The market is clearly racing toward a bottom when we start looking to Monty Python for business advice and the most lucid (if profane) analysis of Google's announced open-source operating system, Chrome OS, comes from Fake Steve Jobs.
At least, not according to a survey of 200 IT executives by Computer Economics, which finds:
- About 49 percent of the IT executives surveyed plan to make further budget cuts in 2009.
- Almost 50 percent will spend less than what is allocated in their IT operational budget.
Not good, right? Well, it gets worse...
Forrester and Gartner are duking it out to see who can be gloomiest in their assessment of 2009 IT spending, as Baseline reports. Gartner sees global IT spending dropping 6 percent from 2008, while Forrester one-ups Gartner with a projected 10.6 percent decline. (Forrester had earlier projected a 3 percent dip for 2009.)
Actually, the economy being as rotten as it is, some companies are going against the economic grain by offering compelling open-source alternatives to traditional, proprietary software, as reported Wednesday. And it's intriguing to watch companies like Lockheed Martin get into open source as a way to shift costs and improve development of their software.
Yes, there are still open-source holdouts like Orange UK which has allegedly banned Firefox and anything more modern than Internet Explorer 6 from its call centers. The company is still accepting smoke signals as a form of communication, so we're trying to get the message through that open source can drive down costs and improve productivity.
That's OK. According to Forrester analyst Jeffrey Hammond, open source is "infiltrating the enterprise" on a grand scale now. What starts out as an interest in penny pinching turns into something much more, he says.
So, while I'm not cheering for ever-gloomier forecasts of IT spending, I will admit that I like the result: more open-source adoption.
Follow me on Twitter @mjasay.
Red Hat is at the top of its game right now, delivering quarter after quarter of impressive performance despite (or, perhaps, because of) a global recession. But it wasn't always thus. Despite a meteoric initial public offering in 1999, Red Hat spent years fumbling about for a winning game plan, dabbling in technologies that took it far beyond its core competence in operating systems.
Small wonder, then, that Red Hat today hasn't risen to the bait to move beyond its core competence.
In fact, it may well have been the burden of its IPO that set Red Hat scurrying to marry open-source ideology with hard-headed business acumen, a thought prompted by Red Hat's bizarre history of acquisitions. This history suggests that much of Red Hat's laser-like focus on core infrastructure today may stem from its wild forays into just about everything else in the past.
In 2000, Red Hat made five acquisitions: Cygnus Solutions (at $674 million, the most expensive by far), Bluecurve, Wirespeed Communications, Hell's Kitchen Systems, and C2Net. From secure Web servers (C2Net) to embedded systems (Cygnus) to e-commerce payment processing (Hell's Kitchen) to software for enabling wireless devices to communicate with the Internet and private networks (Wirespeed) to performance management (Bluecurve), Red Hat's acquisitions were scatter-shot and, ultimately, mostly a failure.
True, the acquisitions brought some excellent talent to the company (Michael Tiemann came from Cygnus, Michael Evans came from Bluecurve, etc.), but in terms of products, it's telling that the markets served by these early acquisitions are not markets where Red Hat does much today. Embedded? E-commerce? Nope.
In later years, Red Hat's acquisition strategy initially proved just as chaotic, but as the acquisition pace slackened, Red Hat's focus tightened. So, while 2001 saw Akopia (e-commerce) and Planning Technologies (consulting) join the fold, 2002 brought NOCpulse, a server monitoring solution, which bolstered the still-nascent Red Hat Network that Red Hat launched in September 2000.
Red Hat was no longer casting about for a business model. It had already discovered a winning model with the launch of Red Hat Advanced Server in March 2002, a move that would be augmented just a year later with the release of Red Hat Enterprise Linux in March 2003.
Since that time, Red Hat has eschewed anything that might distract it from its stated central mission: commoditizing and delivering superior value around core IT infrastructure, including (today) the Linux operating system and JBoss middleware.
In its early days, flush with IPO cash, Red Hat could afford to experiment with e-commerce, embedded computing, and applications (e.g., Red Hat actually picked up several content management systems as part of its spending spree). Today, Wall Street is unforgiving and would likely punish speculative acquisitions.
For new open-source companies, there's a lesson in Red Hat's current focus, but also in its early profligacy: good companies learn from mistakes and can overcome their teenage foibles.
There's another lesson: sometimes your competitors can pay dividends. After all, one of Red Hat's early investors was...Novell, an investment that made Novell over $100 million. That's foresight!
Speaking of which, the other company that has far more money than discipline is Google. Google may well be like early Red Hat, except orders of magnitude bigger. Could Google learn something from Red Hat's shift from an early affliction of ADD to solid, disciplined execution? I think so.
Follow me on Twitter @mjasay.
In May, I reported on the rising fortunes of Funambol, Mozilla, and other open-source companies. Signs of "green shoots" notwithstanding, the economy doesn't seem to be getting any better, but open-source companies continue to log impressive growth as open source pervades the enterprise, as Forrester analyst Jeffrey Hammond (@jhammond) recently noted.
Importantly, according to Hammond, while open source starts as a cost-saving exercise, it often morphs into something far more strategic:
[O]rganizations tend to start [with the goal of saving money with open source]. And then what tends to happen is the more that they become comfortable with using open source, and the more that they apply it successfully, the more they start to realize that there are benefits other than cost savings that they can take advantage of. And that's when you start to see them turn from open source opportunists into open source advocates.
Those "advocates" are funding the payrolls of a range of open-source companies. Here are just a few examples of those benefiting from this enterprise shift to open source:
- The VAR Guy (@thevarguy) reports that both xTuple and Sopera are profitable. While he doesn't comment on how much they're doing in sales, profitability is, in itself, a significant achievement. (Alfresco, my company, is also profitable, and I'm sure there are others. Please let me know.)
- Likewise, an open-source authentication and identity management company, announced that it is on track to record 100-percent sales growth in 2009. We'll call that a "pre-announcement."
- MuleSource, an open-source Service Oriented Architecture (SOA) company, reported "another record for the company, with a 140 percent year-over-year increase in quarterly bookings and over 100 percent growth for the year-to-date period."
- MindTouch, not to be outdone, also issued a release highlighting its revenue growth (without giving any gee-whiz statistics but did us the favor of providing a pretty graph). More interesting, however, is MindTouch CEO Aaron Fulkerson's (@roebot) review of the various things the company has done right and wrong in commercializing its open-source collaboration project (Spoiler: favoring an enterprise build over a "community build" via stability and support is a bad idea).
(Credit: MindTouch) - Meanwhile, though not financial reports, it's encouraging to see Kuali adoption take off in earnest within higher education. "The colleges involved say they have the potential to achieve millions in savings while gaining more control over technology systems that are essential to the smooth functioning of their institutions." Nice.
- Also, a member of the Perl community looks to Canonical's Ubuntu in search of a solid revenue model for Perl. Interesting read, though I'd probably look to foundations that have proved their financial mettle like Mozilla and Eclipse before I'd emulate Ubuntu, however much I may respect what Canonical is doing with Ubuntu.
Unfortunately, most open-source companies are private so the "earnings" reports are somewhat self-serving and mostly unverifiable. Still, it's good to hear of growth in the midst of a weak economic climate.
Disclosure: I am an adviser to MindTouch and MuleSource. I'll gladly report on other financial successes in the open-source world if you care to send them to me....
Follow me on Twitter @mjasay.
Roger Shuttleworth?
Turning to the sports news, I understood why:
Shuttleworth, masquerading as Roger Federer, had just beaten Andy Roddick to win Wimbledon and beat his own record for most Grand Slam singles titles in men's tennis history.
Not bad for a computer geek.
Shuttleworth was, of course, the first African in space, but it's nice to see him getting some exercise and devoting himself to terrestrial pursuits from time to time.
Of course, it's possible that the whole Ubuntu thing is actually Federer's claim to fame. Perhaps Federer is the real open-source geek-cum-tennis pro while Shuttleworth is the sham?
Mark Federer?
Neither have I. Whenever Federer and I hang out, Shuttleworth is always curiously absent, yet shows up soon after Federer leaves.
Some people think Roger Federer and Mark Shuttleworth simply look like each other. But I'm not fooled. I know the truth.
They're one and the same.
Or maybe they're twin brothers separated at birth.
;-)
Follow me on Twitter @mjasay. But notice the timestamps: you'll never find me Twittering at the same time as Richard Stallman. Coincidence?
It was just a matter of time before Google stopped pretending it doesn't compete with Microsoft and introduce its own operating system to go head-to-head against Microsoft. As reported by CNET, Google has now lifted the covers on its Google Chrome OS, "an open source, lightweight operating system that will initially be targeted at netbooks."
More specifically, while Google claims Chrome OS looks to the future of a Web-friendly OS, this is precisely the future that Canonical's Ubuntu has been envisioning and actively courting. It's therefore not surprising that Ubuntu enthusiasts like Renai LeMay ask why Google apparently elected to "splinter the Linux community" rather than "leverage the stellar work already carried out by [Ubuntu]."
Why indeed?
Well, because Google clearly wants to pull a Microsoft. Yes, Google has stated that "[a]ll web-based applications will automatically work," and not just on Chrome OS, as doing otherwise would be suicide, but you can bet that Google will fine-tune its own applications to privilege their performance on its OS...just as Microsoft has. At least Microsoft doesn't ask the open-source community to help it in such work.
Google may well be focused on simply creating a "delivery mechanism for a web browser," but as Gunnar Hellekson opines, there are far more efficient ways to do so. Hellekson goes on:
Google keeps dropping these code bombs on the [open-source] community -- that's a really expensive way to produce something nobody wants to help with.
In short, don't expect the open-source community to do Google's work for it, work that Google may not be particularly well-suited to do.
All that said, I'm glad to see more competition in operating systems, and think Google will do a lot to help push the state of the art, just as it has in browsers. But let's be clear: Google's announcement is neither cause for widespread elation (open-source world) or fear (Redmond). As ZDNet's Dennis Howlett explains:
Where's the secret sauce here other than the Google halo effect painted over with the browser and duly hyped by the SV Google lovers?...[T]he reality is no one outside the Silicon Valley tech bubble gives a damn what operating system and browser they use. Many are still mandated to use IE6 as a colleague reminded me the other day. Simply having Google wave its hand is not going to sway hard nosed enterprise buyers - even if it is free. Which neatly brings me to another point.
Google has said it wants to get help from the open source community. I'll bet they do. All those drivers that [TechCrunch editor Michael] Arrington dismisses with a wave of the hand WILL need to be served. If he thinks I'm wrong then a quick call to any of the major banks' CTO offices should put him straight on that one....Even...when ChromeOS does emerge it will be a v1.0. No enterprise buyer I know will go within a country mile of committing its users' kit to something at that level of maturity.
In other words, Chrome OS has a long way to go before we see it hit significant volume of adoption, no matter how good it ends up being, and particularly enterprise adoption.
As for how good it will be, Robin Yellow, a friend who works in IT for a Fortune 100 company, notes that "Google are a bunch of young people in California who ride Segways and wear their pajamas to work," which may not be the ideal bunch to create software that enterprises of the world want and will trust. That's a concern shared by Red Hat's director of product management, Rich Sharples, who worries: "What Linux needs is a true consumer-grade desktop - the Google experience still seems to be aimed at the tech savvy."
Google opted to "build" its own Linux distribution, rather than use a wildly popular, Web-focused OS like Ubuntu. It is doing so with a team that lacks Microsoft or Apple's flair for enterprise and consumer, respectively, and has asked for the open-source community to make up the difference.
Good luck with that. Open source does many things exceptionally well. End-user design doesn't tend to be one of them.
I respect Google's technological savvy. I respect even more the development chops of the open-source community. Unfortunately, I don't think either is a near-term, credible developer of a consumer-friendly OS that will motivate people to want to move from their Macs or Windows machines to adopt Google Chrome OS.
That's why I think CNET's Ina Fried should change her headline from "To challenge Google, Microsoft might want to think Apple," to "To challenge Microsoft, Google might want to think Apple." Google is the challenger, and the reality is that exceptional design, not merely technology advances, is what will drive consumer change.
If Google needs a reminder of this, it need look no farther than Android, its open-source alternative to Apple's iPhone OS, which is long on technology and short on success, precisely because it fails to understand and allure the consumer.
If Google really wants to leverage the power of open source and outdo Microsoft and Apple in ease of use, perhaps it should find a way to broaden the base of the open-source development community to include average users so that your mom, my brother, etc. can provide feedback on how to improve ease-of-use of Chrome OS. Now that would be innovative.
Follow me on Twitter @mjasay.
Microsoft has divided opinion in the open-source world for years with its love/mostly hate relationship with open source. While the company has seemingly warmed up to open source in the past two years, its continued patent club has hung over projects like Linux. On Monday Microsoft sheathed the club for the open-source Mono project, but arguably needs to go much further to justify celebrations.
Mono was open source, in other words, but only usable for a select class of developer.
It therefore surprised some when Canonical, the company behind the Ubuntu Linux distribution and an ardent opponent of software patents, decided to include Mono in its standard distribution. The company publicly defended its decision and, in my opinion, was right to do so. It's simply a matter of pragmatism, as John Mark Walker points out because "if we ditched all free software for possible patent violations, we'd have nothing left."
Now Microsoft has ostensibly made everything easier for Ubuntu and the rest of the Mono-using world, by pledging not to assert its patents against Mono developers, distributors, and users (i.e., those that implement C# and CLI, ECMA specifications 334 and 335, as Mono does).
While Mon's chief developer Miguel de Icaza celebrated Microsoft's decision ("I am overflowing with joy right now"), Dana Blankenhorn asks if Microsoft's Mono moment will end up fracturing the open-source movement (or, at least, the Free Software Foundation and Ubuntu). Meanwhile, Sean Michael Kerner queries whether Mono will benefit from Microsoft's promise not to be Microsoft and threaten the world with patent-infringement suits.
Ultimately, however, the real question is, "Who cares?" As IBM's Bob Sutor, vice president of Linux and Open Source, suggests, Mono is small change compared to Linux:
With Microsoft making promises about Mono, they should pledge that they will not assert their necessary patents against the Linux kernel.
Bingo. Mono is small change. Linux is big money. If Microsoft can overcome its allergic reaction to Linux, we might actually be making progress.
Microsoft's Mono decision is an example of Microsoft discovering it needn't squash the small child it has already invited to play in its sandbox. Extending its "Community Promise" to Linux would demonstrate that the company is committed to joining the 21st Century and competing on the basis of its technical merits against Linux, rather than its patent portfolio.
The U.S. patent system being as messy as it is, it's certain that Linux violates Microsoft patents...just as it's certain Microsoft violates Linux-related patents held by IBM and other Linux proponents. It's time to call a cease-fire and get back to delivering value, not intellectual property promises and threats, to customers.
Update 9:17 a.m. PDT: I inadvertently conflated Microsoft's Community Promise to extending to Mono, rather than the ECMA standards 334 and 335.
Carlo Daffara, an open-source consultant, rightly notes that Microsoft's patent promise is not directly on Mono, but rather on these ECMA standards, which leaves "most of Mono...encumbered as before (WinForms, ADO.NET, ...)."
Mono founder Miguel de Icaza recognizes this and plans to deal with it:
Astute readers will point out that Mono contains much more than the ECMA standards, and they will be correct. In the next few months we will be working towards splitting the jumbo Mono source code that includes ECMA + A lot more into two separate source code distributions. One will be ECMA, the other will contain our implementation of ASP.NET, ADO.NET, Winforms and others.
It's a useful distinction, but doesn't detract from the original premise (if anything, it amplifies it): Microsoft has taken baby steps toward competing with open-source projects like Mono and Linux on technical merit, but it needs to do far more. Granting its "Promise" to Linux would be a big step in the right direction.
Follow me on Twitter @mjasay.
VideoLAN VLC's logo
VideoLAN's VLC media player, arguably the world's best media player, hit version 0.9.9 in early April. Three months and more than 78 million downloads later, VideoLAN has announced VLC 1.0.0, or "Goldeneye."
Your media will never be the same.
In fact, with VideoLAN's VLC media player for Windows, Mac, and Linux, it doesn't have to be. One of the amazing things about VLC is that it can play anything that you've ever even thought about playing. That random media format that one site in Ecuador requires--VLC likely plays it, while Windows Media, Apple QuickTime, etc. likely will not.
This is, in part, a natural result of VLC's open-source heritage. Licensed under the GNU General Public License, VLC attracts a diverse array of developers with disparate media interests. Those interests translate into a media player that really can play every obscure media format I've ever thrown at it. (And in my hunger for Arsenal videos, I've found many different video formats that Windows Media, Apple QuickTime, etc. didn't know what to do with.)
Here are a few of the features now available in VLC 1.0.0:
- Live recording
- Instant pausing and frame-by-frame support
- Finer speed controls
- New HD codecs (AES3, Dolby Digital Plus, TrueHD, Blu-ray Linear PCM, Real Video 3.0 and 4.0, ...)
- New formats (Raw Dirac, M2TS, ...) and major improvements in many formats
- New Dirac encoder and MP3 fixed-point encoder
- Video scaling in full screen
- RTSP Trickplay support
- Zipped file playback
- Customizable toolbars
- Easier encoding GUI in Qt interface
- Better integration in Gtk environments
- MTP devices on Linux
- AirTunes streaming
I regularly use VLC to transcode media files, including files I originally streamed from the Web:
VLC can transcode virtually any media file.
(Credit: Matt Asay)If you don't have VLC, I encourage you to download it and give it a try. It really is an amazing media player, one that has far more tricks up its sleeve than the proprietary media player that came with your computer.
Follow me on Twitter @mjasay.
The open-source community has a long tradition of looking for and hounding away at the very thought of Microsoft influence from government IT policies.
For example, Open Source Initiative President Michael Tiemann rightly decries an alleged tie between the Bill and Melinda Gates Foundation's charitable donations and Microsoft's "cabinet-level access to inform policy."
Apparently, however, Tiemann has no problem proudly displaying a picture of Brazil's president, Luiz Inacio Lula da Silva, wearing a Red Hat fedora, declaring...
Would that all Presidents and all ministers of all countries were so concerned about the sovereignty of their nation and the fiduciary care of their people!
...that they'd openly stand behind one vendor? That doesn't sound much like a sovereign act to me.
In fact, it sounds exactly like the sort of bias that the open-source community routinely inveighs against. Imagine the outcry if President Lula would have been seen posing with Bill Gates, wearing a Microsoft t-shirt?
Mark Taylor, president of the U.K.'s Open Source Consortium, lashed out against the U.K. government "pay(ing) lip service" to open source while "actually pursuing policies that are exclusive." Presumably it would be better if those "exclusive" policies actually favored a particular open-source vendor or technology?
That seems to be the message coming out of Europe, too, in its proposed policy changes around the purchase of standards-based technologies, which some suggest amounts to a built-in bias for open source. Policies that promote openness, generally, are good, because they help to protect a country's sovereign interests.
But when a country's leaders are seen to be supporting a particular vendor, even a vendor of open source and open standards, that strikes me as just the sort of favoritism that we disparage when the beneficiary is Microsoft. Just because it's bias in our favor doesn't make it right.
Back to Brazil. Sun Microsystems' Simon Phipps also posted pictures of President Lula wearing the Red Hat fedora, but also a Sun Java ring. (The president apparently said it made him feel like "James Bond.") At least Java is a technology, not a vendor, which makes this act of Lula less...loony.
Simon Phipps and Lula show their open-source colors
(Credit: Simon Phipps)That said, the ironic thing is that while Phipps points to the benefits Brazil derives from its commitment to open-source Java, he neglects to note that Brazil had this same commitment to Java long before it was actually open source.
Regardless, in describing Lula's affection for open source Phipps unwittingly makes him sound like an open-source groupie, which is hardly how I'd want my president to act, either for proprietary or open-source interests.
A sovereign nation should be just that: sovereign. Its leaders shouldn't bow to particular vendors or even particular development practices, nor should they be perceived to do such. For Brazil, it's immaterial whether the company is Sun, Red Hat, Microsoft, or SAP: it is a sovereign nation and should act as such.
A government tasked with the protection of its people should never look like a cheap infomercial for any vendor--either open source or proprietary.
Follow me on Twitter @mjasay.
It was bound to happen. With the U.S. government promising truckloads of cash to overhaul the U.S. health care system, while simultaneously making positive noises around open source, it was just a matter of time before someone connected the dots.
That someone appears to be Joanne Rohde, former executive vice president of worldwide operations at Red Hat, who has launched the Axial Project, a stealth-mode start-up that aims to "combin[e] the principles of Open Standards and Open Source...to connect all the parties in the Health ecosystem safely and securely."
It's a big task, but then, that's precisely what open source is good for tackling.
Indeed, as I've written before, the U.S. health care system, with its myriad of providers, insurers, etc. is ripe for open source. Open source isn't a panacea, but it has proved itself adept at resolving precisely this sort of complexity, with Linux and the various Apache projects as just two examples.
I've been talking with Rohde for at least a year now--most recently meeting for breakfast in Raleigh in April--and have enjoyed seeing her ideas germinate and flower. The company has gone through various guises (and names: as late as April, Rohde was calling the company EHRmail), and is now growing to meet the challenges ahead of it.
Axial has been quietly assembling a team of seasoned veterans from Rohde's Red Hat and UBS past, including Michael Yuan and John Casey, but most recently Matt Mattox, Red Hat's director of ISV alliances, who announced via e-mail his move to Axial:
(Credit: Matt Asay)Axial has not yet raised venture funding, but planned to raise its seed money through alternative avenues, at least as of my April conversation with Rohde. Given the company's mission--to build an integration tool kit around a message broker for health IT companies, universities, and corporations that allows sending and receiving of data across existing infrastructures--coupled with its open-source approach and roster of seasoned executives, I'm guessing funding won't be an issue.
The real issue is whether even open source is powerful enough to fix the U.S. health care system. Good luck to Mattox, Rohde, and the Axial Project team as you seek to answer that question in the affirmative.
Follow me on Twitter @mjasay.
I've suggested before that Index Ventures could well be the "best venture firm in Europe." Index has one of the most interesting investment portfolios of any venture firm on the planet, having invested in companies like Skype, Openads, Oanda, DimDim, and others.
Mike Volpi, Index Ventures new Partner
Today, Index became even more interesting, adding Michelangelo ("Mike") Volpi to its investment team as a partner based in London. Volpi was most recently the CEO of online video company Joost, but made his name as the mergers and acquisitions maestro at Cisco, where he oversaw 75 acquisitions.
Given Volpi's background as a deal-maker, the question is whether he's going to be investing for Index or selling for Index.
The answer is "both," of course, and Volpi's recent failure with Joost should prove useful instruction for his future Index investments, as suggested in an interview with D: All Things Digital. Look for Volpi to take a hard-headed view on Internet business models: less advertising, and more transactional business models.
Index was already a leading light in the global venture investment constellation. Adding Volpi should make it even better.
Follow me on Twitter @mjasay.
