I’d like to hear more about the nuances found during the Resonance research on OpenLMIS. And what insights would be useful for the larger digital public goods community to know about sustainability for open source systems?
Amanda, thank you for posting the slides and webinar recording. As was mentioned during the webinar, over the course of 13 months Resonance worked with the Bill & Melinda Gates Foundation, the United States Agency for International Development, VillageReach, DIAL, and other OpenLMIS partners to explore business models that would allow OpenLMIS to operate without donor funding. This involved explorations of the current customer base and donor-driven funding model; a feasibility analysis of adjacent markets and product offerings; and an assessment of multi-stakeholder partnerships.
While OpenLMIS will have a distinct pathway to sustainability, open source global good platforms may also find valuable insights and conclusions from this work. I’ve listed below five tenets necessary for OpenLMIS to move to a sustainable future state that may be useful for other open source systems on their path to sustainability:
Understand the value of the product – At the outset of sustainability future state planning, a global goods community needs to understand their product’s unique value proposition to be able to successfully determine viability of a particular business model or valuation during partner discussions. Resonance supported this task by interviewing partners and stakeholders, facilitating discussions with community members, and determining customer willingness to pay.
Diversify the customer base and revenue – A key pillar of sustainability is to determine the viability of a commercial customer base that will pay for the product. For OpenLMIS, Resonance recommended pursuing private health providers in emerging markets (e.g., clinic networks, hospitals, and pharmacies), as their needs are similar to current public sector health customers, suggesting an opportunity to leverage OpenLMIS’s current feature set without requiring significant additional investment in product development. Opportunities for other global goods could include adjacent customer segments, added product features, or additive offerings (e.g., trainings).
Find the right organizational structure – The right organizational structure, including the housing, management, and stewardship of the software, will allow a platform to most effectively transition into commercial viability. For OpenLMIS, partnering with a private sector entity to transition software and stewardship is the preferred option because of improved economies of scale in software development and sales and alignment with current partner organizations’ agendas and broader market trends. Other structural options for OpenLMIS included creating an independent entity and partnering with other global goods under one umbrella organization.
Switch project implementations to a paid model – In keeping with Digital Square’s standards for global goods, which encourage country-led and country-managed digital health systems, Resonance recommended that OpenLMIS transition current public health customers from a free, donor-funded model, to a partly paid model based on readiness and maturity. Such payments would not only encourage local ownership but would also support OpenLMIS sustainability. The payments would initially be borne by USAID-funded implementers with the expectation that host governments and local partners would take over the payments over time.
Develop strategic and business development partnerships – Open source communities are built on the notion that different organizations with complementary resources are greater than the sum of their parts, enabling stronger public health systems in low- and middle-income countries. Global goods can bolster their communities by adding strategic and business development commercial partners. Strategic, or technical, partners provide financial and non-financial resources, guidance, and expertise, while business development, or channel partners will unlock customer relationships through a formal revenue sharing agreement.
Ultimately, as OpenLMIS Community Manager Rebecca Alban stated, there is no one-size-fits-all approach to achieving sustainability for open source systems. It is important to pool resources, create efficiencies, and ultimately work together to solve these challenges. Thank you to the Open Source Center for providing a platform to hold these important discussions.
These recommendations that came from a deep evaluation of the sustainability possibilities are relevant not just for OpenLMIS, but for all of the Global Goods. It is our prerogative to plan for the long term resiliency of critical software. Taking the time to map out the possible pathways a project may take is the important first step in long term sustainability. The challenges are far more than just solving the “who pays for it” challenge. The Open Source Center works with projects to think about the following 5 cornerstones of sustainability:
Legal Fiscal Sponsor - A legal entity to hold IP, facilitate funding, etc.
Primary Maintainer - An organization or individual with the primary role of leading community management, product roadmap, governance, etc.
Access to Human Capital - The skilled resources to build and maintain the core software and implementations
Access to Funding - Staple sources of funds to support core product development
Community Governance - Robust community governance
These are just a starting point. Having a plan for sustainability is essential. Let’s keep this conversation going.
Thanks for this important discussion! I have a few ideas for topics at upcoming webinars to keep the conversation going:
1. Examine Open Source revenue models with case studies. The DIAL OSC presentation showed a grid of many revenue sources (below). It would be great to look at a sampling of Global Goods and what mix of revenue they have each used to sustain their project.
2. Drill into dual-license and open-core models. The PCMT project, a new global good, is based on Akeneo Community Edition, but Akeneo also has a paid Enterprise Edition. Similarly, OpenLMIS is considering having some modules or features be paid in order to serve private health care customers while keeping the current core functionality open source. Other Global Goods are also considering this, and it would be great to share and discuss examples.
3. Talk about the Open Standards / Open Data / Open Source / Open Innovation part of the Principles for Digital Development. How are different projects interpreting and enacting that principle? This can include looking at projects that are proprietary or partially open-source that are used in global health and global development.
Also, the conversation will continue at this upcoming event:
What Does It Really Cost to Develop Global Digital Health Goods?
On 27 Feb 2020, this Global Digital Health Network event includes presenters from USAID, OpenMRS, CommCare and iHRIS: