Narkhede: Confluent probably would have failed if it started as SaaS-only
Neha Narkhede · Winning with open and closed source products | Neha Narkhede (Co-founder at Confluent and Oscilar) · Dec 8, 2023 · at 54:04
Neha Narkhede evaluates whether Confluent could have launched purely as a cloud SaaS company rather than starting with an on-premises software offering.
0:00 / 0:47exact quote · 47.2s
▶ Watch the full episode on YouTube → 720p mp4 · rendered on demand · StarZero watermark
“Would it have just been feasible if we started with a SaaS only offering? And the answer is probably not because, you know, one of the most important things an open source company needs to do is quickly establish yourself as the market leader, quickly establish yourself as the only real company you need to go with if you wanted that open source product. So, which means you need to As quickly as possible, gather the existing user base and convert them. And, you know, the existing upmarket user base was on premises. So we would have lost the opportunity of converting a really important user base in the early days, would definitely have still converted them years down the line, but it ran the risk of losing the space to someone else who came and addressed that part of the market.”
quote is from the automated transcript, cleaned for reading: filler sounds and stutters are removed, nothing is rephrased. names can be misheard (the analysis reads context, assessments check outside sources). how →
More from Neha Narkhede
Narkhede: Confluent ignored narrow ICPs to capture the broad Kafka base
“Kafka, you know, that was one of the reasons why we couldn't or we didn't sort of narrowly focus on an ICP like traditional companies do for good reason. It was because, you know, the Kafka adoption base was so broad and for Confluent to quickly convert those …”
Narkhede: Commercial open-source requires all project creators to found together
“For the success of an open source company, all the creators should be part of it. And when that doesn't happen, you have two companies and they're competing on things they shouldn't be competing on, which mostly comes down to pricing and it's just a race to th…”
Narkhede: Confluent chose not to separate on-prem and cloud sales teams
“We actually decided to not split it. And that was because we ultimately wanted to transition to a cloud first business. So we put in a, instead a lot of thought and a lot of investment in sales enablement you know, internal education of why this is important, …”
Narkhede: Kafka was used by 50% of Fortune 500 when Confluent launched
“Confluent kind of started with a proven technology that was used at, you know, roughly 50% of Fortune 500 companies at that point in time.”
Narkhede: Transitioning enterprise sales to consumption models is the hardest challenge
“Sales was just a whole different, you know, dynamic. It was The most difficult one to solve for because in the early days, you know, if you're offering a software product, you have the traditional salespeople who are used to selling a subscription-based softwa…”
Narkhede: Confluent relicensed add-ons to stop cloud vendors reselling managed services
“So we introduced value-added offerings like stream processing, KSQL, under licenses that were similar, very similar in spirit to the open source friendly Apache two dot O, but these licenses had specific provisions that prevented other entities from just offer…”