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Being open to open source and creating a new business category at VMWare

TechCrunch TechCrunch 22/06/2016 Elisa Schreiber

In the age of developer-defined infrastructure, where developers have decision making power in application and cloud infrastructure technologies, open source has proven to be a powerful go-to-market and distribution method for enterprise. But not too long ago, the idea of open sourcing technology was not considered a viable business strategy.

Jerry Chen, a partner at Greylock Partners, remembers a pivotal meeting at VMware in 2010 when they were discussing open source as a potential go-to-market strategy for Cloud Foundry (previously AppCloud).

At the time, the team coined this as the nuclear option — they wanted to be an application platform, but “open sourcing a strategic product and giving away for free was not common to the company at that time,” Chen recalls.

As the team dug into the idea, they realized opening up Cloud Foundry would quickly boost adoption, moving economic value down not only to their virtualization platform, but with a bigger ecosystem of players.

Open sourcing Cloud Foundry was a three step process, Chen explains. First, they had to win over the developers – the more developers that built on the platform, the more value it would accrue and the better the platform would get.

The second part was building partnerships with other enterprises and cloud providers to create an ecosystem of companies that had a vested interest in Cloud Foundry’s success. Once they had developer adoption and key strategic partnerships, Cloud Foundry became a platform.

With open source projects, if a technology or product has merit – whether it’s a new version of Linux, language or container technology – developers will quickly find it and adopt it. Open sourcing Cloud Foundry as a go-to-market strategy was effective because accelerated user adoption solidified it as a valuable platform.

This led to the creation of Open Platform-as-a-Service, an entire new category, which paved the way for the next generation of developer infrastructure companies, like Docker and Mezos, and open source projects from companies like Google. Creating a new category was one of the most challenging things Chen has ever had to do in his career. “It’s a big rock to push up the hill because you’re motivating not just yourself but also an ecosystem of partners that are outside of your control.”

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