Microsoft-based consultancy builds business on open source software

R2integrated (R2i) is a Microsoft shop that has discovered how well open source software and communities can build a solid business. Principal Chris Chodnicki says it was a customer request that turned the technology consultancy toward DotNetNuke (DNN), an open source Web application framework.

With more than 440,000 users, DNN is one of the largest Windows-based open source project in the world. The ASP.Net-based source code is available under the BSD license, requiring only that credit be given to the DNN community. R2i began using and contributing to DNN about a year ago after Snyder’s of Hanover asked the company to consider using DNN to build Snyder’s corporate intranet. Since then, “We went from this little five-man company to 50 employees, all due to the alignment with this open source product.”

Chodnicki believed early on that R2i could somehow sustain a business with the interest created by the community surrounding DNN. Like most open source projects, it had a lot of potential to be a money-saving solution, but uptake was lower than it could have been because of potential clients’ perception of lack of support. A solid company behind the project was the missing ingredient, Chodnicki thought.

R2i began offering DNN to its clients, and expanding its functionality and offering some of that added usefulness back to the community. “We found that the more you give, the more you get back,” Chodnicki says. “We did certain things to contribute to the betterment of the community.”

But Chodnicki discovered that balancing community with the good of the company was a challenge. “We are kind of riding both sides of the fence — we’re a service provider as well as a production company. In order to do both, we have different business units and different practices.”

Chodnicki says community expectations have complicated things. “In this world, modules are expected to be free or at least inexpensive. Handling that expectation from strictly a profit and loss standpoint is a challenge. Many of our customers associate open source with free services, free enhancements, and free extensions. So it’s about figuring out our internal model in such a way that everybody’s happy. It’s a difficult thing to do. But we’ve matured in that area and I think we’re close to having it down.” To that end, R2i is getting close to releasing a large portion of its in-house proprietary code base as open source, while still offering closed-source DNN modules like ListX or proprietary skins like Connect.

Another challenge that has come as a result of integrating open source software into the company’s business model has been figuring out a target market. “We have a wide variety of people contacting us with projects. We’d love to be able to help them all out,” Chodnicki says. “We recognized early on that there were a lot of people associated with this project that were literally the guys in the garage or kids in the dorm room, but that we could take this on seriously as a viable business and properly support it” for the enterprise. Today, R2i supports DNN implementations for customers like Texas Instruments, Gemstar TV Guide, and the National Security Agency.

Chodnicki says the biggest benefit to R2i of adopting open source software has been the increased visibility. “Our radar screen is no longer just local,” he says. “We had a client base in Maryland, DC, and Virginia, but now the world is our oyster. We have clients all over the world now.”

Chodnicki says it is important to realize that it takes time to build out an infrastructure to support an open source project. “To do it right, it is going to take more time than you would anticipate. It has taken a Herculean effort to have the appropriate support, the appropriate infrastructure to handle requests.” On the other hand, Chodnicki says, the experience in the community is an invaluable resource. “Most of the people are approachable and very willing to take some time and offer advice. I have picked the brains of some influential people in this open source community, and there was a wealth of information given to me that was very useful. [Because of that,] I didn’t make nearly as many mistakes as I could have.”