In the article "A Primer on Europe for US-Based Open Source Communities and Vendors," Sandro Groganz, founder of InitMarketing and an acknowledged expert in the field of Open Source marketing, outlines the differences in open source adoption levels between the US and Europe in order to help open source software vendors develop strategies to bridge the gap and begin testing and developing new markets and communities within Europe.
The main focus of Groganz's article is on providing facts and sharing experiences that allow one to understand the European IT market. In detail, the article concentrates on:
- Comparing the economies and open source software adoption rates in the EU and US
- Understanding societies in the EU and the role open source software plays
The information covered by Groganz applies to member states of the European Union as well as closely associated states such as Norway and Switzerland. The article also glances at open source in the Eastern European states.
According to Groganz, Europe leads the world in open source software adoption and development. Open source solutions have greater market share in Europe than in the rest of the world, both on the server and the desktop. More open source developers live in Europe than on any other continent including North America. Only 18% of the developers on SourceForge live in the United States, while 33% live in the European Union (EU), he notes. European firms that contribute to open source projects account for about 565,000 jobs and have combined annual revenues of over €260 billion ($350 billion).
The cultural diversity of Europe impacts the type of business and community engagements available in various regions. In short, Europe is not a single market for open source, Groganz writes. Instead, open source adoption seems to be driven by commercial engagements in Northern Europe, while Southern and Eastern Europe is characterized by community-driven engagements.
Concerning the sales channel, Northern Europe seems to prefer direct sales — especially the UK. There, customers want to buy the product rather than services, he reports. At least in Germany, SMEs are fine with having system integrators implement projects, but large enterprises want to include the open source vendor in negotiations and have the vendor guarantee the success of the project, recommend system integrators, and perhaps even lead the project. In Italy and Spain, economic buyers might outright reject vendors and commercial editions of products because open source software is supposed to be available at no cost. For those two countries, the market prefers to buy services from system integrators.
For open source software vendors, Groganz infers, this means that commercial whole-product offerings and direct sales tactics could well work in Northern European countries, while in Southern and Eastern Europe they should leverage community development tactics and build a partner network. There is also the mushy middle of mid-Europe, such as Germany, where the appropriate sales or marketing approach depends on the project volume and type of customer.
Given the accelerated rate of adoption in Europe of open source solutions, vendors are finding the region to be a "gold mine," Groganz asserts. He points out, however, that the united market of the European Union is actually a fractured market that needs to be approached accordingly. Otherwise, community building efforts will run dry, marketing communications will make a company look outlandish, and sales will bounce off cultural barriers, he contends.
Despite its being a fractured market, Europe does have regional similarities that make the market less daunting to US-based businesses and communities seeking to gain a foothold in the EU. Two of these similarities will ultimately have to be addressed in any go-to-market strategy employed by US-based open source vendors casting an eye towards Europe:
- Major languages equal major ICT markets: English, German, and French are widely spoken within the EU as mother tongues, second languages, and foreign languages. Roughly speaking, these three languages also correlate with the most prosperous ICT regions within the EU.
- Two types of engagements: While Northern Europe prefers direct sales, the South prefers the partner channel. Customers in the center of the EU want to be able to either work directly with the vendor, with partners, or both.
In an upcoming article Groganz announces his intention to take a look at how to test and develop new markets in Europe with effective outreach through marketing, community development, PR, and more, thus showcasing how open source offers companies and organizations a highly cost-effective route into international markets.
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