Profitability first, then open source, works for Projity

Projity is a company that provides two alternatives to Microsoft’s popular Project application. Project-On-Demand is software-as-a-service (SAAS) code that runs in any browser and is available via a monthly subscription. OpenProj is a desktop version of the application that is built on Java and is licensed with the Common Public Attribution License (CPAL). Though Projity only recently “open sourced” its project management application, CEO Marc O’Brien says that the company’s plan “the entire time” was to eventually do just that.

O’Brien has been in project management software for a long time. In the early ’90s, he worked for Scitor, a mainframe-based project management company. By the mid-’90s he’d launched his own company, called WebProject, which was acquired by Novient in 2000. “After that, we set out to offer an open source alternative to Project. There’s a global opportunity there. Project is $1,000 a copy — the highest profit margin software for Microsoft, and they continue to raise the price.

“We started Projity as SAAS, but as we spoke with leaders in the open source community, a lot of people were pushing us to release the code as open source. We needed to get the SAAS solution and our company in order first.” O’Brien says the open source business model is “wonderful, an opportunity to get the product to people all over the world.” But you can’t launch a company that way, he says. “One of the big misconceptions is that you can just open source anything at any level of quality and have success. It’s simply not the case. The open source community has matured such that you need robust software that’s equivalent to commercial offerings. If you try to do too many things you’re going to fail. We could have open sourced the software right away, but there would have been significant bugs.”

Now that OpenProj has opened up, interest is high. “We’re averaging a download every 23 seconds around the clock,” O’Brien says. “The biggest challenge we have had is maintaining the conviction that open source, free software is a very good idea. You can imagine that as a commercial vendor, yes, you’re going to cannibalize some sales.” But O’Brien says there were never any technical hurdles. “We had a benefit in that we knew ahead of time we wanted to be open source, so our technical team was very careful. There’s a lot of proprietary libraries we could have used that would have accelerated our development time, and we’re not using those. There’s a lot of tools we chose not to use because they weren’t open source. Occasionally, we had a hard time finding a good replacement. For example, a core part of project management is the Gantt chart. The open source display software just wasn’t at a level from a performance standpoint, so we had to write our own.”

O’Brien says the biggest benefit to opening up Projity has been “branding and brand awareness. We do not have an enormous sales force in China, but we’ve got people translating us into Chinese. We just had a customer in Uzbekistan sign up. The only reason they even found us was our open source solutions. It’s the evolving work of open source. You can be disruptive, but you can also have a path to profitability out of that.”