Ict@innovation: Free your IT Business in Africa/2-4
Module 2.4 Training Linux Users in South Africa
Registered Name: Linux Holding (Pty) Ltd.
Staff Strength: 9
Country: South Africa
Type of business: Linux Training
Linux Holdings is a South African based company focusing mainly on developing and administering Linux courses for interested individuals and open source companies in South Africa and its environs. Founded in 2003 and having staff strength of 9, Linux Holdings aims to be a leader in the open source education environment.
The core staff of Linux Holdings Ltd consists of instructors who frequently use survey results from their customers to determining the training needs of the open source software market. They design training programs and produce materials which are tailor-made for the company's clients. As a curriculum venture, the managing director summarized the company profile as consisting of staff with a collective experience in curriculum design and training. The company develops its own training material which has greatly contributed to the “success of our students”, commented the director. For Linux Holdings, the motivation for going into Linux training as a major business coincides with the director's motivation, interest, and experience in open source;
“It was a field [open source] I liked and know. It is pointless doing business in a field you dislike or don't care for. Part of business is to enjoy what you do and you are passionate about. That way your chance on success increases”.
FOSS Business focus
Linux Holdings is the result of incorporating expertise and experience at various levels. The core focus of business is the provision of Linux-based training. The company is also offering other open source services in marketing, servers hosting and software development.
In its years of operation, Linux Holdings learned a lot in terms of getting start-up capital, getting loans to finance business initiatives in South Africa, building a client base, hiring employees, finding office space, getting company documents, etc. The following points highlight Linux Holdings experience;
- A proper strategic plan in place which has the capacity to expand and accommodate unexpected changes in market conditions. Have a 3 year and 5 year plan in place along with shorter period plans.
- Set realistic and attainable goals. Start small and then concentrate on orderly expansion of capital.
- Before starting business, find out what is needed and wanted in the target industry or market. Speak to people, do surveys and learn what your potential competitors are doing. Then take what is needed and wanted and deliver that as product.
- Be knowledgeable in the industry you are going to do business in and know the laws governing business in the country. Many problems experienced in business is due to lack of prior knowledge of the laws governing a particular business area. Furthermore, the company director summarized how lack of prior knowledge can lead to business failures thus; “financial problems stem from not having financial planning understanding. Not knowing your product is the reason of having products that people do not want. Not understanding quality control, marketing and PR creates problems in those areas”.
Taking these experiences into consideration, the Director of Linux Holdings advise for someone building business around open source software in Africa in general, and South Africa in particular is
- the need to understand the laws of the country regarding business,
- work with open source and learn what benefits it offers,
- Look at what your potential competitors are doing, learn from them and start thinking in terms of what other services the market needs.
- If you are able to offer services of higher quality than your competitors, then you are in business. “Quality is always the most important part of a business”, said Kin Le Roux, general manager of Linux Holdings.
Revenue generation model
Training accounts for about 80% of the revenue. Linux Holdings face a unique challenge in training a generation of Linux Users in South Africa. The association of the word “free” with free and open source software makes some customers think that training in open source software should be free as well or at least, very cheap. Linux Holdings commented that this way of thinking disregards the cost and resources (human and material) the training company endures, which can be the same or sometimes higher than other computer training courses offered by none open source companies.
Linux Holdings have firm policy on getting paid before delivering services or before students register and complete their courses. “The financial department in Linux Holdings aggressively (not rudely or threatening) keeps the back log as low as possible”, commented the managing director. The marketing department, on the other hand, is responsible for creating and improving training material for Linux Holdings. All training is done in English. The company has approximately 20 students per enrollment in its academic program. Corporate training has about 5-8 students per course. All students must be made fully aware before training starts that they pay before the 5th of the month else they will not be allowed back in the course room.
The company has a unique way of marketing. By means of surveys, the marketing department finds out what is needed and wanted and then from the results, the company creates that need. Sometimes this is done via the company's web site and by phoning current customers.