Sramana: What is the profile of the customers who were willing to purchase subscriptions?
Miguel Valdés-Faura: We wanted to focus on technical people in medium and large organizations. We believe that those are the people who will influence a purchase. We have kept that target today because that is the market that will purchase subscriptions. We have 600 paying customers from over 60 countries, and of that group 75% are medium or large organizations.
Sramana: How much are the subscribing for?
Miguel Valdés-Faura: The subscriptions are sold for 1 year at a time. Our pricing is based on the numbers of CPUs on a server. Typically when companies deploy new projects they do not deploy them on the same servers so they come back and purchase additional subscriptions.
Sramana: What is an average deal size?
Miguel Valdés-Faura: The very first project was between 10,000 and 30,000 dollars per year. That was a small amount, but they have done other projects since then. In one year you can sign a customer and upsell them three more times. In 12 months we can get three contracts and some of those later contracts will be 100,000 dollars annually or more.
This is one of the things that excite our investors. We have a lot of people using our software who can potentially become customers. Then, once they become customers chances are they will grow over time.
Sramana: What type of sales infrastructure do you need for a global sales process?
Miguel Valdés-Faura: That is one of the most difficult aspects of scaling an open source company. We have sales people dedicated to geographies. We started in Europe, then we moved to the US and South America. We also have priority two and three geographies and we have dedicated teams for those geographies.
China is a new geography for us. When we go there the first question we ask is if we have enough open source adoptions to look at that region. Then we look to see if the number of leads is sustainable. We hire a young sales guy, usually an inside sales guy. Most of our sales are done remotely so we typically do not meet our customers. We have a very defined process when it comes to opening a geography.
We use GoToMeeting or WebEx to do demos of the software. We start with young guys and then as we scale we start to add more senior people. We have found that if you try to hire experienced people from Oracle or other places they are not going to be successful. They don’t know how to sell small and grow. They target large deals up front and that is hard to do without a lot of reference accounts in similar industries. Regions need to be established before we can go after accounts like that. Our approach is to hire people and let them grow with us.