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Olliance will be running a series of CEO Interviews throughout the year. I sat down with Brian Gentile, CEO of Jaspersoft ( www.jaspersoft.com ), to get his thoughts on Open Source software and current market trends. This is the first in a two part series with Brian where he shares his thoughts.

Part 1: A discussion on open source today – challenges and learnings for commercial Open Source vendors and customer CIOs.

Miriam – Some analysts believe 2010 will be a year of explosive growth for Open Source. What are your thoughts on the 2010?

Brian – Gartner recently issued an open source business intelligence report forecasting a 5-fold increase in the next three years. 2010 will be the third consecutive year where there will have been large jumps in the successful use of open source products; so yes, I am bullish about the up-coming year.

Above the infrastructure layer, more than ever open source will become necessary – more than acceptable . . . expected, mainstream and validated. It is important to distinguish between open source as an underlying infrastructure layer and the layers of software above that are more application like. This marks an important transition in the adoption and use of open source software.

Miriam – So you think that the Open Source B.I. space has moved out of the early adopter stage and is now moving to the top of the curve from a Crossing the Chasm perspective?

Brian – I would say it is early majority – it has crossed the chasm and is now in the early majority. That’s important socio-graphically, because now not just “Type A” customers (those companies and IT teams who see innovative information technology as the means to competitive advantage) are adopting, but “Type B” as well.

Miriam – How many years has it been for the Open Source B.I. segment in the market place – from when it started out in the marketplace to get to that point up the curve? Four years?

Brian – The earliest point would be late 2001 when the first mainstream open source BI project appeared, called JasperReports. Early users were developers that used this open source reporting engine and library. Then, I’d estimate that mainstream use of open source BI began in 2005, when Jaspersoft introduced the first full-fledged BI Server (JasperServer) and other vendors appeared as well.

Miriam – That’s part of cycle maturity, when multiple vendors are in the market. What about other segments above the infrastructure? What are the characteristics that you think would make it possible for another segment to become like Open Source BI?

Brian – Not all software sectors necessarily represent a good market for the open source model. There are characteristics that make certain sectors better for open source.

Miriam – What are they?

Brian – Firstly, the software sector has to be at a maturity level where you don’t have to explain what the software is, what it does, and why it is beneficial. Open source companies don’t have the time or money to educate. You won’t see successful open source companies in new software categories where you have to prove that the software is necessary.

Secondly, it has to be a big enough market where the volume needs of a commercial open source company can be met.

Thirdly, incumbent players should be leaving a portion of the market under-served or over-charged. If these three market characteristics are in place – it can be very fertile for an open source company to come in.

Miriam – What about the customer side? What are the attributes that you have to look at from the customer side in order to benefit from open source.

Brian – The early adopter market was a technical group. Technical audiences – the developers of the world, have historically consumed successful open source projects. In 2010, business users will more and more advocate using open source. It’s kind of like the early days of SaaS where end users said “I am not going to pay the internal IT prices for access to Siebel or Peoplesoft. I am going to use Salesforce because it is a better product and I can use it today not in 6 months.” The business benefits of open source are being widely recognized by business users who will pressure IT to use open source to benefit their business.

Miriam – The open source mantra has always been that the buyer and downloader of the product is technical. As it crosses over to the business side, is there a certain business function that is going to be more predisposed to come to the community, sign up, download, etc.

Brian – I don’t think so. I think that we are now technically savvy enough in every department to be able to do this. So, I think you’ll see pockets of business user adoption and endorsement across all functions in an organization.

Miriam – Even in sales? LOL?

Brian – Yes. There are big pockets everywhere and those pockets grow as the demographics in the workforce change. The most significant demographic shift of all time, at least in the western or developed economies, is underway. It is going to continue to have a dramatic effect on the technical skills of the individual knowledge worker.

Miriam – Jaspersoft is your first Open Source company as a CEO. What were some of the areas that you found critical? Lets start on the sales and marketing side. What are the unique challenges of the open source model from a sales and marketing perspective?

Brian – The biggest challenge is to recognize the value of the open source model and the community that forms over time – it requires patience. You must have an investment and operating model that allows you to get out there with a product in volume that is essentially free and solves some real business problem.

Sales and marketers want to sell something to everybody. Many are just not going to buy your product but they are going to use your product – this is discomforting to sales people. They have to be patient– because if they aren’t, you won’t have a successful open source model.

Secondly, you have to find clever ways to have that community collaborate with you on the product. Product development can’t be fully in charge of the features of the product and where it is going.Your development model must embrace that and take back contributions that originated with the community. That’s uncomfortable for everyone if you have never done it before but getting good at it is a distinction between successful and mediocre open source companies.

Miriam – Your second point is particularly interesting. Many organizations hit two walls – the first how to scale. Once people do want the commercial edition, it can become a people intensive business. How do you scale from 1 to 100 to 1,000? You also have to change the support and services model. Any insight around those challenges?

Brian – The bigger the community, the greater the need for scalable services. One must spend meaningful time trying to put in place mechanisms for community self support and knowledge-based services. So it has to be organic and scalable. There are absolutely acceptable distinctions between classes of services for a community user and commercial customers. Done correctly, it actually becomes a benefit to the P&L. Done incorrectly, it could sink a company.

Miriam – Lastly, how is product management different – you have a background in marketing and product management – you’ve done it both in a traditional company and an open source company. What are the critical success factors?

Brian – In a proprietary software company, the product management function is essentially a guardian of the secrets of where the product is going. The watchwords for open source companies are transparency, participation and collaboration. The product function owns transparency and collaboration. The beginning points for community development is where the website becomes an ideagora – a gathering place for swapping ideas. The product management function has to provide dialogue and the community has to be invited to engage. Using the ideagora, there is voting and dialogue about the direction of the product. The combination of these principles can create unparalleled value – again, if done correctly.

Miriam – So when we look forward to 2010, what do you see as the opportunities and challenges for Jaspersoft and for open source software market in general.

Brian – For 2010, we have five strategic company objectives. They are aligned with where we think the market is going. One of our five objectives is to diversify our revenue stream – ensuring a growing commercial contribution from Latin America, Asia Pacific, and Europe.

Miriam – So do you think 2010 will be easier in terms of the market and the economy – from a software sales perspective.

Brian - I think we will see continued recovery – and as we move through the year, we will pick up momentum. It won’t be a banner year – it will be a solid year but an important one to lead into even bigger growth in 2011.