The Dokeos Business Model
Many people wonder how the release of an Open Source software can participate in a business model and generate profits.
Some good articles delve into the economics of Open Source. Eric S. Raymond initiated the reflection in The Magic Cauldron, 1999. And Bruce Perens completed the analysis in The Emerging Economic Paradigm of Open Source, 2005.
Being an Open Source software publisher since 2004, Dokeos belongs to this History. Here is a description of its business model.
The 5 keywords of the Dokeos Business Model are:
- The product is sold on a SaaS mode, adding the value of a service (maintenance, support and hosting) on top of the software layer;
- Dokeos is offered in 3 versions: FREE, PRO and MEDICAL. The two paying versions add features and service, where Dokeos FREE serves an important community that generates in return both development, support and marketing;
- This marketing generates an important traffic on the Dokeos website and is the starting point of commercial requests that are forwarded to a network of local partners;
- Support for clients is provided on a professional basis with a guarantee of quality, due respect of deadlines and a good communication;
- New developments, including both clients developments and community efforts, are reinjected in the products through a control filter that focusses on usability, stability, security, future maintenance costs and modularity.
Once the dynamics of a wide community and the volume of professional support generate an acceptable quantity and quality of new developments,
the model enters into a virtuous circle that attracts more and more users that will lead to additional developments and the ecosystem becomes self- sustainable.
In 2008, Dokeos sales grew of 12%. The company generated a 16% Operating Profit and the users basis increased of almost 100%. So, yes, Open Source software publishing can be both an exciting intellectual challenge and a profitable activity.