Why Open Source Isn’t an Open-and-Shut Case for Startups
Startups use open source technology in order to be lean and release products faster, but this approach isn’t without its downsides. Although startups need to take risks and move quickly in order to establish themselves, they should also carefully consider whether using third-party cloud services, instead of relying on open source, is a smarter choice until they get up and running.
Every day, I work with startups who are trying to start off on the right foot by picking the best technical foundation for their company. Again and again, I hear the question, “Should we go open source?” Despite all the benefits and the open source success stories … for most of the engineers I advise, the answer isn’t that simple.
Open Source Is Cheap. Open Source Operations Are Expensive
SAP.iO is generally focused on smaller customers that SAP doesn’t traditionally serve. As such, the teams in the SAP.iO Venture Studio often need to find a maximally efficient tool while minimizing expenses.
Such a goal isn’t uncommon for early-stage companies in the startup ecosystem. Many of these startups use open source technology — and cost is usually the motivating factor.
Besides the lower price tag, open source software saves companies valuable development time and effort. This lets them focus on their core value proposition, and also get to market cheaper and more quickly.
At the same time, however, there are hidden costs surrounding open source technology. In the age of cloud computing, startups not only need to learn how to use software but also how to operate it. Developers need to invest time into open source projects in order to get up to speed, and the learning curve can be very steep.
The health of the project, and the support behind it, also must be taken into account. I recommend that startups look at a number of key indicators of the project’s ecosystem when deciding whether to use an open source project:
- How active is the project and how long has it been around? In most cases, of course, the more mature a project is and the higher level of activity, the better.
- Are major software companies relying on the same technology? Large corporations with deeper pockets can afford to hire employees who work full-time on strategic open source projects, and smart startups can ride on those coattails.
- Who is working on the project? Using a brand-new open source project with only one contributor is dangerous because it puts you at that person’s mercy. Projects that are more academic in nature probably won’t move as quickly as you’d like.
Speed Is Tipping the Scales
In the early phases of a startup, I recommend leveraging third-party cloud services instead of open source technology where possible. The primary goal of an early-stage startup should be hitting product/market fit as soon as you can. Only once you’ve shown the success and viability of your product, and are in the process of scaling, might it make sense to “in-source” the component.
Fortunately, these cloud services are generally usage-based. Since startups by definition don’t have many users, it’s relatively inexpensive to try out your various options.
Finding a company that hosts popular open source components such as MongoDB and PostgreSQL as a service is usually fairly straightforward. PaaS (platform as a service) providers — like Microsoft, Google and SAP — bundle together a number of these services, including higher-level application frameworks like Node.
In certain cases, it may still make sense to operate the component yourself. For example, I worked with a company that chose to operate PostgreSQL on an Amazon Web Services EC2 instance because they needed to customize the installation with a geospatial extension that wasn’t available in the hosted version.
Cost is another reason to forgo the hosted route. Companies like Zynga and Dropbox have publicly split with the Amazon cloud because it was more cost-effective to build their own custom solution, tailored to their specific workloads.
Whatever choice you decide on, I challenge startups to move faster than they may be comfortable with, and to consciously incur a manageable level of technical debt. Using third-party service providers or open source components are both good ways to move quickly and focus more on the value that you’re providing.
Steve Winkler is leading the engineering team in SAP.iO, aiming to grow a generation of revolutionary software businesses in the SAP ecosystem. His team creates several new businesses each year and drives them towards product-market fit in the most capitally efficient means possible.
