The investment case for employing a Drupal core contributor

I've long been convinced that every well-run Drupal agency of 30 people or more can afford to hire a Drupal core contributor and let him/her work on Drupal core pretty much full-time. A healthy Drupal agency with 30 people should be able to do $5MM in revenue at a 15% net profit margin #1. This means they have $750k in profits that can be invested in growth, saved as reserves, or distributed among the owners.

There are many ways you can invest in growth. I'm here to argue that hiring a Drupal core contributor can be a great investment, that many Drupal agencies can afford it, and that employing a Drupal core contributor shouldn't just be looked at as a cost.

In fact, Chapter Three just announced that they hired Alex Pott, a Drupal 8 core maintainer, to work full-time on Drupal core. I couldn't be more thrilled. Great for Alex, great for Drupal, and great for Chapter Three! And a good reason to actually write down some of my thoughts.

The value of having a Drupal core contributor on staff

When Drupal 8 launches it will bring with it many big changes. Having someone within your company with first-hand knowledge of these changes is invaluable on a number of fronts. He or she can help train or support your technical staff on the changes coming down the pipe, can help your sales team answer customer questions, and can help your marketing team with blog posts and presentations to establish you as a thought-leader on Drupal. I believe these things take less than 20% of a Drupal core contributor's time, which leaves more than 80% of time to contribute to Drupal.

But perhaps most importantly, it is a crucial contribution that helps ensure the future of the Drupal project itself and help us all avoid falling into the tragedy of the commons. While some core contributors have some amount of funding — ranging from 10% time from their employers to full-time employment (for example, most of Acquia's Office of the CTO are full-time core contributors) — most core contribution happens thanks to great personal sacrifice of the individuals involved. As the complexity and adoption of Drupal grows, there is a growing need for full-time Drupal contributors. Additionally, distributing employment of core contributors across multiple Drupal organizations can be healthy for Drupal; it ensures institutional independence, diversified innovation and resilience.

Measuring the impact of a Drupal core contributor on your business

While that sounds nice, the proof is in the numbers. So when I heard about Chapter Three hiring Alex Pott, I immediately called Chapter Three to congratulate them, but I also asked them to track Alex's impact on Chapter Three in terms of sales. If we can actually prove that hiring a Drupal core contributor is a great business investment, it could provide a really important breakthrough in making Drupal core development scalable.

I asked my team at Acquia to start tracking the impact of the Drupal core contributors on sales. Below, I'll share some data of how Acquia tracked this and why I'm bullish on there being a business case.

For Acquia, high quality content is the number one way to generate new sales leads. Marketers know that the key to doing online business is to become publishers. It is something that Acquia's Drupal developers all help with; developers putting out great content can turn your website into a magnet. And with the help of a well-oiled sales and marketing organization, you can turn visitors into customers.

Back in December, Angie "webchick" Byron did a Drupal 8 preview webinar for Acquia. The webinar attracted over 1,000+ attendees. We were able to track that this single piece of content generated $4.5MM in influenced pipeline #2, of which we've managed to close $1.5MM in business so far.

Even more impressive, Kevin O'Leary has done four webinars on Drupal's newest authoring experience improvements. In total, Kevin's webinars helped generate $9MM in influenced pipeline of which almost $4MM closed. And importantly, Kevin had not worked on Drupal prior to joining Acquia! It goes to show that you don't necessarily have to hire from the community; existing employees can be made core contributors and add value to the company.

Gábor Hojtsy regularly spends some of his time on sales calls and helped close several $500k+ deals. Moshe Weitzman occasionally travels to customers and helped renew several large deals. Moshe also wrote a blog post around Drupal 8's improved upgrade process using Migrate module. We aren't able to track all the details yet (working on it), but I'm sure some of the more than 3,200 unique viewers translated in to sales for us.

Conclusion: investment returned, and then some

Obviously, your results may vary. Acquia has an amazing sales and marketing engine behind these core contributor, driving the results. I hope Chapter Three tracks the impact of hiring Alex Pott and that they share the results publicly so we can continue to build the business case for employing full-time Drupal contributors. If we can show that is not just good for Drupal, but also good for business, we can scale Drupal development to new highs. I hope more Drupal companies will start to think this way.

Footnotes

#1 I assumed that of the 30 people, 25 are billable and 5 are non-billable. I also assumed an average fully-loaded cost per employee of $125k per head and gross revenue per head of around $180k. The basic math works out as follows: (25 employees x $180k) - (30 employees x $125k) = $750k in profit.

There are 365 days per year and about 104 weekend days. This means there are 260 business days. If you subtract 10 legal bank holidays you have 250 days remaining. If you subtract another 15 business days for vacations, conferences, medical leave and others, you have 230 business days left. With a blended hourly rate of $130 per hour and 75% utilization, you arrive at ~$180k gross revenue per billable head.

I confirmed these numbers with several Drupal companies in the US. Best in class digital agencies actually do better; they assume there are 2,000 billable hours in a year per head and maintain at least a 85% chargeability rate (i.e. 1,700 billable hours per head). Many companies do less because the maturity of their business, the market they are in, their geographic location, their ambitions, etc. It's not about what is "good" or "bad", but about what is possible.

#2 "Influenced pipeline" means that the content in question was one factor or touch point in what ultimately lead potential customers to become qualified sales leads and contacted by Acquia. On average, Acquia has 6 touch points for every qualified sales lead.

Comments

John Faber (not verified):

Hi Dries -

I like the way you think! The numbers you present here are pretty darn close. Chapter Three hired Alex because of our long standing commitment to Drupal and the Drupal community. The role of a core maintainer is really a full time job especially at this point of development. I know that Alex will be excited to show the power of Drupal 8 features with real world examples as that become more feasible. Chapter Three will share the sales metrics as they become available to see if they support the position presented here. I hope they do!

john

May 8, 2014 - 00:43
Jingsheng Wang (not verified):

The economic rationales you presented make a lot of sense. Another implicit benefit for the business long-run that I would point out is the feasibility to influence the project.

As we know, a Drupal shop is a profit/goal driven entity. Hiring a Core developer will give them opportunity to:

  1. Priorize fixing issues on D.O., which has more immediate befinit to the shop.
  2. Lower the communication cost in the Drupal community, as a thought leader gets their opinion heard and responded much faster.
  3. Push innovation, which matters to the shop.
May 8, 2014 - 07:41
Ivan Jaros (not verified):

"With a blended hourly rate of $130 per hour"

Lol ... good for them. Seems like I'm living on the wrong continent. The media agency I work for bills 30€/hour so ...

May 8, 2014 - 12:00
Dries:

As mentioned, I confirmed the business fundamentals with other Drupal organizations and digital/web agencies, including Acquia's own professional services organization. For some of the organizations I talked to these numbers were conservative. For others, these numbers sound astronomical. I'd look at it as an opportunity to grow. I encourage you to do your own benchmarking and to study your competitors.

May 8, 2014 - 18:56
jhodgdon (not verified):

Also, in an area where consulting rates are lower, presumably the salary of a contributor would also be proportionally lower, right? So the math should work out about the same either way.

May 8, 2014 - 19:08
Dries:

Agreed with jhodgdon. Don't be intimidated by the hourly rate; if you know what a typical Drupal consultant is being paid in a specific market, just do the math on what the bill rate *should be*.

The key data points are 30% mark-up for benefits and taxes, 100% mark-up on that number for overhead and then at least a 20% margin. So if a consultant is making $40,000 per year, the math is: ((($40,000 x 1.3) x 2) x 1.20) / 2000 = $62 per hour. If, however, a consultant is making $100,000 per hour, the hourly rate should be $156. Needless to say, some of these parameters may be different in your area but that is how I'd approach it.

May 9, 2014 - 00:33
Ivan Jaros (not verified):

Recently I was looking for part time work from home and one of the largest Drupal shops in Europe offered me 20€ per hour. And I have over 7 years of Drupal exp. A friend of mine worked for a big Drupal shop in US from home and he didn't make more than 25€ per hour. Now he works for Acquia but I don't know his salary. Anyway just my 2c.

May 14, 2014 - 11:22
Greg (not verified):

Interesting, I have to say I *don't* find the numbers 'pretty darn close', in so far as the utilisation rate required to be able to pull in that $180,000/head would be impossible to achieve in Europe, because the day rate you come to when you factor in vacation time and allow for an (optimistic) 80% utilisation rate is too far above the 'going rate' for PHP developers, that even Drupal companies can't really get away with charging it - bar maybe a few with exception reputations. But bear in mind there are lots of big consultancy companies we're competing with who offshore development on very competitive rates.

That said, we let our staff to Labs time and Contrib time, which amounts to something like 60 weeks a year we 'lose' to contributing to open source, spread across the team. So that *is* our 'core developer'. If we stopped doing that, we could hire a core dev full time. But I'm not sure how the rest of the team would feel about losing their own time to contribute so one other person can contribute full time...?

May 8, 2014 - 12:14
jhodgdon (not verified):

Hi Dries,

Your post inspired me to write about the benefits for smaller Drupal shops also contributing to Drupal development: http://poplarware.com/news/freelancer-contrib

We smaller shops might not have the resources to hire a full-time Drupal contributor, but we can still contribute our time or at least a portion of our profits.

--Jennifer

May 8, 2014 - 15:38
Ankur Gupta (not verified):

Hi Dries, very timely post. At Axelerant, we've had this position open for months (http://jobs.axelerant.com/apply/KvWtje/Software-Developer-Drupal-Core-Co...) .. I think we are very close to filling this. As we go along, will share perspectives from a primary offshore agency~

Thank you!

May 8, 2014 - 17:04
Hugh (not verified):

Really interesting article. Thanks.

May 8, 2014 - 18:43
Dave Terry (not verified):

Hi Dries,

While I do not disagree with the premise of your point, the anecdotal feeling myself, and several peers have, is that "larger" Drupal agencies have a disproportionate amount of responsibility to contribute back to the open-source community. The reality is that most cities or regions have a least one agency that is the beacon for fueling Drupal growth. For example, they organize camps, meet-ups, co-working days, training events, etc. In short, they are significantly investing company time in Drupal.

Additionally, most Drupal-centric agencies (in theory at least) will allocate time for community giveback - this includes code and module contributions. This is our model at Mediacurrent.

Personally, I would like to see you call-out organizations that heavily leverage Drupal become more educated around the value of having their employees get more engaged with the Drupal community. If 30-people is considered "large" for a Drupal agency imagine what enterprise companies with hundreds of marketing/web/tech professionals can subsidize and give back to Drupal.

Thanks for the post and initiating this discussion.

Cheers,
Dave
Mediacurrent

May 8, 2014 - 19:20
Mike Gifford (not verified):

It would be easier for companies to justify contributing to Core if there was some evidence of them doing so. OpenConcept's a pretty small company, but we're in the top 30 companies listed in Eric Duran's list of contributors.

Not that there aren't problems with this list, but it would be nice to have those companies that are already contributing to Core be highlighted prominently on Drupal.org. People need to see examples of others contributing before they are willing to make the jump.

Core needs a lot of work, but so does the rest of the Drupal community. I'm not sure what happened to /drupalgive but this too seemed to only be noticed by people who were already giving to the community. We've got to stop preaching to the choir and start actively engaging with people who use Drupal who aren't even members.

Drupal is Free as in Kittens - Let's make sure we're properly acknowledging those individuals and organizations that are keeping it alive.

May 9, 2014 - 18:13
Vesa Palmu (not verified):

I definitely support the idea of having more people working on the core, but I can also see a potential risk with sponsoring more and more full time core developers. If the team working on core is no longer exposed to real world projects, how do we make sure their priorities continue to serve real projects?

Full time development teams in commercial software have a product owner setting priorities with deep understanding of the customer needs. Open source works differently. If most of the core team exclusively focuses on core development full time, how do we make sure the team still understands the needs and priorities of real world projects?

For this reason I would rather see core developers who spend most of their time on core, but also some considerable time every month on real world projects. Sharing the everyday pains of teams using Drupal in real projects is an easy way to keep the focus on the right things.

Perhaps I'm worrying on something that's not going to be a problem at all. It's just that I would hate to see Drupal becoming technically brilliant product that doesn't actually focus on meeting the needs of the users.

May 10, 2014 - 12:22

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