I had a chat with an ex-colleague yesterday who told me that Talend had acquired Germany-based open source SOA platform ‘vendor’ Sopera.
This move came on the back of the news that the company had completed a $34M round of funding and Talend seems to be aiming very high with it’s combined proposition. In the accompanying press release, which is refreshingly bullish and direct, the company is aiming at vendors such as TIBCO, Software AG and Progress Software; describing those vendors’ solutions as ‘proprietary’.
Whilst it will be very interesting to see how Talend embeds the acquired technology into its own offering, it will be even more interesting to see how Talend will massage it’s go-to-market model in the light of the new acquisition. The concern I would have is the impact on the very smart model that has served it very well to-date of stealth/viral ‘infection’ of an organisation through the download and deployment of easy to use software that solves an easily definable set of problems in data management. Can that approach be extended to strategic SOA deployments? Or if not then can that the approach be extended to tactical, definable, integration projects? Perhaps. If so, is the Sopera toolset easy enough to be downloaded, installed and configured to address these smaller-scoped projects without ‘adult’ supervision? All good questions and only time will give us the answers.
One thing I do know is that the audience for strategic SOA / middleware solutions is different from Talend’s current audience. It is also difficult to reach and difficult to get them to take risks on new products. The approach used for product evaluation at this level is also not the suck-it-and-see style that Telend has exploited so well. There are certainly influencers and gatekeepers in the sales process that will download and evaluate new and interesting technology, and I guess it is that audience that Talend hopes to reach, but they don’t control corporate acquisition of strategic technologies.
If Talend were to try the same model it uses today (download/evaluate/buy), they would not likely get to talk to those individuals within an organisation that make the strategic decisions. This means that they therefore are not likely to unseat the TIBCOs, the Software AGs and the Progress Softwares of the world. However, if they provide ‘free’ or at least zero-licence-fee software that solves point integration problems in a really simple way, then they may well be able to get a foothold and overtime become the strategic solution.
Then again, isn’t this what Progress is doing though it’s IONA-initiated hedged bet – FuseSource? And behind that is the already credible Apache community. So how successful has that initiative been? Well if we’re looking for evidence of the growth of the open source integration market, then one can read Progress’ decision to spin FuseSource out as a separate company in one of two ways. It either means that the time is now right for FuseSource to fly the nest and dominate this new growing market opportunity. Or, with sales increasing only 130% in 2009 (from what must have been a very low base), it could mean that when Progress decides to pull the plug, it doesn’t want to get any blood on its corporate tie. And having personally been part of the similar spin out and subsequent re-assimilation of Sonic Software, I’m not sure it validates the market as real – just yet. But if I was feeling charitable, I’d probably say that Progress wants to give FuseSource more focus and to free it from the gravitational pull of planet Progress and its serial-reduction-in-force addiction. We’ll see.
The challenge with open source business models is that as the use of the product moves from the tactical to the more strategic, the sales process becomes exponentially more difficult to control. I spoke with a friend a while back who had, at that time, been pushing open source middleware for some time with low to moderate success and he told me that his main challenge was that of repeatability. He would make ‘sales’ but he found it very difficult to reproduce the conditions of the sale in another account. He struggled to ‘sales manage’ accounts in the traditional way. He simply had to sit back and wait for the downloaders to reach out to him. And when they did, the scope of the sale and the limits of the project were all decided and so he found it difficult to increase the size of the deal. And at the same time, other software licence vendors with better access to power in the organisation were selling from the top management level down, making it difficult to get decisions made. I’m sure Telend has confronted these challenges already and will have a plan, but those are the challenges with open source business models. The paradox is that as the offer gets closer to the strategic, so the sale becomes more difficult to control and protect and unless the software is being used strategically the revenue isn’t significant enough to support the business.
As to the specifics of the marketing approach of the new offer, we’ll have to wait and see. But from the material in the public domain so far, Talend suggests that there are synergies between data-management and application integration and describes the combined product set a a ‘global middleware platform’. Unsurprisingly the offer seems to play on the Cost, Operational and Risk categories from our MITICOR value proposition classification and the Commercial, Operational and Management categories from our PIPESCOM product feature classification. So in terms of differentiation from their stated competition, there isn’t a great deal other than that provided by the open source nature of the product. This will make competing on capability very difficult and if we then look at the proof of ability that Talend (Sopera) will be able to provide potential customers, it’s a long way short of some of the more established, commercial offers.
Steve and I actually had some dealings with Sopera in its very first days as a off-shoot of Deutsche Post and it was clear then that, as I’ve outlined above, they had some clear challenges ahead of them. Does the Talend acquisition mean that Sopera succeeded or failed? Perhaps a bit of both. Open source integration is not an easy nut to crack, but importantly, Talend has momentum and philosophy in its favour. Talend has been executing its plan well and has established a good business model, the infrastructure needed for that business model to work as well as the credibility it will need if it is to be successful.
So we’ll watch with interest to see how this develops.