Whereas “Content Management” (ECM, WCM, portal) software business is, at least so far, mainly (of course not exclusively) driven by North American or European companies, the strong potential of emerging markets such as Brazil, India (I mean for its local market), China or others look very obvious to all.

Wikipedia is classifying the markets in two kinds: the Newly Industrialized countries, and the Developing countries. I found these definitions arguable. E.g., Argentina was the 2^nd richest country in 1945, so not exactly a “Developping Country” but anyway, whatever the definition, they are all emerging markets.

And these countries are never the last ones to innovate, so we could expect much more in a near future. Some open source or not open source vendors have been recently quite successful and much more are likely to grow up there. That said, and as already mentioned by John Newton, or others, the fast growing economies don’t look so bright for the traditional software business or at least, far less from what it should. E.g., read page 9 about ECM licence for Open Text in FY Q1 2010 (ends 30/09/09) here (“[ECM Licence] was down […] a little bit in Australia and Asia-Pac a little bit.”) or the sample of new clients of Autonomy for Q3 2009, page 3, (how many are not located in North America / Western Europe?). Further more, when it comes to commercial open source, I don’t see so many obvious successes either. I don’t say there are none but I don’t see anything dramatic or consistent with the dynamism of these economies. To make a long story short, the open source is definitively a key driver for them but the commercial open source (COSS) must adapt itself dramatically to be really successful there.

Some will argue rightfully that several (free) open source software are already extremely popular there, fair enough, but it does not mean that the existing offer can answer all requirements. I am more believing these buoyant markets have adopted what was existing but I am quite sure that they will also require commercially supported open source software like anywhere and for the well-known reasons.

Some are raising the point that the model is more related to services than licences (I am not so sure), some are mentioning the necessity to adapt the commercial offer to these local markets (well, we always have to adapt to any specific market and every market is specific so I don’t see anything specific there). Actually I believe the issue is more to be on two sides, but definitively not about the recipes “how to grow in fast growing economies markets”: the first one is the ability to deliver what these markets are looking for in terms of product, services, and pricing and the second one is the ability to invest into them as a key priority for the company’s growth strategy. The first one is basically saying you need to organize your company for these markets (which are not alike others as usual). The second point means it may not be trivial and can even be antagonist with other priorities for your existing markets, so you’d better believe in what you are doing. Both are saying you are aligning the whole company for this goal: becoming a global player, in particular being a global player for the emerging countries. I may be wrong, but I definitively don’t believe you can manage both markets classic/emerging in parallel but in a quite well integrated way.

Of course you need to have the people able to manage such markets, even more important you need to build a consistent strategy to set up a global growth for these markets and to link it to your global company growth strategy as, obviously, “the old Europe” and the “falling Dollar country” will stay for months if not years the main markets of the COSS for most of us.

One of the biggest challenges seems to me the return on investments which are unlikely to come so quickly, as far as I know. Not that you won’t get return on them, but they are obviously either better ways to invest your money as a COSS or it won’t pay as much as it should at the beginning. Both strategies are causing troubles for the different types of COSS companies. Those bootstrapped need to invest wisely as their money is scarce, those VC backed up need to get ROI within months or if not within no more than typically a couple of years. It won’t prevent both to invest into these markets, but it will not help to make them growing dramatically and at the level it should. More important, the fast growing markets are not homogeneous, but rather the opposite, and what works for Brazil won’t work necessarily for India. However, it seems quite obvious for this new decade to bet on those who believe into these markets.

Some analysts like to say: “We should not really care about corporate assets as a web project just last usually no more than three years so that’s not the point to focus at.”. Whereas sometimes true, I like to disagree as quite a few of our clients – if not the majority – have a much longer timeframe either because they want it, or because they need it. But I am not an analyst, I am just a software vendor, and admit my vision might be by definition limited. But that’s mine and it looks to me that investing into a technology designed and organised to work for the most promising markets will mean something when it comes to chose a software for a corporate project such as a global intranet, global corporate websites and other strategic web projects. Right now the point seems to be still very secondary, I am just wondering how long it will remain so. How long can you still be considered a “leader” whereas your commercial footprint stays weak into these markets?

If you want to share information, visions or trends about commercial open source and fast growing economies, I would love to hear from you. I have my thoughts and my experience, but I believe the road to be wide opened and quite long.

Speaking about Web, Enterprise or “whatever letter” Content Management software, some like to say the COSS was one of big new things of the last decade. Will this one be the one of these fast growing markets? What do you think?
Happy New Decade to all!

Some additional readings:

Open Source Emerging markets, a few points
Involving the Indian software services industry in the free and open source software world
Open Source in China
Top 5 emerging markets industry guide
Where is open source activity by Redhat
Emerging markets and MySQL

"Newly Industrialized Countries" (Source: Wikipedia) and "Developing Countries" (Source: Wikipedia)

   

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