The Open Road

The mobile-computing world is increasingly a two-horse race between Google and Apple, with Apple clearly in the lead but Google Android making up ground quickly. Microsoft and Symbian are also still in the game, but the ultimate winner will be the one that best appeals to consumers or developers.

Or both.

Sexy? Yes. But what about the developers?

This struck home while reading Mark Sigal's analysis of the "inevitability" of Google Android. On his way to dismantling the idea that Google's victory is assured, Sigal stumbles into apparently divergent interest groups:

[U]nlike the PC, where "good enough" was the bar required to seize the market,...for most consumers, their mobile device of choice is a lifestyle decision, a personal, ever-present extension of themselves that is resident in a way that never existed before with the PC--a value proposition that Apple has completely run with on iPhone (and iPod before that).

Fundamentally, though, mobile is a platform play, a game that is largely won by securing the hearts and minds of developers, and for them, the expectation bar is now set pretty high, owing to the success of iPhone across so many domains....

If you're Google (or Microsoft or Symbian), then, who do you target? Developers or consumers?

It's a real question, as while both parties' interests ultimately converge (consumers want developers to make great applications so that those same consumers can pay the developers lots of money), the short-term interests of consumers (sexy product) and developers (ease and richness of development platform) don't necessarily go together.

Motorola RAZR? Sexy product, lame development platform. Windows Mobile? Arguably a solid development platform...with almost zero sex appeal for consumers.

This is why John Carroll is probably right to argue that Microsoft should reinvigorate its mobile strategy with an emphasis on .Net as a powerful way for developers to write powerful mobile applications, it's not going to be enough. Microsoft can port all the business applications it wants for Windows Mobile. It won't matter.

Consumers don't buy business applications. Not until after they've chosen a phone that meets their personal needs, first.

Yes, enterprises do try to dictate corporate standards with Blackberrys and dull Dell PCs heading the list. But in the fast-changing mobile market, you can't hope that consumers will be forced to use your software. You want them to want to do so.

This is why I believe Google has a good chance of taking a serious bite out of Apple, and Symbian and Microsoft do not. Symbian is too difficult an application development platform, as Gartner notes, and Microsoft...is boring.

Not that it needs to be. XBox certainly isn't, and actually helped Microsoft surpass Apple in a recent consumer survey focused on product innovation.

But not in mobile, or even in computers. Apple understands how to create wicked cool products that consumers want, which is why its Mac sales are projected to grow by 26 percent in 2010, right through the recession, and why its iPhone continues to thrive.

But Apple's Achilles heel could well be developers, which are reportedly tiring of Apple's apparently arbitrary application approval and updating process. If Google can continue to help handset manufacturers to achieve the "Wow factor," while simultaneously creating a more open, robust development platform, it just might be able to beat Apple at the game it started.

In other words, the winning mobile vendor will be the one that marries sex appeal for consumers with platform appeal for developers. Google is on course to deliver, but it probably needs to win big with consumers before it makes waves with developers.

For those entrepreneurs looking to make a living from open-source software, Index Ventures general partner Bernard Dallé has some advice: get thee to a cloud strategy.

Bernard Dallé

(Credit: Index Ventures)

Why? At a time when enterprises may be less willing to spend on software, they're increasingly interested in spending on the operation of that software through cloud computing, an interest that can be bought...and sold.

The cloud isn't simply a clever way to provide social-networking services, either. As Dallé suggested in a phone interview on Wednesday, cloud computing may well be the best way to monetize enterprise-facing open-source software.

He should know. Index Ventures has been one of the most successful investors in the changing world of software, hitting home runs with MySQL, Skype, and more. So when Dallé says that as much as 70 percent of the investment opportunities they see now are cloud-related, and that this bodes well for open source, it's worth paying attention.

Given that the cloud renders software less visible to end users, I asked Dallé if cloud computing spells the end for open-source businesses. Far from it, he said:

I think it's good news. I don't think open source is going away. It's here to stay. The world is increasingly moving to a hybrid world: a combination of on-premises and cloud computing. We're not going to see a 100 percent cloud world.

If I look at our portfolio, even our "open-source companies" like Pentaho, OpenX, and DimDim are turning to the cloud to monetize their open-source software assets.

Open source provides a convenient on-ramp and off-ramp for customers, helping them evaluate the software at low to no cost and also gives a free (as in cost and as in freedom) exit in case things go wrong. Between that entrance and exit is a ripe opportunity to make a lot of money by delivering value to customers.

Dallé further explained that open source helps vendors reach customers through low-cost distribution, but cloud computing, importantly, makes the open-source software palatable to a class of customer that finds open source too risky, yet has no problem using it when hosted.

If this sounds like a potent mix, it's because it is. It's also a highly efficient, low-cost way to start and build a company. Dallé elaborates:

The other big trend, not related to open source, is cloud-on-cloud: cloud services running on other clouds. It used to be that everyone ran their own data center, but now an increasing number of companies are happily running their services on Amazon EC2 or other public clouds. This dramatically lowers the cost of starting a service, and starting a company around it.

This might raise the concern that we'll see too many open source/cloud companies, not too few. Dallé isn't worried: "The quality of an investment always comes down to the quality of the people involved and their execution."

If Dallé's correct, the right place to look for open-source businesses to flourish is at the nexus of on-premises open-source software and cloud computing. It could prove to be a potent mix. And while the cloud might not be the right delivery platform for some software, it probably does have a high degree of salience for many.

President Obama is gathering 100 leaders from across the U.S. for his jobs summit in Washington on Thursday to brainstorm how to create new jobs.

While the list of invitees is heavy on academics, labor unions, and business, it appears only two people from technology made an early invitation list: Eric Schmidt, CEO of Google, and Jim Whitehurst, CEO of Red Hat.

FedEx. Yes. Nucor. Yes. But no Microsoft. No Oracle. No Salesforce.com. What gives?

Yes, Schmidt is a key advisor to Obama. But his invitation, along with Whitehurst's, could have a lot to do with the fact that Google and Red Hat, unlike many of their peers, are actively hiring.

Red Hat and Google have thrived through the recession, perhaps suggesting that they have a clue as to what it will take to create new jobs in a tough economy, one that has seen 23 straight months of job losses.

Intriguingly, Google's hiring may be crimped more by a desire not to aggregate all of the best and brightest than an inability to do so, as evinced by Google Vice President Bradley Horowitz's comments at Supernova this week.

When I asked Whitehurst on Wednesday what he thought the two companies had in common, he was quick to respond: "open source."

It's an interesting observation. While the two companies use open source in different ways, their business models are actually more similar than different, and both depend on open source.

As I've written, both Google and Red Hat (along with Facebook and other new-school "software" companies) depend upon and help to create abundance--of code, of Web sites, of information--and then make money by filtering that abundance.

It's a model that works, and it's a model that heavily depends upon and contributes to open-source software.

It would be going too far to suggest that open source is the critical component of any successful technology business today, especially as just about every company now includes it in their offerings in some way. Plus, CIOs have discovered other ways to stretch IT budgets and keep their workers on the payroll, as Gartner advises.

But the mentality of open source--more with less, sharing code and expertise--does seem to be a hallmark of successful technology companies, and particularly at Google and Red Hat.

Everyone hates patent trolls (except, perhaps, the patent trolls' mothers). But it's easier to despise patent trolls when you either have a lot of patents, or none. What if your company were awarded a significant patent that could be used to shake down Google and the rest of the industry for corporate benefit.

Or buy food for your family?

Is it your fiduciary duty to exercise that patent? Is it a personal duty? And do you have the legal right to do so?

The first two questions are tricky, but the last one is currently being considered by the U.S. Supreme Court. Consider yourself lucky that you don't have to decide it.

Bilski and business method patents

Recently, the U.S. Supreme Court heard oral arguments in the controversial Bilski case where IBM, typically friendly to open source and innovation, backed the wrong horse. According to The Wall Street Journal's coverage of the arguments, the justices were skeptical--if not contemptuous--of the case put forward by Bilski and the proponents of business method patents.

Chief Justice John Roberts quipped that business method patents are akin to patenting the idea that "I buy low and sell high. That's my patent for maximizing wealth."

Silly when presented in this way. But perhaps silly when presented in just about any way.

Business method patents came into being 20 years ago with the Federal Circuit's State Street decision, the case that spawned Bilski. Two of the best-known technology examples of such patents are Amazon's one-click checkout and Priceline's reverse auction.

In a September blog I took IBM to the woodshed for its stance on Bilski. Big Blue filed an amicus brief (PDF) that I argued was disingenuous at best. IBM argued:

Patent protection has promoted the free sharing of source code...which has fueled the explosive growth of open source software development.

Really?!?

IBM was not alone. Novartis, the big pharmaceutical company, also filed a supporting brief.

The industry's moment of (in)decision

I think that the Bilski case is a divider of wheat from chaff, a moment that forces technology companies to take sides on a critical issue that goes to the heart of innovation in our economy.

On one side, companies such as IBM and Novartis maintain that patents should not be tied to "primitive physical technology" but should also embrace a broader range of modern business activities.

But other companies, including Google and Symantec, took the other side and filed briefs (PDF) with the Supreme Court arguing that expanded business method patents would open them up to infringement lawsuits over the "very mental processes and ideas that are the building blocks of innovation."

What would you do? LogLogic and Sponster examples...

I was reminded of this issue by an announcement today from LogLogic, a log management and security company I wrote about last year as an example of the pervasive use of embedded Linux.

LogLogic was granted a patent in October that appears to be rather sweeping in its scope, covering the collection of logs and the management of the data in those logs.

Imagine if LogLogic went "troll" with this patent....

At a minimum it could be a nuisance to its competitors and at a maximum it could possibly shake down any company that sold a product that relied on log collection (describing hundreds, if not thousands, of products on the market today).

Or how about this one? Sponster has a patent on a system for delivering contextual ads against electronic messages like e-mail, SMS, tweets, etc. Google filed for a similar patent, but over a year after Sponster, and while Sponster's patent was recently granted in October, Google's was denied. (Disclosure: I know and am friends with one of the Sponster executives.)

On the one hand, Sponster could go troll and sue just about everyone on the Web. On the other hand, I know from talking with the executives that they have no desire to do so. The fact that the company has not sued anyone in its six-plus years of existence is a clear indication of this. Sponster wants to build its business around the patent, but Google or Microsoft with their heft can squash that desire.

Should Sponster fight or capitulate? It's easy when you think of patent trolls as trolls that create no real value. But what about when they are real people and real companies like Sponster and LogLogic?

LogLogic makes its choice

LogLogic appears to have made its decision. In a company blog on Wednesday, a LogLogic executive points out the potential harm they see in a Bilski decision by the Supreme Court that would allow broader business patent methods.

LogLogic also (correctly, in my view) argues that the anti-business method lobby of Google et al "represent[s] the true innovative spirit of Silicon Valley where entrepreneurs are rewarded for risk taking and embrace the thinking of Austrian economist Joseph Schumpeter and creative destruction."

LogLogic decided to take a defensive posture with this sweeping patent rather than go troll. Who knows what Sponster will do, or should do. Presumably it worked just as hard on its technology as Google: shouldn't it get paid?

More broadly, do you agree with IBM that business methods should be upheld, or with Google that they should be crushed? What would your company decide to do? Where do you stand?

Open source is now mainstream and routinely used in mission-critical applications. For 99.999 percent of the people reading that statement, it's so obvious as to induce global yawning. But for Peter Gyorgy, chief information officer of GE's Consumer and Industrial division in Europe, it's apparently heresy.

Gyorgy is quoted by eWeek as follows:

I think open source is great for own internal playground type of things, but if it's running vital mission critical applications--networks running on open source for example--then that is a huge, huge risk to the organisation....

We are not here to be an IT shop, we are here to be the partner of a business and we shouldn't put businesses operations into risk by running very low cost solutions.

So much factual error, so little time.

First, it's ridiculous to suggest that because something is "low cost" it is inherently risky. Gyorgy seems to believe that the more he spends, the safer he is. Last time I checked, Google et al. were running their networks at more significant scale than GE, and all on open source.

Maybe Gyorgy simply doesn't like equal or better performance for less money. In this, he's apparently alone. The 451 Group's survey data has roughly 90 percent of the 1,700 IT executives surveyed declaring that they have realized cost savings with open source. These are IT executives that a few years ago might have shared Gyorgy's views on open source.

No more.

But Gyorgy needn't trust strangers. He could just talk with his colleague, Laurent Rotival, senior vice president and general manager of Enterprise Solutions, GE Healthcare who, in conjunction with one of the leading health care providers in the United States (Intermountain Health Care) and Red Hat, put together a Linux-based health care system that he describes as "state-of-the-art" and that "presents less risk for our customers, protects their total costs of ownership, and ultimately takes them from a legacy architecture to a state-of-the-art architecture."

Left hand, meet right hand.

Second, Gyorgy's assertions are ironic given GE's widespread use of JBoss, Linux (in GE Healthcare and elsewhere), Alfresco, MySQL, and other open-source projects, in Europe and globally. Contrary to Gyorgy's assertion, these aren't "internal playground type" applications. Some of them are mission critical by anyone's standards.

I am personally familiar with several of these.

So is Gyorgy's boss, GE's global CIO Gary Reiner. Reiner not so long ago purchased an enterprise subscription for MySQL when he discovered that GE was running MySQL all over the place, and not solely for internal "playground" sort of applications.

Apparently, no one sent Gyorgy the memo that spells out areas in which GE is actually sponsoring open-source projects (like VTK), in addition to its broad adoption of open source. I suspect Gyorgy isn't the only one to have missed the memo. After all, the CIO is the last one to know.

Mike Milinkovich

(Credit: Eclipse Foundation)

Open-source communities are founded on trust. It's therefore disappointing but not surprising, to see the Eclipse Foundation's executive director, Mike Milinkovich, rip into former Eclipse Foundation director of community Bjorn Freeman-Benson and tell him to take his "steady acid drip of negativity" and "go away."

Milinkovich, a steelie, hockey-playing executive, didn't mince words in a blog post:

Your former colleagues at the Eclipse Foundation have tolerated your public abuse quietly because we are professionals, and we honestly thought that you would tire of it. Apparently we were wrong. But the time has come to say it: You are a jerk. Please go away. You quit the Foundation, you have zero commits since April, and we tire of your sniping from afar.

Not the most diplomatic but better than a body check against the glass any day.

Given Freeman-Benson's constant carping on the foundation and his former colleagues, it's understandable that Milinkovich went on the offensive. In a variety of posts, including the one that prompted Milinkovich's post, Freeman-Benson has sought to undermine the Eclipse Foundation, which has successfully managed one of the industry's top open-source projects.

His criticism may have been fragmenting the trust that held together the Eclipse community.

Indeed, as Eclipse Foundation director of marketing Ian Skerrett told me, "There is a long history of troll-like blog post[ing] that built up to this point; yes, it is harsh, but it was hurting the community."

Call it tough love for the open-source set. Given the existence of poisonous individuals in many open-source communities, it may be "love" we see more often.

Desperate for a deal after sleeping right through Wal-Mart's early-morning Black Friday frenzy? You're in luck. The best deal this holiday season may be just a download away.

(Credit: Handbrake)

And boy, is it beautiful.

Handbrake has long been my go-to choice for ripping DVDs to my hard drive (saves battery life when watching videos while traveling and ensures my kids won't ruin the DVDs), but this particular version exceeds my expectations. Why? Because it delivers over 1,000 new enhancements while delivering better picture quality at a smaller file size and faster.

Or as the Handbrake developers say:

There's an old proverb in the video encoding world: "Speed, size, quality: pick two." It means that you always have to make a trade-off between the time it takes to encode a video, the amount of compression used, and the picture quality. Well, this release of HandBrake refuses to compromise. It picks all three.

This isn't hype. In my own use of the software during the past week, performance is noticeably faster, and picture quality is awesome.

Importantly, while the Handbrake developers have been hard at work over the past year to update the venerable video transcoder, the team owes a lot to developers from the x264 project:

A large portion of these speed, size, and quality improvements come to us for free, from the x264 project. The past year, like every year, has seen some massive improvements for that video encoding engine. As always, it has been further hand-optimized for better performance. But it has also gained new features like macroblock tree rate control and weighted P-Frame prediction.

This is how open-source development works: Handbrake focuses on what it does best (User interface, features like live preview, etc.) while leveraging the best of other project's strengths.

It's a recipe for a supereasy and very powerful transcoding experience. And at a 100 percent discount now through forever (Handbrake is open source and costs nothing to download), now is a good time to download it and let 'er rip, whether you run Mac (Intel 32-bit and 64-bit, plus PowerPC), Linux, or Windows.

When an open-source project is working optimally, can proprietary-software companies hope to compete?

Eat my dust, proprietary sloths

Greg Kroah-Hartman, a prominent Linux kernel developer and Novell fellow, suggests that the answer is no. Speaking to the How Software Is Built blog, Kroah-Hartman makes the case that the pace of Linux development leaves competition in the dust:

[The Linux kernel development team adds] 11,000 lines, remove[s] 5,500 lines, and modif[ies] 2,200 lines [of code] every single day.

People ask whether we can keep that up, and I have to tell you that every single year, I say there's no way we can go any faster than this. And then we do. We keep growing, and I don't see that slowing down at all anywhere.

I mean, the giant server guys love us, the embedded guys love us, and there are entire processor families that only run Linux, so they rely on us. The fact that we're out there everywhere in the world these days is actually pretty scary, from an engineering standpoint. And even at that rate of change, we maintain a stable kernel.

It's something that no one company can keep up with. It would actually be impossible at this point to create an operating system to compete against us. You can't sustain that rate of change on your own.

Microsoft might beg to differ, as would Apple, but the reality is that neither is updated as often or as extensively as Linux is, which supports a far broader hardware portfolio than any other operating system in existence.

Linux is pretty incredible. But it's not alone. Mozilla Firefox, Eclipse, and other projects produce best-in-class software at an almost frightening pace.

Can anyone compete with an open-source project at the top of its game?

The answer might well be no, as the top open-source projects are collaborative efforts between multiple companies that pool resources and expertise to drive development. And while it might seem reasonable that a single corporation could best open source's seeming "development by committee" approach, the reality is that well-managed open-source projects have none of the inertia that one might expect from a communal approach.

Quite the opposite.

Having said that, very few open-source projects actually meet the criteria that enable Linux's success. Most appeal to a too-narrow and too-small population of developers (i.e., single-company projects) to glean the benefits and scale of Linux-like development.

As such, the proprietary-software companies probably won't have to worry about competing with indomitable open-source competitors. Not most of the time, anyway.

For those that do, however, better stock up on the pumpkin pie. It may be the only thing to be grateful for this Thanksgiving season.

Greg Kroah-Hartman interview discovered via @glynmoody's ComputerWorld blog.

Life has never been better for enterprises and consumers. From free music to free software, the digital economy is an all-you-can-eat free-for-all.

That is, unless you're a vendor.

Traditional vendors are getting shellacked by the digital economy, spurring some, like Rupert Murdoch and his News Corp., to threaten to stick a finger in the dike and demand that users pay for content. (At Murdoch's Wall Street Journal, users already do pay to access some stories online.)

The problem with this approach is that not everyone is willing to follow suit. Why? Well, not everyone needs to. The BBC responded to Murdoch's plans by declaring it won't charge for content. It doesn't need to. U.K. taxpayers already fund it.

Different strokes for different folks. And different business models, too.

Google makes money by making it easy to discover others' content. So does Apple's iTunes. Google can afford to give away lots of free software (and even free hardware) to nudge people into its advertising model.

That's hugely disruptive.

In software, Microsoft doesn't like competing with free Linux. Microsoft spends a lot of money developing Windows. It must seem unfair to have to compete with the rest of the industry, which increasingly coalesces around Linux (or Android, or MySQL, or...).

But that's life in the open-source economy. Your core competence is always going to be someone else's throwaway complement, and ripe for open-source commoditization.

How would you like your software today?

(Credit: Domino's (Screenshot by Matt Asay))

Could Domino's have bought an off-the-shelf system from Oracle, SAP, or another vendor and customized it? Probably. But then, this isn't how most IT gets built, anyway.

Most software is written by enterprises to use, not for sale, as Bruce Perens and others point out. So while we credit Microsoft, Oracle, and others as the backbone of the "software industry," the reality is that these companies are really a drop in the software bucket, with companies like Sony, Wal-Mart, and GE the true backbone of a much larger software ecosystem than the vendors comprise.

As open source matures, we're going to see these "software users" develop more software in-house, often building from open-source projects. Gartner calls out intriguing proof of this trend, but it's equally evident in anecdotes like this one, highlighting Virgin America's adoption of open source to reduce costs and improve innovation.

Virgin America is writing few checks to external vendors. That money is paying internal developers instead.

Digitization, then, may not be destroying the software market so much as reshaping it. In this new model, companies like Domino's will need more internal developers as they rely less on outside software vendors.

There will still be a need for companies like SAP, of course, as there are broad industry needs that a company or open-source foundation can satisfy. But for strategic IT projects, we're likely to see more open source plus internal development, and less packaged software purchases.