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.
There's a lot of buzz today on the Obama Administration's decision to run WhiteHouse.gov on Drupal, the popular open-source Web publishing system. Given the U.S. federal government's widespread adoption of open source, however, the amazing thing is that it took so long.
It is now, anyway. This is a big shift in the federal attitude toward open source.
Back in 2004, I worked in the Linux Business Office at Novell and met with the CIO for the U.S. Senate. He knew about open source and admitted that other departments were dipping their toes in it, but the Senate was a decidedly Microsoft shop and had no plans to change.
While I don't have an update on the U.S. Senate's adoption of open source, the rest of the government seems to have gone far beyond "toe dipping." Open-source adoption throughout the U.S. federal government is rampant, and started long before President Obama took office.
NASA's Nebula platform is just one example of how the government is actively using open-source technologies (like Apache SOLR, RabbitMQ, MySQL, and Eucalyptus), but also contributing back.
Unlike other geographies, which have relied on government mandates and preferences to accelerate open-source uptake, the U.S. government hasn't been the driving force in open-source adoption, or even the primary force. U.S. public and private sectors have been equally enthusiastic about open source.
For example, it's nice that WhiteHouse.gov runs Drupal, but adoption in the private sector by FedEx, Sony Music, and many others precedes President Obama's choice of Drupal.
The open-source train has left the building. Even companies like Qualcomm, the patent powerhouse that has traditionally disdained open source, are making open source a core business strategy. Qualcomm is setting up a subsidiary to focus on mobile open-source platforms.
Yes, pigs can fly.
What's driving this adoption? It's not necessarily open source's price tag. After all, in the short term, open source isn't necessarily less expensive, once you factor in migration costs, retraining, etc. (Note: you'd hit these same costs even if you moved to a different proprietary system.)
Of course, proprietary software is no bargain-basement cost saver, either. Even Windows 7, that no-brainer IT decision in the wake of Vista's pain, could cost enterprises as much as $1,930 per instance, according to Gartner.
No, in my experience, open source is winning converts because it gives CIOs more control of their destiny.
In part such control stems from the nature of competition itself. As open source proves itself a viable contender for CIO dollars and thereby spark price competition, CIOs save, as Novell CMO John Dragoon notes.
But open source's superior value proposition goes deeper. Open source calls into question the highly profitable maintenance fees that Oracle, SAP, and traditional software vendors use to juice their earnings, but which do little to help customers.
In fact, the traditional software economy can be downright hostile to buyers, as Ingres CEO Roger Burkhardt opines.
Open source is different. Because the code is open, open-source vendors are forced to deliver a constant stream of value to justify subscription renewals. ZDNet's Dana Blankenhorn captures this well:
When you can see the code you have a different relationship with it. You're no longer asking what it can do. You're asking how you can adapt it to your needs.
With code visibility, you and your vendors become partners in trying to make something work. The vendor can't over-promise, but you can't over-assume either. This may be one of main hidden reasons for IT failure, the two sides of the transaction not being on the same page.
It's not surprising, therefore, that Red Hat continues to be the CIO's darling for lowering costs and delivering value. It's also not surprising that the Obama Administration adopted Drupal for WhiteHouse.gov.
No, what is surprising is that it took so long.
President Obama gets a lot of credit for his pro-open source policies, but the United States has been funding open source well before he took office.
The U.S. Agency for International Development (USAID), which describes itself as the principal federal agency for extending "assistance to countries recovering from disaster, trying to escape poverty, and engaging in democratic reforms," has been in the habit of funding open source abroad since at least 2007.
As but one example, USAID kicked off its Open Source Development 2.0 challenge last fall.
The contest and other USAID activities led to a wide roll-out of Joomla, an open-source content management system, throughout the Mongolian government, including 200 of its Web sites, as Elin Waring, president of Open Source Matters, a company that advocates Joomla adoption, told me.
But Joomla is just one part of USAID's global investment in open source. The agency has also created the Global Development Commons, which promotes U.S. interests by encouraging open development abroad. Apparently, the idea is that U.S. interests are served as local economies sustain and grow on their own, rather than requiring ongoing foreign investment.
Microsoft recently funded an IDC study, which finds that "software is a significant contributor that drives productivity and innovation in almost every sector of the economy." This may be true, but as I've argued before, governments would do better to expand local economies by building upon open-source software rather than shipping rubles/pesos/etc. abroad to import software from vendors like SAP, Oracle, and Microsoft.
In the case of open source, the software may come from elsewhere but it quickly becomes a domestic good as local firms tailor and improve it. With proprietary software, local firms can provide implementation services but they, as well as the end-customers, are always dependent on a foreign vendor for the core value.
The U.S. continues to buy plenty of proprietary software, but it's encouraging that when it comes to international development, the federal government recognizes that open source pays better long-term dividends than subsidies for the export of proprietary software. Even more encouraging, this practice appears to be neither Democratic nor Republican in origin.
Perhaps there's hope for bridging America's partisan divide, after all.
The federal economic stimulus package provides $19 billion to upgrade the U.S. health care system to digital records. It's a nice gesture, but the U.S. federal government has already developed a robust medical ERP system that could significantly improve U.S. health care. It's called VistA. It's open source.
It's already paid for.
VistA was developed by the U.S. Veterans Administration and the medical professionals involved in its extensive hospital network. Read: doctors developing software for other doctors.
This bottom-up development effort appears to be working: the VA hospital system consistently delivers superior care at less cost, as noted by ZDNet. As a volunteer at my local VA hospital, I get to see it firsthand.
Better quality health care at a much lower price. What's the punchline?
At first glance, there is none. VistA works, and works well, particularly when packaged and delivered by companies like Medsphere, perhaps the most prominent advocate for the open-source health care ERP system.
Scratch the surface, however, and you quickly run into a major problem with VistA: MUMPS (Massachusetts General Hospital Utility Multi-Programming System). MUMPS is the archaic programming language in which VistA was written, and which perpetuates its inflexible architecture.
Though some suggest the specialized knowledge needed to program in MUMPS is a selling point, let's put it this way: in the programming universe filled with PHP, Java, .Net, and other constellations of programmers, MUMPS is like a single Red Dwarf. It's not going anywhere except into oblivion.
There are other open-source answers to the U.S. health care problem, including the federal Connect project and Axial Exchange, which was set up by former Red Hat executives to commercialize these federal efforts. But none is more proven than VistA, which has successfully served U.S. veterans for many years.
One company, Software Revolution, claims that the MUMPS-based VistA code could be converted to Java at a cost of $125 million. If even remotely true, that could well prove to be a much smarter investment than $20 billion in stimulus money. Heck, given how easily billions are being spent in Washington today, $125 million is pocket change.
Open source might prove to be the wrong answer to the health care mess. But given the VA's success with VistA, President Obama should be spending pennies on the stimulus dollar with VistA before he looks elsewhere for solutions. It's already written. By all accounts, it works well.
It just needs to shake the MUMPS out.
Follow me on Twitter @mjasay.
Open source is picking up steam in enterprise computing, even as the economy peters out. If West Virginia Sen. Jay Rockefeller has his way, open source will soon make its mark on medicine, too, with the lower cost of open source a key impetus behind the move.
Rockefeller last week introduced Senate Bill 90, the "Health Information Technology Public Utility Act of 2009," which "would create a Public Utility Board under (National Coordinator for Health Information Technology) David Blumenthal to push a model of open-source health software, offer grants to hospitals which adopt the model, ensure interoperability with other systems, and create quality measures for the software," as ZDNet's Dana Blankenhorn reports.
This is just the latest demonstration of open source's growing strength in the health care market, some of which is sponsored by President Barack Obama's economic stimulus plan, as Red Hat points out.
With $20 billion in stimulus funds earmarked to induce hospitals to adopt electronic records, one open-source start-up stands to benefit in a big way: Medsphere, the company that has commercialized VistA, the U.S. Department of Affairs' health care management system created with billions of dollars in taxpayer funds.
Medsphere is selling an upgraded version of VistA for comparative pennies on the dollar. Given that a comparable proprietary system routinely runs $20 million to $100 million, according to data assembled by The Wall Street Journal, Medsphere could completely upend the proprietary health care management market.
Proprietary vendors like McKesson and Cerner hold out the same tired arguments that used to be trotted out to combat Linux, MySQL, and other open-source technology: open source is really not cheaper, the software isn't as feature-rich as theirs, etc.
Given how much success such arguments did (not) have against other open-source projects, here's some advice for Cerner and the others determined to cling to their monopoly rents: it won't work. Open source, open standards, and open data is the new starting point for the software conversation.
Medsphere Chairman Kenneth Kizer says Medsphere's OpenVistA "can be installed in one third the time and for about one third the cost of the big-name proprietary systems." Particularly now, that's a story that is going to resonate.
Open source has updated its marketing message. Time for the proprietary health care vendors to do the same.
Follow me on Twitter @mjasay.
Barack Obama has promised change. In his first day in office, however, he discovered that change is easier said than done.
Take his team's operating-system preference. Obama's team was dismayed to discover that the White House runs Windows, not Macs, according to The Washington Post. I'm a Mac fan, but I'm somewhat surprised by the naivete of this response:
The team members, accustomed to working on Macintoshes, found computers outfitted with 6-year-old versions of Microsoft software. Laptops were scarce, assigned to only a few people in the West Wing...Senior advisers chafed at the new arrangements, which severely limit mobility--partly by tradition but also for security reasons and to ensure that all official work is preserved under the Presidential Records Act.
I'm sure that this will be the first of many roadblocks (which, incidentally, the Bush White House also endured--it's the nature of the beast). Guess what? That's life...and government. There are very good reasons for the locked-down environment that Obama's personnel are chafing over.
Click image for CNET News' Mac
anniversary special coverage.
So, while we may cheer President Obama's interest in open source, the reality is that he is too smart to try to disrupt the U.S. software economy with grand orders around open source. Any executive decisions around open source need to be heavily couched in caution: it's not the U.S. federal government's place to try to legislate fundamental software policy changes, changes which are happening just fine without government intervention.
Fortunately for his fans, President Obama isn't stupid, and not simply in the matter of technology policy. He's not rewriting foreign policy, either. In fact, his cabinet reflects more continuity with President Bush's policies than change. He'll tweak what he doesn't like and maintain that which he does (and apparently, despite campaign rhetoric, he seems to like more than he dislikes which, again, is consistent with the Clinton-Bush transition and, indeed, all presidential transitions).
For those who have looked upon President Obama as their savior and agent of change, well, just be prepared for more continuity than disruption. That's a good thing. It reflects Obama's intelligence: when things aren't broken, don't fix them, or fix them incrementally. That's not to say that things couldn't improve through change - they can.
It's just that President Obama's change is going to be much more gradual and incremental than his acolytes would like. Be patient. The Macs will come, as will open source. Just not overnight.
President Barack Obama is a smart guy. Where others zig, he zags. It's perhaps not surprising, then, that he's been asking around about the benefits of open source, according to Sun Chairman Scott McNealy, who has been asked by President Obama to author a white paper on the benefits the U.S. government can derive from open source.
McNealy, cited in a BBC News story, wasn't shy in identifying them:
It's intuitively obvious open source is more cost effective and productive than proprietary software....The government ought to mandate open-source products based on open-source reference implementations to improve security, get higher-quality software, lower costs, higher reliability--all the benefits that come with open software.
While I agree with those benefits, I'm not a supporter of mandates. I wouldn't want the government mandating Microsoft software--why would I therefore seek an open-source mandate? Open source has done remarkably well in the U.S. federal government without mandates, and will continue to do so because of the benefits identified by McNealy.
Will President Obama listen? I suspect he's more likely to do so. He'll get plenty of lobbyist cash from technology companies like Microsoft, but with few companies now solely dependent on proprietary software (indeed, I'd argue that there aren't any left), open source is going to be on everyone's agenda.
For other positions on McNealy's open-source suggestions, see The 451 Group's Matt Aslett's blog and OStatic.
Bloomberg reports that a select few technology companies could stand to benefit from President Barack Obama's plans to boost investment in U.S. infrastructure:
[Obama's] initiative, which may rival the 1956 effort to create an interstate highway system, will also involve spending billions of dollars on schools, health care, broadband expansion, the electrical grid and the Internet.
The technology companies identified in the report include open-source companies like Red Hat and Sun, but also IBM, Cisco, Dell, EMC, Juniper, Google, and Microsoft. Normally I'm glad to see open-source companies do well, but I'm a wee bit reluctant to celebrate the government indebting itself to the tune of trillions of dollars so that I and my children can pay it back. It's hard to cheer any investment in open source that takes the national deficit to 8.3 percent of our gross domestic product.
I like open source. I don't like it that much.
Barack Obama won the U.S. presidency for one very good reason: he presented himself as a credible leader. McCain offered little in the way of hope that he had the intelligence or risk profile to make real changes to the way this country works. This isn't a slap at conservative principles (as a conservative, I hardly feel inclined to do that). It's a slap at conservative leadership.
That's politics, but what about business? Reading through The Wall Street Journal and the Financial Times today, I almost became physically ill reading non-stop headlines that evidence hand-wringing and resignation: job cuts, various industries begging for Papa Government to bail out their own mismanaged businesses, etc. Pathetic.
The one ray of light in the midst of the gloom-and-doom tripe is Daniel Henninger's article, "America Needs Its Frontier Spirit":
The greatest danger in the current economic crisis is that the United States will lose its historic appetite for risk. The mood now is that risk-taking got us into this mess. Risk, though, is the quintessential American trait that built the nation--from the Battle of Bunker Hill to the rise of the microchip. If we let risk give way to a new ethos of commercial reserve and regulatory restriction, the upward arc of the US ascendancy will flatten. Maybe it already has.
Daniel Boone, the famed American frontiersman, went belly-up speculating on Kentucky land. He moved on in 1788 and paid his debts. So should we, without losing sight of the American frontier,w here we discovered the rewards of risk.
Amen. An emphatic amen.
People are rightly worried about job losses, but there's a very good way to overcome them: create new businesses and new industries to employ people. This isn't something that we should do with government: I'm talking about technology-driven businesses, not the CCC of the 21st Century.
Alan Frazier suggests that that the venture capital model is broken. Yes, IPOs have dried up, but perhaps a the model needs tweaking to fund companies that pay back investments in earnings, not stock-market explosions. Having said that, who says the IPO market is closed forever? If we can create new businesses that create new wealth, why wouldn't the market cheer for these counter-trend crusaders?
Oliver Marks writes over on ZDNet of open-source companies that are thriving in the downturn, but we are not alone. SaaS, Web companies, and others that drive inefficiencies out of old markets will do well, even in a recession (or, perhaps, particularly because of the recession). These are our latter-day frontiersmen and frontierswomen.
Let's not give up. The financial meltdown has one clear message: stop spending debt, and return to profitability in our homes and businesses. It does not tell us anything about the need to regulate away risk. Risk is what justifies reward. In this environment, we need leaders who will boldly push forward into taking intelligent risks.
Will you be one of these leaders? Will I?
For those who missed CNN's coverage of the U.S. presidential election, you missed a real treat. Alex Castellanos, a Republican consultant, discussed President-elect Barack Obama's "bottom-up" approach to leadership, comparing it to the open-source movement (and chiding traditional Washington "top-down" government as akin to the "old way" that Microsoft builds software).
(Obama) said his campaign began with a simple idea: "Change begins from the bottom up." That's not the way the U.S. government works. The seminal essay--this is a little wonk-speak here--in computer software architecture is called The Cathedral and the Bazaar. And the cathedral is the old way of doing things. It's the way Microsoft builds software. We're going to do it our way, worship at our church or you don't get to do it at all.
But the open-source movement in computer engineering is people get together from all over the world and build computer software bottom-up. Is Barack Obama going to be the old top-down industrial-age cathedral leader, or is he going to be the fellow we heard tonight, this new generation of leadership that is very bottom-up for the communications age?
It's an open question as to whether Obama will actually live up to his hype, and Castellanos', but I agree that Obama's groundswell approach to leadership, along with his call for help from the masses to construct the government they desire, is very open source.
