These are slides from Jeff Walpole's Keynote presentation at the BADCamp Drupal Product Summit

1. THE MANY
BUSINESS
MODELS OF
JEFF WALPOLE
CEO, PHASE2 TECHNOLOGY

2. THE DRUPAL
EXPAND THE DRUPAL MARKETPLACE INTO A
DIVERSE, SUSTAINABLE, ROBUST ECOSYSTEM OF
COMPLIMENTARY PRODUCTS AND SERVICES THAT
REINFORCE AND COMPLIMENT THE OPEN SOURCE
PLATFORM BUT ALSO EXPAND PROFIT

3. OPEN SOURCE
FACTS

4. FOUR FREEDOMS OF
• Freedom 0: The freedom to run the program for any purpose.
• Freedom 1: The freedom to study how the program works, and
change it to make it do what you wish.
• Freedom 2: The freedom to redistribute copies.
• Freedom 3: The freedom to improve the program, and release your
improvements (and modified versions in general) to the public, so
that the whole community benefits.

5. GPL CHALLENGES
• You build an open source product and distribute it.
• The market uses it, demands features, requests releases.
• You CAN sell it, but...
• Selling can be undone by any buyer who then distributes it
for free.
• “Selling services around it” is not productization.

6. COMMERCIAL USE
• open source is about distribution and use / not licensing
• open-source licenses do not preclude the commercial
exploitation of the software (i.e. selling)
• you can add to open source and then repurpose it
• you can package it with licensed commercial software
• open-source licenses are not anti-commercial, they are
anti lock-in
•

7. BUSINESS MODELS
• open-source software is copyrighted, but released under licenses
which allow free use and re-distribution which do not preclude
other’s creating business models.
• But...the open-source revenue model is typically one based on a
service revenue stream rather than a license revenue stream.
• Proprietary software can also be built with open source tools or
be linked to open-source libraries and run on open source.

8. THERE ARE TWO MAIN
1. use Drupal’s intellectual property to attract people's attention
and then realize money from our expertise (e.g., as in lead
generation/advertising).
2. providing services tied to the intellectual property (i.e.
consulting)
3. more are emerging...

9. OPEN SOURCE
BUSINESS
MODELS

10. SERVICE(ISH)
Model Examples
Consulting and Implementation
Every “Drupal shop” out there
(e.g. professional services)
Redhat, Build-a-Module,
Documentation and training
Drupalize.me
Support retainers & subscriptions Acquia, Redhat

11. PRODUCT(ISH)
Model Examples
Freemium
Alfresco, EZ Publish
Dual licensing JBoss, MySQL
Distributions Commons, OpenPublish, Atrium

12. DISTRIBUTIONS
BUT THEY ALLOW FOR...
• Re-use
• Standardization
• Interoperability
• Use case targeting
• Building blocks for other models

13. DISTRIBUTIONS DON’T
ALLOW IP CONTROL.
• marketing (for everyone)
• lead gen and marketing for the creator/ maintainer
• platforms for more sophisticated services/ tie-ins
• better platforms for application stacks
• could allow for support models

14. INTEGRATIONS
Model Examples
Add-ons (apps/plugins/themes) Wordpress, EzPublish
External Product Integration cloud services, Drupal Commerce
Redhat OpenShift
Application bundles (SaaS & PaaS) “Moonlight” (hosted OpenAtrium)

15. APPS & ADD-ONS
• Extends the module -> features concept
• Externalizes functionality
• Allows for separate development path, independent
upgrade path, & separate ownership
• Makes distributions an “integration point” for paid services
--> Commerce Kickstart and payment processing service
• Keeps base product (or distro) lighter

16. EXTERNAL PRODUCT
• Extends the “solution” for things Drupal doesn’t do or isn’t
good at
• e.g. Salesforce integration for CRM
• Connects a product (built in anything) and a Drupal site
with module or API
• Creates a stack of functionality

17. APPLICATION
• Fully hosted stack, from environment to distribution to add-
ons in a single solution
• Can be more easily priced and sold as a single “product”
• huge operational responsibility
• can be a partnering challenge unless you own the full stack

18. potential not recommended
Low Feasibility
Dual Licensing
Support
Freemium
WHICH
ONES
Retainers/
Subscriptions
Competitive/
Legal Feasibility
where we started where to focus
Product
WORK
Distributions Integration
Add-ons &
Plug-ins
Documentation &
Training
Consulting and Application
Implementation bundles (stacks)
High Feasibility
Low Barriers to Entry High Barriers to Entry
Complexity

19. DISCUSSION
• Which of these might work and how?
• Who is doing these models?
• What other models should we be considering?

20. phase2technology.com
@phase2tech