The future of CMS. Open Source. Entrepreneurship. An interview with Boris Kraft from Magnolia

Magnolia CMS has practically always been there. They have survived the ups and downs of the digital economy. And today they are stronger and more present than ever. An interview with Boris Kraft, Co-Founder of Magnolia, about entrepreneurship & bootstrapping, CMS & business platform and the future challenges of our industry.

(Reading time: 7 minutes)

You hear a lot of good things about Magnolia. Perhaps first of all, where do you stand and how do you see yourselves?

Thank you for the opportunity to chat a little from the sewing box. First of all, Magnolia is a very international team. We now have around 80 employees at 5 locations around the world – Europe, Asia and the USA. Our turnover is in the double-digit millions and over 80% of it comes from license income. We do not implement any projects ourselves, but leave this business to our approx. 100 implementation partners. We are growing continuously. 10 years ago there were four of us!

We moved into our new office building a few months ago and finally have the space and infrastructure to expand again in Switzerland, where we currently have around 45 employees. Now there is also room to give the next generation a chance and we will start offering an IT apprenticeship after the summer.

Our customer base consists of companies and organizations of all sizes and across many different industries. Magnolia is particularly frequently used by customers in the finance, insurance, travel and media industries. Broadly speaking, customers fall into two categories. Either they need a relatively traditional “website” or they are in the midst of the digital revolution.

The former is sometimes a door opener for the latter. But in general, our focus is clearly on ensuring that our customers emerge as winners from the digital transformation. This is why we also position ourselves as a CMS for digital transformation or as a platform for digital business.

We deliver a quality product “Made in Switzerland” for the global market, for companies with the highest demands on flexibility, expandability and usability.

Magnolia has been around since 1997, the original product launch was in 2003, so you have experienced all the ups and downs and the emergence of the digital industry. What have been formative experiences for you over this long period?

Yes, we have survived many a low and risen to new heights again and again. First of all, of course, the .com collapse at the turn of the millennium was the digital equivalent of the Titanic sinking at the beginning of the 20th century. As a 4-year-old, I “experienced” the first landing on the moon. Back then it was still on a small black and white TV, and I’m not talking about the color of the case! For me, this marked the beginning of a time of boundless promises for the future. Star Trek. Perry Rhodan. Star Wars!

Then the rise of the WWW until the turn of the millennium. New Economy! Everything changes! Everything gets better! It was a crazy time and it was during this period that Pascal (Alain’s note: co-founder and CEO of Magnolia) and I started working together, only to be given a cold shower straight away. Nevertheless, it was already clear to us that digitalization would continue to advance and that we wanted to be part of writing our very own little success story from Switzerland.

“Building a company out of the ongoing business is never without bloodshed.

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There were many a moment when we had to bite our way through, even personally. Building up a company from a running business is never bloodless. The demands on an 80-person company are very different to those of four people sitting in a room and dreaming about the future.

In my opinion, Magnolia was and is an early mover with many innovations. How do you do that?

On the one hand, we have always been able to inspire outstanding employees for Magnolia and give them as much freedom as possible. At the same time, the whole thing is managed by Pascal and me. Pascal’s main focus is on what needs to be there in the immediate future. My job is to ensure that we will still be relevant in five years’ time. In this area of tension between short-term success and long-term vision, we have always managed to make the right decisions together and have them implemented by our team.

As an entrepreneur, you do something because you are dissatisfied with the status quo. And over the past 20 years, I have never found it difficult to develop ideas and anticipate developments that would improve the current situation.

The difficulty lies in the implementation! And that is also the most unsatisfactory aspect of the whole undertaking. Some ideas took 5 years before we finally had time to implement them. Some ideas are even older and are still waiting for us to have the resources to do it. Magnolia is never as good as we would like it to be and this drives many employees in the company to constantly question the status quo, to ask themselves whether something can be made even better, even simpler and at the same time even more flexible. There is a lot of passion for what we do.

What I never really understood was that you always relied on self-financing. It’s clear to me that you wouldn’t have gotten funding in 2003. But later, when the CMS market really took off, it quickly became clear that there was a limited window of opportunity to conquer the market. Drupal started there and won the game for the time being. It could well have been Magnolia. How do you see this decision in retrospect?

You probably mean Acquia, not Drupal ;-). Have they won the game for now? Is size everything? Last time I counted, Acquia had received about 100 million USD in investments. If you put that in relation to their revenue, I don’t think that’s particularly successful.

Of course, the customer likes to buy the leader of a not-very-magical quadrant. But that alone does not make a successful customer project. Or to put it another way: a sales-driven organization cannot afford the quality of a Magnolia. So the question is: What do you want as an entrepreneur? Conquer the world? Drive sales to the limit just for the sake of it? Or make your employees and customers happy?

The development of Magnolia 5 a few years ago was a milestone for the entire software industry. There is still no other product like it today, which surprises me on the one hand because I assumed that our innovations would be copied quickly.

But if you understand that most manufacturers have no interest in making life easier for customers, then it’s less surprising. Magnolia 5 is both incredibly flexible and incredibly easy to use, making it an excellent basis for digital transformation. As the saying goes: “The only constant is change”.

It was only because we built Magnolia without the pressure of external financiers that we were able to do what we did with Magnolia 5. In the meantime, however, we have arrived at a different point in the life cycle of a company. Magnolia is excellent. We know what we want to improve next and now it’s about making the product accessible to more people. Funding now also makes sense for us.

In my opinion, you can’t make a good product with money alone. Not without it either, of course ;-). But the freedom we’ve had so far has paid off for our customers and our employees.

In a few pitches to banks and insurance companies, I lost “against” Magnolia. A frequently cited argument (simplified): We want open source, but are on the Java track. Was this strategically very clever positioning a conscious decision or did it just happen that way?

Of course, it would be nice if you could always claim that you knew everything from the start and always did everything right. But a strategy evolves. We have always taken relatively small steps. Java was a given for us. It simply had to do with the employees we had on board, and PHP really wasn’t to be taken seriously at the time. And we made it open source because we had no money to market the product and therefore no interest in selling it. We only introduced a commercial version of Magnolia in 2006, after the pure open source version had almost ruined us.

However, I do not consider Java & Open Source to be our positioning. That’s why both are hardly mentioned on our website. On the contrary. I am of the opinion that the programming language of the product must be less and less relevant in future (the Java platform, on the other hand, is of course excellent!). And I believe that open source is still not really understood by customers. In my view, it is also becoming less and less important. Yes, access to the sources is a great relief for good developers if they want to understand how something works.

At the same time, however, open source should not be the main driver for decisions. In our selection processes, we repeatedly find that we are the only open source system on the shortlist. This means that our customers do not primarily see Magnolia as an open source product, but as an excellent product that is also open source.

Speaking of Java. I have been observing a subliminal trend away from PHP towards Java for some time now. Does this benefit you in your daily business?

Our segment has always been Java, and for good reason. Our customers are Java stores. So I think the trend from PHP to Java, if it exists, is hardly noticeable for us.

If someone relies on Magnolia to digitize their company, then it is clear that a first-class team of programmers is needed to bring the company’s internal infrastructure to the glass. And these programmers have probably been with the company for quite some time, otherwise they wouldn’t know its systems well enough. And of course they have been working with Java for a long time, for example to develop their own booking engines or similar.

But there is a completely different trend: away from the backend (with Magnolia: Java) and towards the frontend (Javascript frameworks). The frontend hipsters basically see a CMS as an obstacle. Not as a necessary prerequisite for a good digital experience. Unfortunately, this reflects a familiar pattern in the CMS world. When you first look at CMS, it seems almost trivial. Capturing content and bringing it to the web, and now of course to other channels. What could be more obvious than not bothering with the CMS at all, but simply writing the little bit you need yourself? The reincarnation of the “Homemade CMS” wave that we had until mid-2000 is now called “Headless CMS” and will lead to unwanted dependencies, data silos and chaos, just as it did back then.

But Magnolia has also recognized this trend and with “Light Development” offers the frontend hipster a java-free and ultimately almost “CMS-free” way to develop projects quickly and with their own tools, while having an enterprise CMS in the background that doesn’t get in the way, but is there when things get serious. And it almost always gets serious at some point. At the latest when a site becomes multilingual, access rights have to be managed or third-party systems have to be decoupled and integrated. This means that we are ideally equipped for the shift from the back end to the front end.

Speaking of Open Source: Today I don’t find much about Open Source on your website. Why is that?

As already mentioned, I think that open source is no longer a unique selling point and is therefore becoming less and less relevant in my eyes. The increasing digitalization of companies is bringing ever larger parts of the value chain onto the web, which means we are leaving the “nice to have a new website” CMS and moving into business-critical infrastructure areas.

This is where Magnolia is at home and where license costs play a subordinate role. Of course, this plays very much to our advantage and we have very consciously geared our product management towards being the best solution on the market in this segment.

Last year you wrote a lot of articles about IoT and one or two readers asked me what Magnolia had to do with IoT. Can you help me?

The whole world is dealing with IoT today. IoT is the future that is already here, but not yet evenly distributed. Magnolia is a platform that makes it easy to integrate data and processes into the user experience without the user realizing it.

One concrete example of this is our customer Virgin America, an award-winning online presence that makes it much easier and faster for users to book flights. What the customer doesn’t realize during the booking process is that more than a dozen backend systems are connected, completely seamlessly. The user experience is perfect. So these integration options are a key feature of Magnolia.

And now IoT is the next opportunity and challenge for companies. For us, it’s simply another pool of data suppliers with whom the customer often has to interact in an abstract way.

What does this look like in the specific example?

Specifically, for example, we have apps (Magnolia apps are task-oriented user interfaces similar to apps on a smartphone) in Magnolia that allow you to manage beacons, locations and coupons. So it’s a good basis for the retail sector, where we have a whole range of very large companies in our customer portfolio.

On a less concrete level, I assume that information from the Internet of Things needs to be reacted to in many places. This requires context and this can come from a CMS.

Four weeks ago, it was announced that IBM will acquire the agency group Aperto, a strong partner of Magnolia. What are the opportunities for you?

Aperto is indeed an important partner for us. I see the fact that Aperto has now become part of IBM iX, the world’s largest digital agency, as an absolute stroke of luck. We already have an excellent relationship with IBM and last year, for example, we held our Magnolia conference at the IBM Innovation Center in Silicon Valley.

We also supply adapters for some of IBM’s products. Especially in the areas of e-commerce, analytics and personalization and were a partner at the IBM stand at DMEXCO last year. In short: Aperto as part of IBM will significantly improve this good basis. We are looking forward to it!

My article on the consolidation of the CMS market generated an incredible amount of interest. I have the feeling that the market is on the move. What is your assessment of this? Where will we be in 3 years’ time?

Content management and the multitude of things that we understand and associate with it is on the one hand very complex and on the other hand still subject to major change. There is no end in sight to this change. Once again on the subject of IoT. It is impossible to predict what lies ahead for us all. New systems are still constantly coming onto the market that try to solve partial problems and others that were not built for this rapid change will be scrapped or bought up only to be scrapped.

I don’t believe that the CMS world will look fundamentally different in three years’ time than it does today. The replacement cycles are now too long for that. As I said, we are not talking about pretty corporate websites, but about business-critical infrastructure.

The fact is that the beautiful, colorful world of “customer experience” has by no means arrived in many companies. What is actually a reality for the majority of customers today could also have been implemented with Magnolia 10 years ago. Yes, there are the Lighthouse projects such as Virgin America or the Airbus Group. But there are also many companies that are still a long way from where they should be. How difficult is it really to align a booking process with the customer and are there still companies that haven’t realized that the mobile revolution is now part of the establishment?

“Certain companies deliver hair-raising customer experiences, you have to have masochistic tendencies to put up with it”

When I travel these days, I only take my iPhone 6 plus with me. No laptop, no iPad. And I use this device to book flights, hotels, win auctions or order a Tesla. My customer experiences here are very different. Tesla is, as you would expect, great. Other companies deliver hair-raising customer experiences, you have to have masochistic tendencies to get through that.

Magnolia has been providing full mobile support for many years. If other systems are still lagging behind, they will probably slowly die out. From this perspective, the market will consolidate. But this process will by no means be quick. The investment in a new CMS is too great and the implementation cycles too long.

80% of the readers of this blog come from Germany. Germany is an interesting market with a lot of potential. Why don’t you have a stronger presence here? For example, with your own branch?

Our headquarters are on the German border, with many employees from Germany. We have more implementation partners in Germany than anywhere else in the world. Basel has excellent flight and train connections to everywhere in Germany. In short, having our own branch office would change nothing, except for more administrative work and more costs. That cannot be in the interests of our customers.

A start-up question at the end: You and your partner Pascal Mangold have an incredible entrepreneurial backpack. What is your advice to young people who want to start a tech company in Switzerland today?

Do it! Seriously. Doing your own thing is life-changing. OK, it’s probably not for everyone. You have to question your motivation. Money as motivation will neither be enough nor, in the unlikely event of success, will it alone make you happy.

Wanting to grow yourself is certainly a much better motivation. Making the world a little or even a big bit better – a good reason! Motivation is important because the moment will come when everything simply goes wrong.

“Founding a company is agile product development of your own being, so to speak

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I founded my first company at school – unsuccessfully. My second – unsuccessful – and my third – still pretty unsuccessful – during my studies. I learned something new each time. Especially about myself. Founding a company is, so to speak, “agile product development” of your own being.

It was also good for me not to take anything for granted. The first setbacks were certainly formative. And so the journey remains the goal. And as I was told on my first day at university: Even a journey of 1000 miles begins with a first step. Have fun running!

Boris, thank you very much for your time.