openerp-community team mailing list archive

[Raphael Valyi <rvalyi@xxxxxxxxx>]

Hello Fabien and Marcelo and the others,

Some inline comments and I just want to clarify a point at the end;


On Sun, May 18, 2014 at 11:47 AM, Fabien Pinckaers <fp@xxxxxxxxxxx> wrote:

> Hi,
>
> [...]
>
> 2/ Why don't we charge according to real usage? (e.g.: 5 users on CRM, 3
> on accounting, 7 on projects?)
>
> Because it's impossible to predict for yearly contracts!
>

Of course


> 3/ Is it expensive?
>
> Absolutly not. It's 2x to 3x cheaper than the market average. Check this
> comparison of software vendors:
>   https://www.odoo.com/website/image/ir.attachment/537400/datas
>
> Moreover, partners get 50% to 60% discount on the public price. It means
> gold partners pay only 4.8€ / $6 per user and per application. Whatever
> the market, it's super cheap and super competitive.
>

In fact it depends very much on the country: for instance in France it's
not very expensive indeed. It's probably not so expensive n the USA either.
But in a country like Brazil (where is Marcelo or me) it's absolutely
prohibitive (and no SMB's don't use the ERP listed in the comparison
exactly because they are totally prohibitive here too, so where these
products sum may be 60% of the marketshare in some norhern economies, they
have less than 3% of the market in a country like Brazil ).

'course it's not OpenERP'SA fault if some countries are richer or poorer
than some others, there is nothing OpenERP SA can do about this and I don't
blame you for having a pricing adapted to where your R&D cost is. I'm also
way more satisfied by the quality of the product now that the important R&D
is done again in Belgium vs the very poor quality of what what landing on
trunk say 2 years ago when it was more offshore (don't get me wrong it's
not a problem of country but of organization).

Now, yes I absolutely blame OpenERP SA for making life impossible to
partners located in poorer countries as if it was their own fault the
market will not afford their product. It's easy, the worst clashes between
OpenERP and its partners systematically happen in these countries that are
not so riches when OpenERP pressure the partners like if they could sell
like in northern economies.

IMHO that would be a lot more constructive to assume the situation and work
together instead of loosing so much energy in absolutely sterile commercial
negociations/fights where it seems market should auto-destruct totally like
it happened in Spain or Argentina already until OpenERP SA start
understanding a little part f what local partners where telling for years.

[...]

> 5/ localization & customization
>
> Odoo has a lot of huge advantages compared to traditional ERPs:
>   - higher scope: website, ecommerce, cubes analysis, CRM, ...
>   - better usability, faster implementation
>   - better flexibility: allows custom development and high level config
>
> Odoo also has a few disadvantages compared to traditional ERPs, the main
> one is the localization in some countries. (something we will fix for v9
> as we will massively invest in accounting l18n)
>

Again, I would like acts instead of just words. We are waiting for your
merge proposals you know...
But you know, before promising and promising, please just start listening
localization authors.
Last patches we needed in the core to get Brazilian localization supported
better took 3 months to be reviewed while it was absolutely trivial code,
before that it took 5 months... Such trivial merge proposals like
https://code.launchpad.net/~camptocamp/openobject-addons/trunk-refactor-po-merge-lep/+merge/216841
would make again dramatic improvement for localizations overriders but
again aren't properly prioritized.

So instead of making promises while in fact you are dropping around 10
official modules every year, I would love to see more concrete action that
doesn't cost much to your R&D but would bring a lot to OpenERP users in
countries with complex localizations.


> Not only we are not more expensive, but we are at least 2x to 3x
> cheaper. And, if you take the partner price 4.8€ per user and per app,
> we are 6x cheaper than the competition!
>

Again depends totally on the country. Here in Brazil, if I take OpenERP out
of the box say + localization the way it is currently it's not more useful
than national ERP's costing half or less the price of OpenERP'SA Enterprise
contract only (yes OpenERP is better on certain things, but it's still
inferior regarding many legal requirements companies just need).

The Brazilian localization weights like 1/2 of the server layer codebase
(around 20 000 lines of code and we are proud it's so compact still
https://github.com/openerpbrasil/l10n_br_core/tree/develop + OCA
dependencies + pysped +..). So without any money to maintain and develop
this code base, without 1st level support you are already 2 or 3 times more
expensive than the real competition! Sorry, but I don't see where the
business model of the partner fits here...

Again I don't blame you for this, but I would prefer OpenERP SA acknowledge
these facts instead of thinking guys like Akretion are bad partners and
that others would probably do better. Because so far, the others you
thought would do better promised you they would do better just because they
were absolutely unaware of how hard was the challenge, that means you
partnered with the most naive guys quite often (not always please don't
make me tell what I'm not telling) and theses guys didn't lasted not even
for a single year.

You know, Marcelo Bello is a good example, as he told in another post, he
first selected one of these partners promoted by OpenERP SA, the one
OpenERP SA was even believing would do a better "Certified Training
Partner" than us when they made OpenERP Account Manager believe they were
important fr the localization after they showed Igor a forked repo of our
work where they had quickly removed all our copyrights to make Igor believe
they authored the stuff.
https://github.com/proge/openerp-pt_br/commit/23fe26726836e58251f82cc17d011cb06135f7a6
But you see, no magic happened, they failed to deliver Marcelo's project
just as he came here to complain. So again, that would be cool your account
managers and commercial staff would be less naive and focus on developing
what works instead. I would certainly have to complain less about OpenERP
SA commercial policy if you did so. So we could be in quite a different
virtuous circle.

And this is not just about us Akretion no.
A similar situation happened in Argentina or Spain a few years ago.
Extremely skilled people such as NaNtic where commercially insulted by
OpenERP SA.
Instead my ex-employer was promoted Gold in Spain with no real skill in
this country at that time (sorry to have to say it).

Today Akretion is making OpenERP work in Brazil with a Catalan (that is in
Spain for people who don't know, although it's not the way they like to be
assimilated) company that 3 years ago, believed that OpenERP SA partner
recommendation.
Then what?
Of course they got their project initially failed by this partner in
Spain...
And then rescued by Minorissa and others.

Today their extension project in Brazil is being a success with us (in
Vitoria) but it's almost impossible to get them buy an Enterprise contract
because they have such a bad image of OpenERP SA because of what happened
in Spain with OpenERP SA partner recommendation that made them loose so
much much money...

So I mean, all that shit because OpenERP SA didn't want to negociate
properly with NaNtic or other initial pioneers of the Spanish localization
just like this is happening with us?

I mean enough is enough my friend. If you do or let do too much commercial
shit, things will certainly end up surfacing again and this is not a good
company strategy I believe.

I'm sure there should be many such story as Marcelo or that last company in
many countries.

When I see you'll now account only for partners new contract to rank them,
I cannot stop thinking this is an absolute time bomb for the sustainability
of the projects (it's impossible to acquire real ERP projects forever at
the same rate when you take the cost of maintaining them into account). I
mean real ERP projects, not just a rotation of SaaS users satisfied by a
CRM.


[...]
>
> The sustainability of every product is directly linked to it's ability
> to create a sustainable model where partners and publishers get enough
> revenues to grow their activities on the product.
>

Yes.
But sustainability is a matter of cost / benefit. In fact lot's of open
source product are better organized how they delegate things to their
community so that it cost them much less.
Tryton may not be better than OpenERP no. But still it's shows a product
can evolve a good deal of what OpenERP did with just a fraction of the
money by being better organized with its community (again not telling it's
better, overall just telling they are a lot more efficient at evolving the
product). Like may be Tryton is developing 4x slower than OpenERP. But for
how much less money? 100x less money spent? Talking about efficiency.

And again Fabien,
there are many open source products that are funded in Northern economies
but sell absolutely nothing in developing countries. If I take Compiere for
instance, they were selling a few contracts in the USA and Europe. But in
Brazil, as far as I know they were selling absolutely nothing and BTW this
is exactly because they didn't had a practical mode in Latin America that
Adempiere developed here (and in South East Asia). I doubt MySQL or MongoDB
are selling a lot in Brazil either for instance.

And even, you should consider that even in less rich economies, there is
corruption or even without corruption, there are still a few bigger
companies or national departments that may invest money on open source. But
let's say it's not the focus of OpenERP the last 2 years (nor was the focus
of small Akretion these days). I'm happy with the last WMS and framework
evolutions thoughs because that could also make OpenERP more viable for
bigger deployments though.


>
> This requires a lot of things like: having a great product allowing good
> service margins, a good price for the publisher, happy customers, etc.
>
> >      What kind of business puts potential clients in front of active
> > paying clients? The model is wrong wrong wrong.
>
> What's wrong is to have a pricing so cheap that it does not allow to
> sustain the development of the product, or too few customers because the
> product is not competitive. That's what killed some products.
>

Indeed. But again, you should consider you could cut R&D costs by 2 or 4
just by using better community work instead of ignoring it.
Yes, that means you couldn't promise to investors you own such a large part
of the Intellectual Property either. So that would mean less investment
capacity.
Yes that's a different model. But eventually it's more sustainable.

And there is not only the cost of R&D you know. So what will you do for the
guys that won't pay your Enterprise services or your SaaS offer?
You will spend on lawyers to fight around the Odoo trademark usage, you
will spend on Account Managers and their managers to try to spin the
markets to get partners bringing you money (or just making you believe they
will) take over the ones not using your services.

I mean, just like maintaining an Empire, like the roman one or the USA one,
all that infrastructure does have a certain cost...

If your take the extreme case of proprietary products like Microsoft,
Oracle or Apple, what % of their spending these guys do on marketing to
spin the market?
How much do they spend on lawyers and lobbying to try to break the
alternative?

I mean you have to be very careful not jumping in an auto destruction
spiral where every week the managers you named would make you believe that
the best solution is to increase these kind of spending to maintain your
editor power. Because eventually the spiral will keep accelerating and at
the end of the story, because the product is protected by the GNU AGPL
which is the social contract by which the community accepted contributing
to the project, the empire would collapse.



> >       If Odoo was a ready-to-use software then the model would make a
> > lot of sense. But they are ignoring the importance of localization &
> > customization. If I wanted off the shelf software I wouldn't bother
> > going open source.
>
> Our customers don't choose Odoo beause it's open source. They choose
> Odoo because it's better (products and/or servives of partners)
>

Depends. I believe OpenERP made most of its revenues through the partner
network and these partners certainly choose OpenERP because it is open
source.



> We should stop being frustrated of being open source. It's not because
> we are open source that we should be cheaper. The only thing that
> matters for a customer is to have a great product at an affordable price.
>

Agree.

This however depends again very much on the maturity of market where you
are working.
Akretion is active both in France and Brazil. I would say in France we have
no problem being payed a good hourly price (relatively to the economy)
because customers understand we are worth the money we charge. But instead
in Brazil, in the SMB market, this is almost impossible. When we announce
some hourly price, most companies believe their internal programmer would
do the same for cheaper. They don't envision that somebody with 10 years of
experience and 5 with OpenERP will probably require 20x less time to do the
project and do it right so it justify having a 3x higher hourly cost than
using the trainee they hired last month.
And IMHO, OpenERP marketing has not really been helping that you know. In
fact we are successful in France exactly because people don't believe
OpenERP SA marketing. That is sad but this is true.
You can read this again if you don't believe me
http://people.via.ecp.fr/~alexis/openerp/#conseils-fin


>
> [...]
>
> The part of the commission on Odoo Enterprise is usually lower than 4%
> of the revenue a partner take on a project. So, their motivation is not
> on the commission.
>

Again this depends totally on the project. Here i Brazil, the Enterprise
would often represent around 30% or 40% of what a partner would take on a
project. This is absolutely impossible.

Yes Akretion sold a few Enterprises in the past here. But the price was the
old price and negociated. AND Akretion was totally under selling its own
consulting hours to get the Enterprise sales happen.
This is also because by 2011 or 2012, we absolutely needed a better OpenEEP
so selling these Enterprises was a way to be compatible with the business
model we where envisioning with OpenERP SA.

So you see Marcelo, in a country like Brazil, the whole commission debate
is absolutely sterile because instead of taking a commission partners are
investing on their on to develop the OpenERP market! As for Akretion we did
95% of that localization codebase, that is an absolutely huge investment if
you convert this into money. So we certainly wouldn't let somebody tell
partner X is worth better than Akretion when he just paid may be 10k USD to
OpenERP SA when our investment in the OpenERP localization represents may
be 300k USD instead. So we also certainly sold some Enterprise contracts
not because it was profitable but just to protect these investments we made
at some points... It's quite a different thing you see and it's sad I'm now
forced to explain these sort of things.

But of course, Akretion selling Enterprise contract funded by their own
work in part don't scale at all, this is why we cannot hire very fast or
make new other projects very fast. Still the exact same thing happen for
the other companies of course.

I'm very disappointed OpenERP SA couldn't lead that kind of basic market
analysis.



>
> I may be wrong. I am open to discuss this during the community days.
>

Yeah sure. In any case I think the points I'm making here aren't really
new, so I'm not very optimistic things evolve here. I had told this to Marc
Laporte and you in person 2 years ago. Today things seem just worst as
Marcelo mentioned.


That being said, this is not such a big deal. As I said, it's absolutely
common to have open source companies sell in Northern economies and sell
nothing in emerging markets.

The only thing I would appreciate is commercial respect of such basic
economic realities so we still work together despite may be little economic
collaboration (at least that's probably better than nothing) instead of
forcing us to have to denounce OpenERP SA commercial policy loudly to
protect our business which I believe is not profitable to anybody.


Regards.

-- 
Raphaël Valyi
Founder and consultant
http://twitter.com/rvalyi <http://twitter.com/#!/rvalyi>
+55 21 3942-2434
www.akretion.com