I know that this does not mean that they are contributing. Everything they do, like they write, like for example we do, but to be fair, they at least use open source operating systems, databases, web technology and most of the cases, they are good contributors to the projects they are using. And this is really a great thing because it brings free software as a whole forward and it brings the industry forward. So the large companies are using open source, the internet technology companies use open source and even our beloved enemy, if you like, Microsoft, more and more behaves like an open source company and commits itself to open source in more and more cases. I would not say they are an open source company but what you really can see is that they are very actively looking at this and scrutinizing everything if they can engage there or not. So maybe we can say bye-bye enemy here, I have to say that. So it looks like everything in mind in IT now knows that open source is the way to go but if we look at our plumber, our physician, our tax consultant or if we look at medium-sized companies like the many suppliers to the automotive industry we have here in Germany or logistics companies, food companies, we only randomly find open source software. Yes, there might be Firefox on the desktop. Yes, someone might use VLC but a strategy to use open source wherever it is possible almost never. And these companies, they are small but together they form at least here in Germany and I think in many other European countries. I know that in the US it is a little bit different. They together form more than 50% of the economy as a whole so it is really a huge sector. So why don't we find open source strategies in these companies? I think you can put it in two different ways. The first possible way is maybe a little bit mean. You could say they are ignorant of sustainable IT strategy and they combine this ignorance with short-term profit seeking but maybe a little bit more realistic version of this would be that the benefits of open source software are just not apparent to them and that it is often economically not feasible for them to use open source software. That of course sounds counter-intuitive. Isn't open source free to download after all? I mean why does it economically make no sense? Now suppose you run a metalworking company. You have maybe 50 people, foreign sales, 2 in marketing, 5 more in accounting, HR and other administrative jobs. The rest are engineers, turners and welders. Of course you need information technology. You need file servers, print servers, email, web servers. You would need something to manage your customers, your accounting and I think that's just the basic stuff every organization needs. Additionally you probably need some industry-specific software like in our example CAD software. And all of this especially the non-industry-specific stuff for sure can be done with open source software in an excellent way. There's telephony software like Asterisk, AugerMindschaft, file print, web servers are part of any all-purpose Linux distribution and I could go on with this list for a very long time. So it is possible, but there seems to be a problem. What is the problem? Plugging all these different components together is really a huge, huge task. And you need user management, identity management, you need mail services. These have to be secure as you don't want to be, don't want to make your company the door for all the spammers of the world. You need to combine this with group where you have to customize the ECM system and the CRP system and so on. And that really takes a long time and costs a lot of money. I would say taking the stock open source software and combining it to something which really can be used and really can be maintained would take weeks if not months. If you look at those Linux desktop projects like for example in Munich or the failed ones at the German Office of Foreign Affairs, you can see that this is really true. Those projects decided to build everything from scratch based on popular Linux distributions like Debian or Ubuntu and it took them years to get something running. And this effort is never affordable by small and medium sized companies. And also we have to remember once you are finished that's only the start of the work. You have to, once you are in production you have to support your users, you have to fix bugs, you have to roll out critical security updates and you have to update the software as a whole all of the time to satisfy your users' needs, to satisfy security requirements and also to maintain compatibility with the outside world with other services and with file formats. And this requires a lot of integration testing and that also cannot be done by small businesses. Now imagine our owner of this metal working company who was told that he should use open source software because it's free to download. He ends up with maybe one, maybe two people who have to maintain his stuff, two experts which are hard to get in the market and are expensive. He won't save money and I think you also will not think that he is now more independent of external influences of other vendors like he has been before. It does not make much sense for him. Unfortunately I really have seen a lot of those cases. Sometimes we were brought in with our integrated product and it was hoped that with this product open source could be saved in these companies. But typically that was too late. It was not possible to explain why our version of open source software now is better, easier to maintain and in the end not that expensive than what has been done before. These companies really were burned by open source software and my message here is we really should stop burning valuable open source software at innocent SMEs by pretending it is free. It's not free, we instead should really concentrate on the real benefits of open source software like vendor independence, more security, the ability to change it yourself. And yes, these benefits really come with costs. As a side note that is one of the reasons why we at the open source business alliance still prefer to speak about open source software and not about free software. Of course we know that this is, we all mean the same thing here and we know the difference between free beer and free speech for sure. But for an owner of our metalworking business here, if I speak about free software, he will think it's free of costs and it is not and that is really a problem. So we should take the responsibility if we are enthusiastic for an open source software and think twice if it really makes sense to use it when we speak to a non-technical responsible person in a small business. Often enough, luckily, this question can be answered with yes, that's the good news. And then of course we should do it but if we are unsure, we really should resist. As they say in sales, one happy user speaks to two other users, one unhappy user speaks to seven or more about his mis-success with open source software and we should try to avoid this. I'm always astonished that almost everyone in IT has heard about the problems at the German Foreign Office. Everyone in the public administration, I speak to, has heard about this and everyone has heard about problems with the Linux desktop project in Munich and tells me about them, especially if they are not true, they move really fast from mouth to mouth. But almost no one has realized that the internet, all those huge internet companies have been built with open source software completely and that this is really a huge success. As they say, bad news travel fast, good news are still being written down somewhere. But there is open source software and SMEs, right? There's Firefox, there's VLC, there's more and more LibreOffice in small and medium enterprises and the question is, so why is it successful? I think the main reason is not because it is open, that is a good thing for these companies. The main reason is that it is really easy to install, easy to access, easy to use. It does what the user wants it to do and it is well maintained. And luckily also for our metalworking shop, they are great easy to use solutions available and I'm proud that my company makes one of those. But even if it is open, if it is there and if it is available, the price is not the central point to make a pro open source decision. I've omitted some of the slides here that is a slide someone from my company made to show how complex the internal workings of such an environment are. I won't comment on this. These are the costs and I would like to underline now the fact that cost is not the central point here by one of the most important lessons we at our company have learned in our history. That was when Microsoft announced that they will discontinue their Microsoft small business server. And then the Heiser Verlach, those of you from Germany for sure know the Heiser Verlach, they make Heiser online and the CT, they approached us and said to us, hey, with your product we can make the perfect alternative, the perfect software to migrate to as an alternative to Microsoft's small business server. And we thought, wow, they are backing us, they print, they now print 300,000 issues of the CT with our software and write about it. And we put really a lot of effort into this and thought this is the chance of our life now. But from the marketing perspective, that was really a success. Many downloaded the software, tried it, many got us to know, but commercially it was, I have to say, really a flop. Our business model at that time was that similar to the Reddit business model, the source code is free and available on the open source license. We used the AGPL, but if you want to access updates and if you want to use the binary product as it is delivered, you have to buy an enterprise subscription. And through this Univention Corporate Server CT edition, we just sold only a few licenses for the enterprise subscriptions. We really had expected something different and asked our customers and they told us, well, yes, it's cheaper, it works, but you know the price difference is not that high to Microsoft. So we will better stick with them. And then we told us, but our service is better. And they said to us, yes, that might well be and that has to be the case because we do not expect any service from Microsoft, but should we use your product, we will expect the best service you can deliver because if there, should there happen anything, you really have to make sure that it will work because we take a huge risk to work with something else as Microsoft. And that, of course, was a dilemma for us which we couldn't solve. We couldn't drive on the one hand, the price is down to be really more competitive and on the other hand, deliver a better service. The conclusion to this again was do not compete on the price. Our conclusion from this was we make the product available for free completely, including the binaries, including the maintenance now. Every small business and every other company now can use it, download it, assess or update servers. And now it is free as in free beer. And I have to say, this really has been a huge success now. Week for week, more and more companies worldwide use our products. We measure the access to our update server here and it really goes up week for week. There are many small businesses amongst them, but a lot of those would not pay us anyway so we are really not losing anything here. But on the other hand, we get split in the market and get market awareness and a lot of medium and larger companies get to know us and they really seldom discuss the need for enterprise subscription with us. It is nearly impossible for a large organization to run an identity management system which was just downloaded from the internet without an external vendor being responsible for us. So they are paying us and so the model works quite well. So that means the software has to be free if it wants to be successful, besides being easy to use and easy to manageable. It has to be secure and services, of course, may cost money. Interestingly, this is the model, the proprietary world now adopts also. Look just at Microsoft Windows 10, for example. They make it freely available now too but of course they charge for their services. But still, we should look back at the question, why don't small businesses want to pay more for open source? They get more, right? They get the right to change it. They get vendor independence. They often get an overall more secure software. So why don't they like to pay more? I think one of the reasons for this, so these are some other larger companies, one of the reasons why they don't want to pay more for open source software is that the risks associated with proprietary software are huge but they are not found in the balance sheet. An exploit through an proprietary router can ruin your business. If you are a small hospital and you have to pay ransom to someone to use your PCs again, and if there would be my data on these PCs, I really would have a problem to go to this hospital again. So this is really critically. And in other scenarios, for example, if you work with toxic chemistries, you would need an insurance. You would find this insurance here in the balance sheet. If you are a small business and you have risks in your software stack, you won't find it. And I think we should really think about this if this makes sense. Or if risks in the software stack have also somehow made visible financially, because it is a financial risk in the end. So what can we do about this? I think the good news is that most small and medium-sized businesses are privately owned. And these private owners have really a high interest in a long-sustaining business. So they are aware of these risks. If you explain them, on the other hand, unfortunately, they often do not understand much about IT. So we really have to speak to them and to explain these risks. Secondly, we should bring these risks more into the public discussion. As we have seen, small and medium-sized businesses are really the most important part of our industry, of our economy. And we depend on them. And we should really think about if these major part of our economy should depend on just a few companies and their arbitrariness, if you like. We should think about that. As we have heard, the software itself really has to be easy to use. It has to be secure. It has to be integrated in a nice way so that small and medium-sized enterprises can work with it. And if we have achieved this, openness will always be a plus. We can always win with this. And the last point I want to make is that we really have to insist that critical infrastructure has to be open source as it has to be secure. And if we think about critical infrastructure, we often think about the stuff the government runs or the stuff really large companies run. But most of the critical infrastructure is run by small businesses. Think of smaller hospitals, think of ambulances, also water supply companies, sometimes even electricity companies are not that large companies. And we need a discussion on how secure and independent of external influences we want those infrastructures to be. So thanks a lot. I don't know if we have time for any questions. Okay. Thank you very much, Peter, for this interesting presentation. Now we have a short five-minute question and answer round. Any questions over there? Just a moment. Hi. Thanks for your presentation. I think it's very crucial topics you talked about. And there's one particular thing that I'm a bit puzzled. And hopefully you can give me an idea because it has been puzzling me for ages, maybe. And it has to be with the advantage of the vendor independence. You talk that free software is not cheaper, but it has other advantages. But then what is exactly the advantage of the vendor independence? Is it not to avoid the vendor locking and in that way to make the maintenance a bit cheaper? So it's not that economical advantage or is there other things? I think that the point with vendor independence is not, it is for small businesses, valuable if something bad happens. If you have a good supplier who does it work very well and doesn't charge you too much, in the end for the small and medium-sized business, it will not make a huge difference if it is proprietary or open. But now, if the vendor decides to change something, you have options or you do not have options. I remember some customers which were using Microsoft forefront server as their security gateway and one of those in a very large project and then Microsoft decided, well, we discontinued that product. There was no other possibility than designing the whole project new and it costs them hundreds of thousands of, because it was really a large project here, of euros. And this is on a smaller scale true for small businesses too. On the other side, if you were a business which has used open office and open source product and now Oracle, which happened, decides we are not interested in this anymore. We discontinue it. It is open source. Someone else can step in and go ahead and start to maintain it. And there have many cases been in the past where this really happened. It only happens typically if there are enough users, if it makes sense. But if there are enough users, you can be quite sure. And I think this gives you long-term safety and this is one of the risks you typically buy an insurance for. Because also hopefully not every year someone breaks into your company and steals something, you still have to hedge for this. And these are risks with proprietary software too. And the companies don't hedge for it. And I think this has to be discussed at least. Did that explain it? Okay, great. Any other question? Hi, one thing I'm not totally clear about is in the beginning you said big companies use open software more and more. But then in the small companies, actually I don't see that much of a difference in big companies, they still use Microsoft Office, I'd say 99% so. Did you now more focus on infrastructure in this talk or can you clear this up? At least I'm not totally clear about it yet. Yes, I think open source has been very successful in many areas. It started with server operating systems, then came databases, then came middleware, web technology. And I cannot imagine a large enterprise building a new web service for its customers using proprietary products for this. It really happens not very often. Sometimes they still have it, they have the knowledge there, but you really have a good chance to succeed and to convince them to use open source software there because it really makes sense. We have not been that successful in the desktop space yet. I mean, this is true for large companies and for small companies too, but if we look on the server side, on infrastructure, yes, open source is considered in most large companies, nowadays, and it is not considered in most small companies nowadays. And I think that is the difference. Okay, one more really quick question if there's any. Okay, well, then very thank you very much, Peter, and also to the questionnaires. Thank you.