First, I want to give a big thank-you to Bennie Grant, who has been our Interim CEO over the past few months. Stepping into the CEO role is never easy — and doing it on an interim basis can be even tougher. Bennie, we’re grateful for the way you’ve helped steer us through this transition and kept things moving forward when there was a great deal of uncertainty and flux in play.  I am grateful Bennie has agreed to return to his COO role, and appreciate all the leadership stability he provides us with.
Now, onto Peter Farkas — I’m genuinely excited that our Board has chosen Peter as Percona’s new CEO. There are many reasons for my excitement, and I’d love to share a few of them with you.

Technical
I’ve come to believe that if a company wants to be a real thought leader in its technology ecosystem, it needs a truly technical CEO — someone who’s passionate about tech, a real “geek at heart.” Peter fits that perfectly. You’ll see him giving deep technical talks at conferences, and on weekends he’s just as happy tinkering with home automation using Home Assistant or flashing custom firmware onto his wireless router.

Open Source
Open Source is at the very heart of Percona’s DNA, so it’s crucial for our CEO to both understand it and truly care about it — and Peter absolutely does. Many of you know him as the founder and former CEO of FerretDB, a company built to provide an open-source alternative to MongoDB.

Entrepreneur
Peter Farkas is also a true entrepreneur and founder — he started his first company when he was just 14. He’s lived through the ups and downs of bootstrapping more than once. Being a founder is a unique experience you simply can’t get working inside a big corporation.

Percona Values
As many of you know from Peter’s own introduction letter, he was with Percona from 2011 to 2015 as our very first Director of Support. Those were hugely formative years for us — the time when we cemented our uncompromising open-source stance, our deep customer focus, and our drive to find the best solutions for users, not just the most profitable ones. I believe this approach is not only the right thing to do but also gave Percona a significant edge and inspired our customers, community, and staff. Over the past decade, some of that edge may have softened, and I’m confident Peter will help sharpen it once again.

Experience
Peter also spent time in senior leadership at Cloudera while building out a large team there. Cloudera was a major open source “big data” company that was highly successful in its time. That experience gives me confidence that Peter won’t just bring back the best of Percona circa 2015, but will also help guide the much larger Percona of 2025 into its next stage of growth and success.

Working for such an International company while being based in Hungary, also gives Peter a global perspective which is critical for Percona with staff based in over 40 countries.

Heart
Peter combines this with  a genuinely kind heart — he cares deeply about the well-being of our teams, our customers, and the wider community. At the same time, he has a brave heart, he’s courageous when tough decisions need to be made. Those choices aren’t always easy, but Peter has the heart and bravery to make the right ones.

Youth
When we started Percona, I was in my mid-20s — and back then, everyone that age felt perfectly ready for any leadership role. Nearly 20 years later, I sometimes catch myself looking at people that age and, almost unconsciously, thinking of them as “kids.” But I’ve learned that real strength comes from both sides: the hard-earned perspective and judgment that experience brings, and the fresh ideas, curiosity, and fearless appetite for learning that younger leaders contribute. Peter Farkas — younger than me by almost a decade, and younger than many of our senior leaders — is a great reminder that when we trust and learn from the next generation, while sharing the wisdom we’ve gained, we become a stronger, more adaptable company.

Finally, I wanted to share what Tom Basil, our Interim Board Member and before his retirement senior leader at Percona for many years has to say about Peter Farkas:

“In Peter Farkas I find a love for Percona and its people, a zeal for customer service, an intimate knowledge of the open source market, a wealth of entrepreneurial wisdom, and an honest man.  I am grateful he has accepted this CEO challenge, I believe Percona will be better for him, and I ask everyone to lend him their support.”

I’m very much looking forward to the next stage of Percona under Peter Farkas’ leadership. Please join me in welcoming him aboard!

P.S. If you are wondering what’s up with all these wolfs and rabbits – it is about our last names. Farkas means wolf in Hungarian where Zaitsev can be loosely translated as “of Hare” from Russian.

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Open Core is one of the very common ways to build a business around Open Source Software. It goes like this – you have an Open Source version of the software, often called “Community Edition” and there is also an extended version of the software, often called “Enterprise Edition” which is Proprietary software. These days we often see a “Cloud Edition” instead or together with “Enterprise Edition” which as the name says is only delivered as a SaaS product. 

The thing I find different about the Open Core model is how different it can be – you may choose to have an Open Source version that meets the needs of the vast majority of your community or you may have it being little more than a demo version, which is not particularly useful,   let’s name it “Crippled Core”.

An example of good Open Core software in is WordPress where the Open Source version is good enough for the majority of its users, moreover, multiple solutions exist for hosted WordPress, beyond Automatic owned WordPress.com. The opposite example would be Redis Inc., which, before they completely changed the license for Redis (software), essentially made it Open-Core by relicensing Redis Modules, such as RedisJSON.

Being a big fan of Open Source Software, I believe over the long term it is best to choose and invest in fully Open Source Software, yet this will significantly limit of choices.   Besides that, it is reasonable to choose Open Core Software, yet I would avoid Crippled Core software. 

The reason to do that is not simply based on the available functionality – even Crippled Core Software functionality might be good enough for your needs right now, but software creator’s approach to business. If you focus on essentially advertising very limited version as “Open Source” and force most users to become paying customers… such an approach is very little different from Proprietary software with a free demo, and you also should not be surprised if the vendor embarks on more heavy-handed monetization. 

It is great if a company has a policy about what goes in their free version and what does not, which helps users better understand what to expect. One approach that I think has been particularly reasonable is keeping developer-focused features Open, so you can maximize the speed of adoption of software and minimize friction, and when have features related to Security, Compliance, and otherwise “Enterprise Complexity” to Proprietary version – things as fine-grained account security, flexible authentication options, advanced encryption, SSO, auditing, etc. Exotic needs, such as special certifications, support for exotic platforms, and long-term support for old versions is another one. 

There are a few things I would watch in particular while looking at how Good Open Core software is.

• Is the “Community” vs “Enterprise” policy clearly articulated? 
• How many production software users are paying customers? I would expect no more than 10% of the production users to be paying customers if the Community version is actually useful.
• Are there external contributors? How many? A broad contributor base ensures Fork can happen if the vendor becomes unreasonable.
• Are contributions being refused because they compete with the Enterprise Version? Basically is the vendor just has more resources to spend on the Proprietary version (quite expected) or has been intentionally cripping the Open Source edition?

I hope asking those questions can help you to understand your risk and make good choices, even if you’re choosing Open Core Software.

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Can Ignorance be a Business Model? Surely, especially if it is not your ignorance! Counting on ignorance is exactly what many companies in “Open Source” are counting on, in particular ignorance on things like Open Source Licenses and their compatibility. 

You may be surprised how many developers, especially unsophisticated ones, think that if something is on GitHub (you can see the source) it is Open Source and can be used in the project in any way they like.

When starting using “Based on Open Source”, “Open Source Compatible” or just “Open”, highlight some components that are Open Source, and rest assured folks will be confused, just the way you want them to be.

In any serious organization, though, unsophisticated engineers are not the only ones involved in getting code to production. If you’re lucky the license incompatibility will be discovered when it is too late to avoid the dependence on that code, so the only way is to plead with the vendor about the commercial license on the terms they can’t refuse.

If a company is unlucky enough not to spot “non-compliance” before the code gets into production, the Vendor Sales are very likely to discover such non-compliance and have even higher leverage. 

Want to avoid getting into trouble? Fight the ignorance in your team. When it comes to Open Source, ensure developers have the right basic understanding of what Open Source is, understand the license for the code they are looking to use, and have rules in your organization to ensure license compatibility as well as security in your organization.

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Open Source is not a Business Model, rather it can support quite a few different Business Models. In this series of articles, I will look at some of those models with a focus on the models which work well embracing Open Source for Real.

Professional Services – Consulting, Training, Custom Engineering is Perhaps one of the oldest business models that supported Open Source development efforts for decades. The reason it is so old and so common – it happens naturally. As you develop an Open Source project and it gets users, some of them need help… and they naturally come to you, ask for help, and offer to pay for that. This means you may not need to explicitly do Sales and Marketing initiatives to start.

To start a Professional Services business around an Open Source Project you do not need to be a founder, you do not even need to be a developer, being an active community member and having a reputation may well be enough. When we started Percona we did not have any Server developers, this came later, but we had a great reputation in the community for being able with MySQL Performance Problems.

Benefits and Drawbacks of Professional Services Business Model

The great thing about Professional Services Business – it is rather easy to get started. Many solo practitioners start part-time, while keeping their day job, to check if this path is for them. You also may be able to ramp up pretty quickly. If you are building a business around an already successful Open Source project, as was the case with Percona and MySQL you may get fully booked in a few short weeks.

If you want to grow beyond individual consultants it is also quite possible to grow through “Bootstrapping” without the need to attract external funding – when you get a significant pipeline you can’t serve you hire another expert from the community (you probably have one in your network). In the early stages, this approach “great people doing a great job” works very well, it is only as you grow larger you need to get significant complicated processes and organizational structure.

As you grow a professional services team it is also rather easy to incorporate Managed Services and Support business models, which we will discuss in subsequent articles.

You are also quite likely to find willing partners if you’re doing Professional Services – many Cloud companies or venture-funded “Product” companies do not want to do Professional Services in-house but rather find partners to do it for them.

Another positive is that you get a fantastic insight into customers’ problems and how their companies operate which can put you in a great position to build Products for such customers. Through professional services, you go much deeper than “customer interviews” and also can observe what they do rather than what they tell you.

Let’s look at the downsides now – Professional Services is a hard business, as unlike with Subscription businesses you need to be constantly selling new just to keep revenue at the same level. Margins tend to be relatively low, scaling happens through people, which is hard, especially when you need to scale beyond your network of competent professionals. Business can also have volatility, seasonal, and otherwise where sometimes you have more work than you could possibly handle and other times there is no paid work for your staff. Also while the Professional Services business is easy to bootstrap it usually does not attract Venture Capital and also does not have the same valuation multiple compared to product companies.

Also, it is worth pointing out the high risk of burnout – especially in the early stages chances are you will need to market, sell, deal with contract negotiation, deliver services, collect money, deal with bookkeeping and taxes all by yourself. On the opposite side, I know quite a few entrepreneurs are very happy having built small lifestyle professional services businesses – they work with great smart people on interesting problems without the heavy burden of trying to build a $1B company.

Starting Professional Services Business

How to Start a Professional Services Business as an Engineer with no budget. This is what I’m going to focus on – if you have $10M to spend you can (and perhaps should) start at a different level.

I think the first thing you need to do is to build a reputation, Personal Brand. Most likely even if the company you work for would not want you to provide commercial services on the side, they would not mind you being active in Open Source Community. Here are some ideas on how you can build your name:

•       Engage with the Community on Forums, Slack, Mailing List, GitHub Issues
•       Start a Blog and Write Technical Articles
•       Engage on Social Media
•       Start YouTube channel or Podcast
•       Contribute to the Project – Code, Documentation, Tutorials
•       Help People (for free)

Especially if you do not serve external customers at your job providing help for free to your friends or community members can be a fantastic experience, so you get into your first paid contract with more confidence.

Whenever you’re an Open Source Project Founder or participate in an existing Open Source ecosystem you will start getting enquires to get help with specific projects…  as well as job offers.  This will give you lots of choices –  you can start a professional services gig part-time if your job allows it, change the job to one that does not require you to be exclusive, or if you’re confident enough jump head first into the wonderful world of professional services.

Professional Services Tips

The biggest mistake I see in Professional Services is not pricing your work correctly.  Way too often I see inexperienced founders looking at their previous Salary, converting it to hourly, and increasing it just a bit.  This is not nearly enough. If you’re starting as a Solo consultant remember you will need to do “everything” so you should plan to no more than 50% of billable time, plus you will be likely responsible for additional taxes and expenses. So you should be looking at more than double, hopefully triple your full-time hourly rate to be in good shape. Whenever the market is bare it is another story.

When there is confidence – what may look like a lot of money for you can well be pocket change for a large corporation. I remember my voice would be shaking the first time I would ask someone for $10K for the project (a lot of money for me at that time). Be confident your services are worth what you’re asking and you’re providing outstanding customer value and you will be much more successful with Sales.

While “Time and Materials” contracts are simple and allow for a lot of flexibility they also have limited margins.  Different models can work better. For example, you can charge “per Project” – during the early days at Percona “MySQL Performance Audit” was a very successful packaged service. It was easier to sell as customers could visualize results because we could provide them with sample reports, easier to sell, and have higher margins as we could build tools and processes to improve the cost of delivery over time.  Another creative way some companies use (ie in Cloud Costs Optimization Space) is pricing based on the portion of costs saved – this can work great as you can position it as no out-of-pocket expenses for the customer, but you need to ensure there is a good way to track such costs saved, which is not always easy.

Finally – do not forget to offer the next steps. When you deliver services, you gain valuable insight into customers’ systems and organizations. More often than not, you’ll discover additional ways to assist customers beyond the scope of their current contracts. Do it well and you can dramatically increase billings from the same customers, reduce sales and marketing expenses, and achieve faster growth. The problem you may run into, though, is that Engineers involved in Service delivery may not be the most comfortable having these conversations. Additionally, they may have other Engineers as their peers, who may not be the right people to discuss this with either. If this is the case consider making sure Engineers have some form of internal debrief (written or as a conversation) with Sales which is focused on further opportunities. You will likely notice that some Engineers are better at spotting opportunities than others. You can work with these individuals to help teach the rest of the team the craft of finding opportunities.

Strategic Consulting for Open Source Founders

Interested in taking a deeper look at your company’s Professional Services Business and getting specific advice on how to take it to the next level? I would be glad to help!

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From my early days as a Software Engineer, I was interested in complicated systems’ internal operations, what is happening inside, how they work, and why they fail. This is what brought me to the Open Source Database Community. It was to help customers operate complicated database-powered systems that  Percona was created.

At Percona we spent a lot of time improving the core observability of MySQL (Percona Server for MySQL),  helped to advance state of art of Open Source Database Observability with Percona Monitoring and Management (PMM) and helped to advance PostgreSQL query performance observability by creating pg_stat_monitor. 

What I have learned through the years though is – while we’re able to capture a lot of data on system operations and we can visualize it in hundreds of beautiful graphs, it is overwhelming for the majority of engineers. They are looking for specific relevant information about the investigation and actionable on solving the issue or even better-automated problem remediation when possible.  

This is why I was very excited when I discovered Nikolay Sivko was building Coroot. Nikolay had a lot of experience in operating complicated systems and had previously created successful Observability platforms, yet he had come to the same conclusion – in the age of extremely complicated environments (Microservices, Serverless, Cloud Native) we rarely need more data or visualizations but rather better solutions for making sense of the data and finding the root cause of the problems.  

Nikolay believes there is a better way to approach Observability in this new generation of system architectures and I fully share his vision. 

This is why I am joining Coroot as a Co-Founder to help Nikolay with my experience in the industry to take Open Source Observability of Modern Applications and Infrastructure to the Next Level.

I have also personally invested in the project and I will help raise additional capital to accelerate our mission.

Interested in joining us on this journey as a user, team member, investor, or partner? Feel free to drop me a note.  

P.S. To learn more about Coroot you can check out How it Works, check out Live Demo. When you can try Coroot Cloud or roll your installation with Coroot Open Source.

P.P.S. I will be at FOSDEM (Brussels)  and State of Open Con  (London) in early February. Let me know if you’d like to connect in person.  

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