Case Studies on African FLOSS Business Models

1. Provided under a Creative
Commons Attribution-Share
Alike 3.0 Germany License /
Copyright: FOSSFA & InWEnt
Module 2: African FLOSS Business Models Case Studies
for ict@innovation, FOSSFA/InWEnt
Version / Date: 14 - 25 September, 2009
University of Dar es Salaam
Dar es Salaam, Republic of Tanzania
Sulayman K. Sowe
[sowe@merit.unu.edu]
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S. K. Sowe. UNU-MERIT: Module 2: African FLOSS Business Models Case Studies

2. TOC
The learning objectives for Module 2 are as follows:
1. To understand the various services and solutions offered by ICT-Based SMEs in
Africa.
2. To know the types of FLOSS clientele and how their issues can be addressed in
the Africa context.
3. To see the advantages and challenges FLOSS can present to clients and start-
up businesses.
4. To understand barriers of entry into FLOSS business in Africa.
5. To know some profitable service sectors.
6. To understand the importance of networking with FLOSS strategic partners and
communities.
7. To understand what the FLOSS business risks are and how to mitigate them.
8. To identify African companies using FLOSS business models in their business.
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S. K. Sowe. UNU-MERIT: Module 2: African FLOSS Business Models Case Studies

3. Building African FLOSS business models
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S. K. Sowe. UNU-MERIT: Module 2: African FLOSS Business Models Case Studies

4. Case Studies Methodology
• Exploratory study of companies online
• Introductory email of intent to participate
• Email set of questions (See “template“, page 32)
• Outlook and Experience report
• Revenue generation
• Service line and FLOSS motivation
• Lessons learnt....will this work for me?
• Follow-ups
• Compile cases
– Discuss and refine cases
– Add relevant cases to broaden scope 4
S. K. Sowe. UNU-MERIT: Module 2: African FLOSS Business Models Case Studies

5. Geographical Distribution of Module 2 Case Studies
Amest Santim Systems PLC Ltd.
Linux Solutions Ltd.
Future Soft Resources Nigeria Ltd.
OpenWorld Ltd.
CENFOSS Ltd.
GIS GlobalImage (PTY) Ltd.
Linux Holding (PTY) Ltd.
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S. K. Sowe. UNU-MERIT: Module 2: African FLOSS Business Models Case Studies

6. TASK 1
List 2 ICT-Based SMEs doing
business in FLOSS solutions
and Services
• Country...........................
• Company........................
• Website...........................
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S. K. Sowe. UNU-MERIT: Module 2: African FLOSS Business Models Case Studies

7. Module 2.1:- OpenWorld - Kenya
• Background
– Since 2004, Employs 7
– Setup through personal initiative
• Business Focus
– Consultancy & Training,
– Software Development & Support
• Lessons learnt
– Regular workshops & Invited talks,
– try the untested & do things differently
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S. K. Sowe. UNU-MERIT: Module 2: African FLOSS Business Models Case Studies

8. Module 2.2:- GIS GlobalImage – South Africa
• Background
– Since 2000, Employs 17 (5 are directors)
– Merger of 2/more other companies
• Business Focus
– GIS Software Development, Sales, distribution and Support,
– Hybrid FOSS business model
• Lessons learnt
– Partnership with companies and educational Institutions,
– Build profile online, Network, workshops, Invited talks,
– Customize GUI only.
– Forecasts
» move to web-based solutions
» Other markets, eg mobile
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S. K. Sowe. UNU-MERIT: Module 2: African FLOSS Business Models Case Studies

9. Module 2.3:- Future Software Resources Nigeria Ltd.
• Background
– Established since 1998 but only active in 2008
– Employs 5, partners in UK/USA
• Business Focus
– Web-design and hosting
– E-commerce, Ads
• Lessons learnt
– Family & friends can start a business, FLOSS to keep cost down
– Outsourcing, consulting,
– Get FLOSS person in company
– Involve FLOSS communities
– Donate when you can
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S. K. Sowe. UNU-MERIT: Module 2: African FLOSS Business Models Case Studies

10. Module 2.4:- Linux Holding – South Africa
• Background
– Since 2003, Employs 9
– Setup through personal initiative
• Business Focus
– Linux-based training (LPI approved)
• Individuals and Companies in South/Eastern African
• Lessons learnt
– Surveys to gather customer & training needs
– Strategic plan; expanding incrementally
– Need to know
• Local market, business laws
• Look at what others are doing
– Offer quality service
– FLOSS is 'free' but services NOT 10
S. K. Sowe. UNU-MERIT: Module 2: African FLOSS Business Models Case Studies

11. Module 2.5:- Linux Solutions - Uganda
• Background
– Since 2000, Employs 10 (3 FLOSS experts)
– FLOSS Business & Advocacy
• Business Focus
– Tech support, Consultancy, Software development, Networking
– Hardware sales (GNU/Linux pre-installed)
• Lessons learnt
– Advocacy agend works, Educate your clients
– Your business cant survive on FLOSS alone! Diversify! diversify!
– Problems with start-up capital. Private sectors as an option
– Governments & contracts/bids
• Biggest customer, poor paying habits
• Consider private sector – more focused? good paying habits?
– Does it work for me? Localization!!! think 2wise
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S. K. Sowe. UNU-MERIT: Module 2: African FLOSS Business Models Case Studies

12. Module 2.6:- Amest Santim Systems- Ethiopia
• Background
– Since 2005, Employs 5
– FLOSS business at home!!!
• Business Focus
– Software Development, training
– Web-design/hosting, domain registration
– Maintenance & consultancy
• Lessons learnt
– Minimal start-up cost (2000ETB~200$)
– Products & services you are good at
– Tailoring product to client needs (consult and discuss)
– Creativity, flexibility, creativity
– Go for bids with “big boys“ - lessons to be learnt, be bold.
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S. K. Sowe. UNU-MERIT: Module 2: African FLOSS Business Models Case Studies

13. Module 2.7:- CENFOSS - Mozambique
• Background
– Since 2006, Employs 12
– 1st come - 1st have
• Business Focus
– Server configuration, software Development
– Domain registration, network monitoring
– Training & Support
• Lessons learnt
– Main if not only FLOSS training and solution provider
– Less or no competition
– Big customers
– Government, private sector, NGOs, Univ. Telecom, Banks
– External FLOSS partners (CodeWeaver, Wine)
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S. K. Sowe. UNU-MERIT: Module 2: African FLOSS Business Models Case Studies

14. Q&A
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S. K. Sowe. UNU-MERIT: Module 2: African FLOSS Business Models Case Studies

15. TASK 2
• Group work
– For each case study, discuss and list
1.FLOSS Business Strengths
2.FLOSS Business Weaknesses
3.Opportunities for your FLOSS Business Strategy
4.Room for Improvements
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S. K. Sowe. UNU-MERIT: Module 2: African FLOSS Business Models Case Studies

16. Taxonomy of FLOSS Business Models
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S. K. Sowe. UNU-MERIT: Module 2: African FLOSS Business Models Case Studies

17. Taxonomy of African FLOSS Business Models
SS = Software Selection, INS= Installation, INT= Integration, TCERT= Technical Certification,
LCERT= Legal Certification, TR= Training, MASC= Maintenance and Support Contracts,
MION= Migration from old to new systems
Company SS INS INT TCERT LCERT TR MASC MION
OpenWorld Yes Yes Yes NA NA Yes Yes NA
Global Image Ltd Yes Yes Yes NA NA Yes Yes Yes
Future Software Resources Yes Yes NA NA NA Yes NA NA
Linux Holdings NA Yes NA NA NA Yes NA NA
Linux Solutions NA Yes NA NA NA Yes Yes NA
Amest Santim Systems PLC Yes Yes Yes NA NA Yes Yes Yes
CENFOSS Yes Yes Yes NA NA Yes Yes Yes
Percentage in module 71.45% 100% 57.1% 0% 0% 100% 71.4% 42.8%
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S. K. Sowe. UNU-MERIT: Module 2: African FLOSS Business Models Case Studies

18. TASK 3
Discussion
What is your FLOSS Business?
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S. K. Sowe. UNU-MERIT: Module 2: African FLOSS Business Models Case Studies

19. “New“ African Business Models
• FLOSS packaging
• FOSSCDs (www.fosscds.co.za) forge business.
• Pack schema....vs freedom toasters, check opencafe.
• FLOSS marketing
• Build a FLOSS repo of goods and services
• FLOSS companies can use and benefit from incubator
• Others
• Provide FLOSS documentation
• FLOSS Strategic management,
• Policy advise, legacy issues for start-up companies
• Mobile tech &
• Data archiving, storage
• Data processing
– Accounting, survey, tax and census data analysis
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S. K. Sowe. UNU-MERIT: Module 2: African FLOSS Business Models Case Studies

20. WHAT IS YOUR FLOSS
BUSINESS MODEL?
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S. K. Sowe. UNU-MERIT: Module 2: African FLOSS Business Models Case Studies

21. About ict@innovation
The ict@innovation programme builds capacities in African small and medium ICT enterprises to make a business
with Free and Open Source Software (FOSS). ict@innovation aims to encourage the growth of African ICT
industries, particularly in Southern and East Africa, through three main actions: spreading FOSS business models
for enterprises in Africa, fostering FOSS certification and supporting innovative local FOSS applications for social
and economic development. ict@innovation is a partnership of FOSSFA (Free Software and Open Source
Foundation for Africa) and InWEnt - Capacity Building International (Germany). The programme focuses on Free
and Open Source Software (FOSS) as a key technology to drive innovation, add local value and create sustainable
and affordable ICT-solutions.
With financial support by: the German Federal Ministry for Economic Cooperation and Development (BMZ) and
the Open Society Initiative for Southern Africa (OSISA).
License: Creative Commons Attribution-Share Alike 3.0 Germany
Copyright for this version: FOSSFA & InWEnt
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S. K. Sowe. UNU-MERIT: Module 2: African FLOSS Business Models Case Studies