Thursday, February 28

Open source gets VC funding

$12M in a round of Series C funding by Benchmark Capital who has backed other open source companies like Red Hat, Zimbra, and MySQL. This makes a total of $26M of VC funding given to this US-based BI open source company.

Yes, the Pentaho group picks up another round of funding according to this Performance Guys post. The article suggests that open source is one of three disruptive technologies with Software as a Service and pre-loaded appliances being the others.

The question still remains. Can Pentaho, and really open source BI in general, compete with other on-premise vendors, such as Cognos, Business Objects, Microsoft, and Hyperion? According to the article, Pentaho reports "brisk" uptake. My take is they still need to continue converting the 3 million downloads into open source licenses (i.e. sales).

Pentaho has built a location intelligence dashboard mashup with Google Maps. And is working with Greenplum's Bizgres-based data warehousing appliance platform. So they are getting out there and integrating their products for a variety of revenue streams.

But what differentiates them enough from Cognos, BO, Microsoft, and Hyperion?

I guess the licensing costs could be significantly less. The flip side to low upfront costs is the backend support and how that support is perceived. Is there enough of a developer community to support customer implementations? Are there enough help desk and knowledge areas to give IT departments support when questions and issues arise?

Perhaps the open source BI play is in the small to mid-sized company range for now. I'm all for Pentaho and other open source BI companies as they bring competitiveness to the industry. And as they take on more market share, the proprietary vendors will be forced to adjust and improve. And that ultimately provides more choice and flexibility for customers.


Anonymous said...

Thanks for the info. I bookmarked it for our BI in our six sigma training program.

Anonymous said...

I see the support question mark put out there for open source all the time. That's really just a fear tactic for the non-technical buyer.
I had a problem with MS Power Point 2007 crashing just today. How much support did I get? None. Did we pay for it, yes, but it just doesn't make a difference in daily usage. Same thing for server side software. For the most part its like a warranty. They hope you never use it and if you really need it, you need pay extra in most cases anyway to get the problem resolved.