Walk the halls of any open-source conference and you'll see a large percentage of attendees with ironically un-open-source Apple laptops and iPhones. I've commented on the reasons for this before, but a new thought sprung to mind while reading Matthew Thomas' excellent (and old) "Why free software usability tends to suck."
Open-source advocates like good design as much as anyone, but the open-source development process is often not the best way to achieve it.
Thomas now works for Canonical, the company behind Ubuntu, which arguably offers the industry's best Linux experience for personal computers. I got a sneak peek at a future Ubuntu release while at dinner with Canonical founder Mark Shuttleworth Wednesday night, and it was gorgeous. Mac freak I may be, but the day Canonical releases that version of Ubuntu is the day my devotion to Apple will be severely tested.
Yes, it's that good.
But it's "that good" because there's a company behind it, a company dedicated to making Linux usable for average consumers. As Thomas writes,
Every contributor to the [open-source] project tries to take part in the interface design, regardless of how little they know about the subject. And once you have more than one designer, you get inconsistency, both in vision and in detail. The quality of an interface design is inversely proportional to the number of designers.
This, coupled with the fact that experienced interface designers tend to be rare in open-source projects and, even when present, "they are not heeded as much as they would be in professional projects precisely because they're dedicated designers and don't have patches to implement their suggestions," as Thomas writes, means that many open-source projects are technically brilliant...and abysmal to look at.
In the short term, proprietary products are generally going to win because they can more tightly control inputs and output and, intriguingly, it is likely that the most proprietary products will win. Why? Because in new markets, control is crucial to delivering a complete experience. Clayton Christensen, the Harvard Business School professor and author, notes:
Companies must be integrated across whatever interface drives performance along the dimension that customers value. In an industry's early days, integration typically needs to occur across interfaces that drive raw performance--for example, design and assembly. Once a product's basic performance is more than good enough, competition forces firms to compete on convenience or customization. In these situations, specialist firms emerge and the necessary locus of integration typically shifts to the interface with the customer.
Hence, Apple reigns in smartphones because it's a comparatively new market and Apple can control the complete design of the product. Microsoft and Google, on the other hand, will struggle to compete because they are only delivering software, and depend heavily on the device manufacturer. (It's likely that Apple is also exercising significant influence over AT&T and the other wireless carriers, influence that Apple's competitors likely lack.)
Against this backdrop, I wouldn't expect open source to win in new markets unless a company or other committed organization (e.g., Mozilla with Firefox) is dedicated to making it succeed. But in the long run, it's fair to expect open systems to win. As Mozilla CEO John Lilly articulated to me in response to my post "Is Apple 'open enough' to rule the next decade of mobile?":
In the long term (10 years +), I think that open systems will almost always win, because the systems will be better understood from end to end, there will be more places for individual innovations to happen, more commoditization, and [more need for] the diversity and variety of an open ecosystem.
I agree. The key, however, is learning to tweak open systems in the short term to be competitive, too, and that, I believe, requires a "cathedral+bazaar" approach to open source. It's great, for example, that Red Hat has successfully helped to commoditize the Unix operating system market, but many of us don't want to have to sit around for decades waiting for an industry to tire out, thus ripening for open-source commoditization.
We want to innovate. We want to compete. And we want it now.
For that, you need a little more than open source, it seems, to make products usable. You need control, and control doesn't always jibe well with open-source development. This is one reason that we're seeing the emergence of the Open Core licensing model for open source.
It's why I think we need a lot more such activity if we want open source to dominate new markets, and not merely clean up the scraps of old markets.
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Novell was recently rumored to be shopping itself around for a buyer. The new rumors? That it's doing some shopping of its own. In this, Novell isn't alone, with Dell also looking to pick up companies that can expand its product lines, as both look to grow despite CIOs' decreasing willingness to spend. Open source may factor into both companies' M&A strategies.
As reported in Daily News & Analysis, Novell CFO Dana Russell has said the company is "interested in making acquisition in the high-growth businesses like identity security and compliance management software, data centre tools and open source software." With over $1 billion in the bank, Novell is in a prime position to buy companies on the cheap.
However, Novell should avoid its SiteScape error, viz., buying into a trendy but not yet profitable market. Identity security and compliance management are probably safe, because they're precisely the sort of "boring" markets that CIOs will pay money for in a recession.
Open source is much the same, but it depends on which open-source products it picks up. A Zenoss, Reductive Labs (Puppet), or some other company in IT management/configuration might be a smart bet.
Novell isn't alone in its interest in acquisitions to spur growth. Dell has been widely reported to have a $10 billion war chest set aside for acquisitions and, according to The 451 Group, Dell may be looking to make some significant acquisitions in the storage market:
With existing partners such as Cisco and Oracle...now priming themselves to become players in the server hardware market, Dell clearly needs to build up its portfolio to do battle with these new entrants along with its traditional rivals Hewlett-Packard and IBM. One clear way to do this would be to expand its storage software and hardware lineups since these offerings are complementary to its core server and PC business.
One way to get into the market would be to buy EMC, a current partner, but as The 451 Group notes, Dell has rarely ventured into big acquisitions--its $1.4 billion acquisition of iSCSI storage systems vendor EqualLogic in November 2007 the exception to the rule. I'd expect Dell to buy midrange players along the lines of 3PAR, Exanet, and so on rather than NetApp or EMC. Buying big would be distracting to Dell and take too long to digest and commoditize, Dell-style.
It's possible that Dell might even delve into the open-source storage market. An Infoworld reports identifies the best of the bunch, with vendors/projects like Zmanda, FreeNAS, and StorageIM in the mix.
It's doubtful, however, that any of the vendors in the open-source storage space are big enough to move the revenue needle for Dell. So, while it's SMB strategy may involve a healthy dose of open source, I wouldn't expect its storage strategy to do so...at least, not yet.
Open source could be a boon for both Novell and Dell, but each would need to be pragmatic about what to expect from open source. Currently, the most revenue either can expect from an open-source buy would be in the $50 million range, with most open-source vendors offering much less than that.
However, the one thing that open source can offer both right now is a ready supply of leads, plus branding and relevance in markets where Novell and Dell may not yet have much of either.
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Microsoft CEO Steve Ballmer had some provocative prophecies to share with the Cannes Lions International Advertising Festival in France, declaring that within 10 years all content will be online.
There won't be newspapers, magazines and TV programs. There won't be personal, social communications offline and separate.
But will there be Windows?
After all, the trend Ballmer spots in the media world is almost exactly the same thing that is roiling the software markets as software shifts to subscription-based cloud computing, a weak area for Microsoft but a strong one for Google.
Yes, Microsoft has Azure, an attempt to blend cloud services with on-premise software. But its cloud story remains a bit complex and the company doesn't seem overjoyed to be telling it.
After all, it has billions of dollars of revenue tied up in the old world of on-premise software installations. Who can blame it for dragging its feet on the way to the cloud?
Ballmer correctly noted at the conference that media companies have yet to figure out how to make money online. I guess it takes one to know one.
However painful it might be, Microsoft, like the print media that Ballmer eulogizes, must change. Microsoft must get online, and much faster than is comfortable. Otherwise it stands to lose to Google which has no built-in dependency on on-premise deployments.
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Oracle has gone on a buying spree in the past few years, consolidating an impressive portfolio of market-leading technology. But there's one thing it still lacks, despite awkward efforts to fill the void: an operating system. Though Oracle has unsuccessfully courted Red Hat as an acquisition target for years, its affections might be better placed on Ubuntu.
Yes, by acquiring Sun, Oracle is gaining Solaris, but as Red Hat CEO Jim Whitehurst indicated in the Red Hat earnings call on Wednesday, the exodus of Solaris-to-Linux users continues apace, as Sun's attempt to neutralize Linux's appeal with OpenSolaris have had zero effect on stopping the exodus.
Oracle Enterprise Linux (OEL), a Red Hat Enterprise Linux (RHEL) clone, has failed to dent Red Hat's dominance, with Red Hat renewing all of its top 25 deals (again, and at 120 percent of renewal value) that were up for renewal, losing none to OEL. As such, RHEL's dominance remains a festering sore for Oracle's ambition to own a complete enterprise software stack. So long as Red Hat owns the foundation of that stack, it remains a real threat to Oracle.
So long as it's easier for Oracle's sales force to sell Oracle applications and databases on RHEL than on OEL, OEL will continue to bluster but fail.
Oracle could buy Red Hat, but with Red Hat earnings consistently strong, Red Hat is arguably too pricey to be a viable takeover target, as The Register opines. Besides, Red Hat has shown no desire to jump into the arms of its Redwood Shores business partner and competitor.
All of which makes me think that a strong partnership with Canonical for Ubuntu, rather than continuing to feed Red Hat, could be the right Linux strategy for Oracle.
Ubuntu is the clear community choice in Linux distributions, dominating Linux "desktop" adoption and also claiming a solid foothold on enterprise servers. Unlike OEL or Novell's Suse, Ubuntu comes with built-in enterprise momentum, albeit still at the grassroots level. Oracle's sales force could sell Ubuntu as a complement to Oracle technology, unlike OEL which is a difficult sales pitch.
The spirit to sell OEL is willing, but the flesh is weak.
As just one data point on this enterprise readiness to accept Ubuntu, my company, Alfresco, an open-source content management vendor, has seen adoption of Ubuntu rise to 37 percent of all trials of our Enterprise product, versus 28 percent for RHEL and Fedora.
A year ago, Ubuntu was making serious headway, but today the interest seems to be migrating to using Ubuntu for real enterprise deployments.
Other open-source companies I advise are seeing similar Ubuntu traction, a fact that is perhaps not lost on Dell and other hardware manufacturers that increasingly preload Ubuntu on their servers, Netbooks, and laptops.
Ubuntu, in short, has community momentum. What it lacks is the blessing of a major software vendor. Oracle, with its heft, is a kingmaker, and could give Ubuntu the "enterprise-ready" branding and certification that still elude it.
Not coincidentally, it was Oracle, more than any other company, that blessed Red Hat as the default enterprise Linux distribution years ago. But for Oracle's support for Red Hat Enterprise Linux, we'd almost certainly have a very different Linux market today, one where Novell's SUSE and other Linux distributions would have more respectable market shares compared to RHEL.
Oracle has the ability to make Ubuntu a mainstream enterprise server player. The question is whether it wants to.
As Matt Aslett, an analyst with The 451 Group, told me, "Oracle's Linux strategy is about serving its existing customers," and, given that there are more Oracle customers using RHEL than Ubuntu--coupled with the fact, as Sean Michael Kerner points out, that Oracle has yet to certify its products to run on Ubuntu--RHEL (and its clone OEL) may be seen as the safer course of action.
Even so, it remains unclear why Oracle should continue to plow resources into OEL when the market is voting for RHEL (paid enterprise adoption) and Ubuntu (unpaid community and paid OEM adoption). Either go back to a full embrace of RHEL or try Ubuntu.
Oracle could turn that Ubuntu popularity into paid deployments, while simultaneously asserting a greater measure of control over its operating system story. I'm a big fan of Red Hat's business, but I'm surprised Larry Machiavelli (er, Ellison) hasn't sought to check the ever-growing power of Red Hat in enterprise infrastructure.
What do you think? Would Ubuntu be a good move for Oracle, or is Linux such an afterthought for Oracle that the status quo with Red Hat is the right course of action?
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For those wondering whether Oracle or Red Hat is weathering the recession best, this week may have settled the question. On Tuesday the market cheered Oracle for only seeing a 5.2 percent drop in revenue, with a 7.2 percent drop in profit (absent the strong dollar, Oracle would have seen a 4 percent increase in revenue and a 5 percent increase in profit).
Red Hat? Well, on Wednesday Red Hat announced fiscal first-quarter revenue of $174 million, up 11 percent from the prior year. Subscription revenue was up 14 percent year over year to $148.8 million. The company's total deferred revenue balance is now $567.3 million, an increase of 15 percent on a year-over-year basis. Net income for the quarter was $18.5 million.
Both Oracle and Red Hat are doing well, and Oracle is obviously dealing with much bigger wads of money, but it seems clear that Red Hat's open-source model is the big winner in the recession.
In fact, on Red Hat's earnings call, Chief Executive Jim Whitehurst indicated: "Budgets remain tight and we don't see an end in sight for this. In relative terms, this is pretty good for us." He went on to call out the big differentiator for Red Hat's business: certified ecosystem.
The key differentiator for us in Linux is our certified ecosystem. Even those that are clones of RHEL [Red Hat Enterprise Linux] lack this certified ecosystem. The second differentiator is value: great service and support at a compelling price.
We have a very disciplined business model which is based on commoditizing key parts of core infrastructure. We've been laser-focused on this. Open source is particularly good at that. We'd certainly like to work with other open-source companies but they have fundamentally different business models than we have.
Repeatedly asked on the earnings call about competition from Oracle, Red Hat executives took turns dismissing Oracle's Solaris ("When customers decide to jump from Solaris they go straight to Linux, skipping OpenSolaris") and Oracle's Linux strategy ("We've yet to lose a major customer over the last year to Oracle's Linux offering. The only one to leave Red Hat in the past couple of years is Oracle itself.").
Indeed, though Red Hat's JBoss business is growing much faster than RHEL, Red Hat seems devoutly focused to RHEL's staying power in a bad economy. The reason is financial: JBoss, as Whitehurst noted, often requires a significant upfront integration cost, which makes it less palatable for CIOs looking for short-term cost savings. RHEL, on the other hand, offers immediate, short-term gains.
Even so, Whitehurst was quick to point out that JBoss will continue to grow faster than RHEL, and that it, along with other Red Hat technology like Qumranet's virtualization products, helps position Red Hat as a leading infrastructure provider to the nascent cloud-computing market. ("It's hard to imagine why anyone would build a cloud on a proprietary stack in this day and age")
With profit and revenue up, Red Hat continues to impress, especially as it's not dependent on a competitor for its revenue, which remains the Achilles' heel in Novell's otherwise bright earnings reports.
The question is whether it can grow well beyond its core RHEL business. Linux is a great foundation upon which Red Hat can build, but build it must. Today very little of its sales come at Microsoft's expense. At some point in the not-so-distant future, the UNIX-replacement business will slow and Red Hat will need more than JBoss to compete with Microsoft.
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For all the discussion of the importance of transparency and openness on the Web today, it's very telling that the world's fastest-growing mobile platform may also be the most proprietary.
Apple wins rave reviews (including from me) on its technology but certainly not for its commitment to sharing its innovations with the world...unless, of course, you fork over $299 and sign a two-year mobile service commitment.
Indeed, Apple has earned the dubious honor of being more closed than Microsoft.
And yet, as Marc Hedlund reveals over on the O'Reilly Radar, application growth for the iPhone dwarfs that of the former leader in the smartphone category, PalmOS:
If openness matters so much, why is Apple doing so well with its uber-proprietary iPhone, just as Microsoft dominates the desktop with proprietary Windows?
There are at least two answers. One is that while Apple's iPhone (like Microsoft's Windows) isn't open in the open-source sense, it is open in the sense that it's easy to create applications that run on it. The second reason is that there's a huge financial incentive to do so, given the momentum behind the platform.
For some, these reasons aren't good enough, such as Mozilla Chair Mitchell Baker:
Many of us participate in closed systems where the rules are set for us and we don't see them, certainly can't change them, and aren't permitted to "participate" in building the rules. This is true of very popular web services. For example, I "participate" in Flickr and Facebook, but within the system and rules that those organizations set up to meet their own goals. That's fine; there's no reason for those sites to change.
Mozilla is trying to build a layer of the Internet that's different, where "participation" extends to the very core of what we build.
With 40 percent of Mozilla's Firefox written by outside contributors, it's clear that an open platform works for Mozilla to build a better browser, which is why Mozilla continues to improve the ways in which developers can contribute to it. But it's equally clear that there are other ways to be "open to participation," ways that pay the rent for Apple, Microsoft, and huge ecosystems of commercial partners.
Is one platform approach better than another?
While it's clear that the world has room for both proprietary-but-open-enough and pureplay-open approaches to platform building, I favor the more open approach. The reason is that eventually, it appears proprietary approaches can collapse under their own weight.
Take Windows, for example. To maintain its growth, Microsoft has had to include more and more functionality in the operating system, stepping on the toes (or outright devouring the toes) of its erstwhile partners. (Interestingly, while discussing whether openness matters for Apple over Google Android, Slate describes Microsoft's Windows approach as open.)
Eventually, Windows grew to such heft that the market, including Microsoft partners, started looking for open alternatives, causing then Microsoft chairman Bill Gates to dub Linux Microsoft's "most potent operating system competitor." The "good enough" operating system that performed certain tasks much more efficiently and powerfully than Windows has now grown to seriously threaten Microsoft in a range of applications and markets.
Eventually, even Microsoft's desktop dominance may be threatened by Linux as new classes of easy-to-use, cost-effective devices like Netbooks arise.
Back to Apple. Today, Apple's iPhone seems set to rule the world because it enables a huge community of application developers to reach a paying audience. Tomorrow, however, Google (Android/Linux), Nokia (Symbian, Linux), Palm (WebOS/Linux), and even Microsoft (Windows Mobile) threaten its cozy corralling of the mobile market.
Microsoft has made it clear that it's possible to build a massive business with an "open enough" approach to platform development. The question is, can Microsoft (and Apple) maintain that without truly opening up?
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Open source continues to move beyond its original confines of infrastructure software. Open-source application adoption is booming, while even the curmudgeonly router market is getting some open-source polish from Vyatta.
One area, in particular, that is getting an open-source makeover is e-commerce, with Magento apparently leading the pack with more than 750,000 downloads and a roster of great customers, albeit with strong competition from Oxid and Apache's OFBiz project.
Roy Rubin, CEO of Varien
(Credit: Varien)I've written about Magento before but wanted to dive in a bit deeper, so I contacted Roy Rubin, CEO and founder of Varien, the company behind Magento, for an update on the open-source e-commerce platform.
Q: Tell me about Magento. Where do you make your money and who is your typical customer? Can you give any data or statistics on how the company is doing?
Rubin: Magento is an open-source e-commerce platform that provides merchants with a sophisticated software platform to manage their online sales. Magento enables online businesses to develop and rapidly deploy multiple types of e-commerce sites from a single instance of the platform--globally.
Magento is available in two editions: Community and Enterprise. The business model is focused on our Enterprise Edition Subscription which provides additional set of features as well as product support, SLA (service level agreement), PA-DSS certification (soon) and warranties.
Magento is currently used by tens of thousands of merchants conducting billions of dollars in online transactions. We'll be reaching 1 million downloads by the end June 2009. In the first eight weeks since launching the Enterprise Edition Subscription, we've had over 7,000 merchants get in touch to learn more about our new product. We have closed a double-digit number of deals and now have a strong pipeline of merchants and solution providers that we are talking to.
A typical customer for us is an organization that recognizes the mission-critical nature of an e-commerce platform and expects a strong support/warranty/SLA as well as access to advanced enterprise features. Our customers today include Fortune 500s, midmarket brick and mortar retailers, pure-play Internet focused merchants, and smaller organizations.
What is your business/licensing model? Pure support (plus open source) or do you use an "open core" model, or something else? If so, how do you draw the line between open-source components and proprietary components? What determines whether something will be open or closed?
Rubin: We recently launched an "open core" model with the release of our Enterprise Edition Subscription. We've transitioned to this model after the first 12 months of business under a support model. With the Enterprise release, we've targeted the product towards a different market segment and the decision regarding the components available is primarily driven by our customers and partners. Our Community Edition road map and feature development will be determined by our Community Advisory Board, which we've recently formed to lead such initiatives.
Does Magento do particularly well in certain industries/geographies? If so, which ones?
Rubin: Our product today is primarily focused on the business-to-consumer (B2C) market. In terms of geography, we are doing exceptionally well in the North American and European markets, with the United States, France, and Germany being the most active and strategically important.
How has the recession affected your business?
Rubin: The economic climate has had a hugely positive impact on our business as medium and large-sized companies start to focus more on cost, flexibility, and time-to-market. Magento offers the same functionality as leading enterprise-class proprietary software providers in the e-commerce market but at 10 percent to 20 percent of the cost and much faster time to market. For online retailers, this is very important as every day offline is lost revenue.
Who are your top competitors, both open source and proprietary? Why should a prospect choose you over them?
Rubin: In the proprietary market, we compete against IBM, Microsoft, and a number of other players. In the open-source world, the competition is very limited, especially in the commercial open source market. There are some great open-source projects such as Apache's OFBiz.
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A bad economy is good for open source, goes the increasingly conventional wisdom. However, while it's undoubtedly a good time to be in the market with a low-cost, high-value alternative to proprietary software, there are tell-tale signs that the recession isn't blessing all open-source companies equally.
Ross Mayfield, co-founder of Socialtext
For example, at the Enterprise 2.0 conference on Tuesday Socialtext founder Ross Mayfield declared, in the words of a conference attendee via Twitter, that Socialtext's first quarter "sucked" and that its "pipeline collapsed." Socialtext, once described as a highflier in a "sizzling market," has apparently come down to earth.
Or has it? Is this a one-time blip for Socialtext? While Socialtext CEO Eugene Lee announced layoffs in April as the company looked to cut expenses, Mayfield on Tuesday declared that the company's second quarter looks strong. Even the best companies can slip in a brutal market.
Or perhaps Sociatext is fighting a weakness in enterprise collaboration ROI (return on investment) and demand, rather than open source?
If that were true, one would expect all companies in Socialtext's space to be hit equally, but this hasn't been the case. During this same first quarter, Socialtext competitor MindTouch experienced double-digit growth, while Microsoft's proprietary SharePoint product also continued to boom. (Disclosure: I am an adviser to MindTouch.)
I suspect Socialtext experienced a road bump, not a barricade. The difference is that, in true open-source style, Mayfield was candid about the slip up.
Open source remains alive and well. It's important to remember, however, that this doesn't mean every open-source company will do well.
Open source is not magic pixie dust that makes bad companies good. It's not a cure for the common recession. Companies still need to execute well, regardless of their licensing strategy. And, importantly, the wrong open-source licensing model can handicap a company, making it harder to profit from a project's popularity.
The recession, in short, will sift good companies from bad, whether open source or proprietary. As for Socialtext, its fate will not be decided by a single quarter. It's in a good market with a good model. It should do fine.
Follow me on Twitter @mjasay.
Despite pulling in 260,000 travelers at $199 each, Clear's expedited security-clearance program in 18 airports has shut down.
Verified Identity Pass, which operates the Clear service, said via e-mail and on its Web site that it was "unable to negotiate an agreement with its senior creditor to continue operations." The Clear service was suspended at all 18 airports as of 11 a.m. PDT Monday.
The message to Clear subscribers like myself: "Get back in line."
Ironically, Clear was apparently charging Clear subscribers' credit cards right up until the announcement, as revealed by the commenters to a Los Angeles Times' article on Clear's closure. I guess the company needs every little bit as it heads to bankruptcy proceedings.
Sigh.
Despite signing up for Clear almost from its inception, at first I wasn't a big advocate of the service (though CNET's Dave Rosenberg was). At my home airport in Salt Lake City, the difference between Delta's Medallion line and Clear's security lane was minimal.
But over the past few months, I've had more occasion to benefit from the service, and I can say that I will truly miss Clear. It has saved me from missing more than one flight. I want it back.
It would appear, however, that the cost of maintaining the service exceeds the roughly $52 million in subscription fees that Verified Identity Pass was able to bring in to support the Clear service. With costly biometric scanners and several Clear employees at each security station, it's not hard to see how the costs could add up.
Of course, Clear's various snafus and problems, as ZDNet's Jason Perlow writes, couldn't have helped.
Regardless, I doubt that many will appreciate Clear apparently renewing subscriptions right up until the moment the announcement of its closure. That's bad form. I understand the need to satisfy creditors. But in the age of blogs, Twitter, and Facebook, it seems like an ill-advised policy to charge for a service you're about to shutter .
Expect a backlash.
Clear's announcement via e-mail.
(Credit: Matt Asay)Follow me on Twitter @mjasay.
Reductive Labs, creator of the popular open-source IT automation project Puppet, has raised $2 million in Series A funding from True Ventures, the firm that also invested in (then) open-source marketing automation vendor Loopfuse.
Reductive plans to use the funding, which was announced Tuesday, to build out the functionality of Puppet, a move that won't win it any friends among competitors like Hewlett-Packard's OpsWare.
It's a good time for the company to be raising money. Counting such heavyweights as Google, Digg, Twitter, the New York Stock Exchange, Barclays Capital, Oracle, Sun Microsystems, Red Hat, Harvard Law School, and Stanford University, among others, as Puppet users, this Series A funding puts Reductive Labs in a prime position to add polish to the already powerful Puppet IT automation framework.
I caught up with Luke Kanies, Reductive Labs' founder, to ask him about the funding.
Luke Kanies,
Reductive founder
Q: You've eschewed raising money before now so...why now? What does cash give you that you couldn't (or wouldn't) do before?
Kanies: The last six to nine months has seen two significant changes for us: large company after large company is revealed to be a Puppet user (e.g., eBay, Oracle, NYSE, and large government agencies) and our current sales team isn't built to operate on their time frames or that widely. We also have spent almost nothing on marketing, and increasing funding there will help those companies already using Puppet to see how we can help, while helping those on the fence see the value of our solution.
Also, we've found that our primary constraint today is execution, rather than research or adoption--we have major development areas almost entirely planned and ready to execute, wanting only the funding for the development itself.
Chef claims to be a an upgrade over vanilla Puppet. Is the fundraising in part a response to Chef? How does this help you to compete against and beat the Chefs of the world?
Kanies: The fundraising is in response to our community's and customers' needs, not potential competitors. Chef is a somewhat similar open-source project but you can't buy support, training, or consulting for it, you can't get custom development done on it, and it's only been around for six months. We're obviously staying conscious of its potential to compete, but it's not on the radar for any of our customers today.
That being said, the funding helps us stay ahead of the curve; while Chef has to focus on maturity and becoming suitable for wider audiences, we can continue to play on Puppet's strengths there while we add the next level of functionality for our customers and community.
How is the business doing? Any statistics you can provide around Puppet adoption?
Kanies: In terms of public users, Red Hat, Sun, Stanford, Google, the Guardian newspaper, Shopzilla, Digg, Twitter, and Barclays Capital are just a few of the worldwide leaders using Puppet.
Our stats are relatively minimal, because we just haven't been able to fund much in that aspect of our marketing. But we've got more than 1,200 people on our users list, revenue is growing 300 to 400 percent this year--in a horrible recession--and our Web traffic is growing 400 percent a year.
HP bought OpsWare in 2007 for $1.6 billion, yet the OpsWare software is arguably less elegant and powerful than Puppet. Should HP/OpsWare be nervous?
Kanies: Yes. Our solution has already been chosen over both BladeLogic and OpsWare at multiple companies. People have picked a Reductive Labs solution for less than one-tenth the cost of a less functional solution from one of the big boys that takes longer to install and has a higher upkeep cost.
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