The Open Road

While the open-source crowd gets (rightly) excited by Linux's growing market share, three companies are pulling the rug out from under the feet of traditional operating systems.

Red Hat is winning in Linux while IBM cleans up the Unix market. But those are increasingly yesterday's markets as Microsoft, Google, and VMware create different breeds of operating system, each tuned to the strength of its product portfolio.

The easiest to understand are Google and VMware. Google, with its Linux distribution Chrome OS, is placing secondary emphasis on the operating system and primary emphasis on where it takes you: the Web. Given Google's strength in cloud computing, this makes perfect sense. Google needs an operating system just long enough to move users "off" their personal computers (or mobile phones, for which Google has developed Android) and into its cloud services: Google Apps, Search, Wave, etc.

While Google won't find this strategy to be easy, it has the brand and expertise to bring "desktop" substance to cloud applications.

Similarly, VMware's vSphere attempts to untether computing from "desktops" and on-premises servers. VMware describes vSphere as:

...the industry's first cloud operating system, transforming IT infrastructures into a private cloud--a collection of internal clouds federated on-demand to external clouds--delivering IT infrastructure as a service.

VMware recently acquired open-source Java leader SpringSource to complement this strategy, giving developers an easy way to build, deploy, and manage Java-based applications for vSphere (and beyond). With Java applications already running at full steam in vSphere, this move should serve to heighten the value of vSphere.

And then there's Microsoft. The company prints billions of dollars worth of profits each quarter from its Windows franchise, yet for years it has been quietly developing its next big operating system. And no, I'm not referring to Windows 7.

With Windows under fire from VMware in virtualization (though Gartner thinks Microsoft stands to gain on VMware) and from Google in Web-based applications, Microsoft has created a bridge "between personal productivity and line-of-business applications," one that stitches together Microsoft's "desktop" dominance with its cloud ambitions.

It's called SharePoint, and with over 100 million seats and $1 billion in revenue, the odds are that your company already has it installed.

Microsoft CEO Steve Ballmer long ago declared that "SharePoint is the definitive operating system or platform for the middle tier," and I don't think he's using the term "operating system" lightly.

Increasingly, SharePoint is the center of the Microsoft universe, at least, for enterprise computing. SharePoint serves as the hub for Microsoft's suite of operating systems, applications, and third-party software. It is a content application server, of sorts, one that provides the platform upon which so much of Microsoft's value is now being built.

I've disparaged SharePoint in the past for its tendency to lock customers into its proprietary repository. But let's be clear: a large number of companies seem perfectly happy to make that trade-off and are actively using SharePoint at the heart of their intranets, extranets, and Web sites.

Between Microsoft SharePoint, Google Chrome OS, and VMware vSphere, we're in for real innovation in what "operating system" means. While this shift will take awhile, leaving traditional vendors plenty of time to make money in traditional operating systems--hey, companies are still making money in green-screen software--the future of the operating system is almost certain to look different from vanilla Windows, Linux, or Unix.

Disclosure: My company, Alfresco, offers an open-source content application server that has been positioned in the past as directly competitive with SharePoint.

Follow me on Twitter @mjasay.

I've been writing a lot lately about SpringSource, largely because it has demonstrated a big vision (nothing less than the redefinition of the application server and an end-to-end application story), and so I wasn't terribly surprised today to see VMware buy SpringSource for $420 million. On roughly $20 million in sales, much of that services, it's a rich valuation, but one that is absolutely deserved given SpringSource's potential.

In fact, it's almost certain that SpringSource sold too early, at least as measured the size of potential exits it could have had given a bit more time. Like Zimbra before it, SpringSource had unbounded potential to shake up the application server and development market.

I remember talking to Peter Fenton, partner with Benchmark Capital and an investor in both SpringSource and Zimbra. He indicated that the firm had made tremendous efforts to keep Zimbra from selling to Yahoo as it still had so much potential to build toward an even bigger valuation.

Happy as Fenton is with the SpringSource acquisition, I wonder if he feels the same as he did about Zimbra. So much money left on the table.

Indeed, I found out about the SpringSource acquisition back in July, apparently even before formal discussions started between the companies (due to a leaky source at VMware). SpringSource CEO Rob Bearden denied the existence of acquisition discussions between the two companies and Rod Johnson, the company's founder and CEO, was on vacation at the time.

But in denying the rumors, Bearden, COO at SpringSource, suggested that given "one more year...(SpringSource) will be bigger than MySQL," acquired by Sun for $1 billion.

I think Bearden was right. The company's valuation has been soaring due to efficiently run operations (Bearden) and a big vision for the company's prospects (Johnson and others). It was only a matter of time before it IPO'd or was acquired.

I had hoped, however, that Red Hat would complement its JBoss business with SpringSource, but it's not to be, and this doesn't bode well for Red Hat, on two counts.

First, with every acquisition of a leading open-source company by anyone other than Red Hat, Red Hat becomes more and more isolated. Other companies are integrating open source into their business strategies. Red Hat's differentiation as "the" open source company doesn't have much of a shelf life left.

Second, SpringSource's ubiquitous Spring Framework already threatened Red Hat's booming JBoss business. But add VMware's leading virtualization technology and suddenly Red Hat is under siege by a highly credible and disruptive competitor that could well outflank it.

Johnson describes the offering:

Working together with VMware we plan on creating a single, integrated, build-run-manage solution for the data center, private clouds, and public clouds. A solution that exploits knowledge of the application structure, and collaboration with middleware and management components, to ensure optimal efficiency and resiliency of the supporting virtual environment at deployment time and during runtime. A solution that will deliver a platform as a service (Paas) built around technologies that you already know, which can slash cost and complexity. A solution built around open, portable middleware technologies that can run on traditional Java EE application servers in a conventional data center and on Amazon EC2 and other elastic compute environments as well as on the VMware platform.

Here's what it looks like:

The SpringSource + VMware vision

(Credit: SpringSource)

Astute observers will notice that the operating system, Red Hat's core competence, becomes increasingly less relevant in this world. Vendors like Oracle, Microsoft, IBM, and others have less to fear from this threat, because they're already building high-value solutions above the operating system.

Red Hat doesn't. Red Hat is exposed by this VMware and SpringSource combination. It needs to become more aggressive.

Red Hat is, of course, taking a leadership role in virtualization and increasingly cloud computing. But it will need to quickly move beyond its dependence on its operating system business to sell a larger, strategic story or it faces the prospect of being an excellent, limited basic infrastructure vendor.

Follow me on Twitter @mjasay.

Old dogs may struggle with new tricks, but they seem to be able to figure out new licenses.

In a shocking move, Microsoft announced Monday the release of Hyper-V Linux Integration Components (LinuxIC).

The news reflects Microsoft's continued interest in lobotomizing its virtualization competition through low prices, but also the recognition that it must open up if it wants to fend off insurgent virtualization strategies from Red Hat, Novell, and others in the open-source camp.

But the truly startling news is that LinuxIC is being released under the GNU General Public License (version 2). Microsoft once called GPL anti-American. Now it calls it friend.

The gods must be crazy.

Or maybe Microsoft is simply recognizing (finally!) that GPL can be a capitalist's close ally. That and the fact that many components within the Linux kernel are GPLv2-licensed make the move completely natural...at least, once you forget that this is Microsoft embracing GPL, rather than some other company like Red Hat.

LinuxIC is a collection of kernel drivers that enable Linux to recognize that it is running on Microsoft's Hyper-V and optimize accordingly, resulting in an "enlightened version of Linux," according to market researcher IDC. The device drivers have yet to be accepted into the Linux kernel, but the GPL license and general utility makes their inclusion probable.

The move opens up Hyper-V to much more than Windows, which has arguably been its weakest point. As IDC notes, this embrace of Linux is a "key element if Microsoft is going to successfully go head to head with VMware in large accounts--many of which already are dedicated VMware customers."

Importantly, Microsoft is now opening up even beyond its long-time Linux partner, Novell, to embrace an array of other Linux partners, including Red Hat. While Novell was the first Linux vendor to certify for Hyper-V, Microsoft's lack of real support beyond Novell's Suse Linux Enterprise Server was a weakness, as some have complained.

But this is arguably a new Microsoft. Redmond recently announced that Office 2010 will support Internet Explorer and Mozilla's Firefox. The company is learning that its customers run heterogeneous software environments, and it's (slowly) responding. Microsoft's Sam Ramji, senior director of Platform Strategy, notes: "We are seeing Microsoft communities and open source communities grow together, which is ultimately of benefit to our customers."

Microsoft, in short, can't ignore open source, including Linux, without ignoring its own customers.

But surely this move is more Machiavelli than Santa Claus? Maybe, maybe not. I asked Novell's Greg Kroah-Hartman, a prominent Linux kernel developer who was deeply involved in influencing Microsoft to release LinuxIC, what Microsoft's move means for Linux. His response reflects an enthusiasm that is as surprising as it is refreshing:

We want Linux to work well for everybody. This move is not bad in any way for Linux, Xen (Novell's preferred virtualization technology), or KVM (Red Hat's preferred virtualization technology). This is not a competition, per se.

With LinuxIC, Microsoft is doing two things. First, it's saying that contributing open-source software under GPL is acceptable. And second, it's supporting the idea, which I and others in the Linux kernel community have long advanced, that all Linux kernel drivers should be open source.

LinuxIC is the latest example of how Microsoft is changing, and it's a big proof point. When Microsoft embraces Linux, that's news. When it does so by embracing GPL, it's perhaps time to start the countdown to Armageddon.

Follow me on Twitter @mjasay.

Could VMware be the next Novell? That's the question Gartner managing vice president and chief of research for Infrastructure David Cappuccio asks in a provocative post, one that bears further discussion. While VMware is at the top of its game, there are several historical analogs between VMware and Novell.

I'll let you read Cappuccio's excellent post for his full argument, but the crux of it is that in the face of dominant but pricey technology, many buyers will turn to "good enough" to fill their needs. For Novell, that competition to its 90 percent market share came from Windows, which displaced Novell's "great technology that was more complex (or complete) than most customers needed."

Today, VMware faces a host of rising threats. Cappuccio picks out Microsoft's Hyper-V as chief among them:

[L]urking in the background is this little thing called Hyper-V; not as robust, or as tested as VMware, with almost no install base, and certainly not ready for prime time in most people's minds. However, it will be an integral part of Windows 7, Windows Server 2008 and Windows Server 7 in 2010. Why should you (or VMware) care? Because like "free networking", or "free SharePoint", hyper-V will get used, slowly at first, but as more and more systems get installed the base will increase and within just a few short years companies will discover (surprise, surprise!) that they have business applications running on both VMware and Hyper-V.

Free-and-good-enough is a great strategy, and one that Microsoft has long used to exceptional effect.

Of course, Microsoft isn't the only one playing this game. Xen is included for free in Linux, though Red Hat is pushing to move users to KVM (and succeeding to an increasing extent). Virtualization customers are spoiled for choice.

All of which leaves VMware exposed. This isn't to suggest that VMware should resign itself to obliteration. Indeed, VMware has gone on the offensive, releasing a host of software as open source to combat open-source alternatives, most intriguingly its open-source virtualization client, as OStatic's Sam Dean notes.

Novell didn't respond to its Netware demise until it was too late. VMware seems to be learning from history.

The real question is whether it will be able to go as low as Microsoft and the Linux vendors on price while still maintaining "good enough" profits. I suspect it will fail in this because for VMware, virtualization is core and it must price accordingly. For Microsoft, Red Hat, and Novell, virtualization is a critical complement, but not the core of their businesses. Complements are cheap, core is not.

Follow me on Twitter @mjasay.

VMware may still hold 78 percent of the virtualization market when measured by revenue, as reported by ComputerWorld. But Microsoft has learned a thing or two from open source and now claims a whopping 23 percent of the market based on shipments of new licenses, with VMware down to 44 percent of new licenses.

With just a few months in the market with its Hyper-V product, Microsoft's market share progress signals discontent with VMware's pricing and suggests that Microsoft may not be the only one capable of feeding at the virtualization trough.

Red Hat and Novell: time to kick your virtualization efforts into overdrive. VMware's customers await you.

Microsoft's progress has been made under the banner of low cost and choice. As noted by Microsoft, "Customers now have choice in market. VMware is no longer the dominant server virtualization vendor." It's a line stolen from the open-source script, and one that Red Hat and Novell would do well to use.

Red Hat and Novell aren't even in the top-three vendors for virtualization shipments, as IDC data indicates. Still, Red Hat has been charging hard into virtualization with its Qumranet acquisition, and both Red Hat and Novell have something that even Microsoft can't match: a free entry price for using their virtualization offerings.

The one sure thing in all this virtualization fracas is that it's a bad time to be offering virtualization as a standalone. The operating system vendors are going to win this battle because they can bury the cost of virtualization in larger offerings.

VMware came into the stock market with a bang last year, but it may go out with a whimper.

VMware, perhaps recognizing its exposure from open-source virtualization solutions, is looking for an open-source expert to help with a range of things, including help to create "a test framework for a custom Linux distribution." VMware is seeking a "Senior Software Reliability Engineer," as noted on an open-source group on LinkedIn, but perhaps it should be looking for an open-source savvy IP attorney?

Why? Well, VMware is on the hot seat about a possible violation of the GPL related to its use of Linux, and given its public disclosures of the significant amount of open source it uses in its products.

Regardless, it seems fair to suggest that VMware has got the open-source bug now, and is starting to get smarter about how it works with open source. Maybe you can help? You can send a message to Ernie Salle to get started. His email is in the graphic below.

(Credit: VMware via LinkedIn)

VMware has been publicly chastised for allegedly violating the GPL in its proprietary vmkernel technology. Now, in VMware's most recent quarterly report, the company calls out widespread use of open-source software in its products.

It is customary for public companies to overstate risks to their businesses in an effort to forestall shareholder lawsuits. Better safe than sorry, seems to be the thinking.

Even so, I find it fascinating to see the extent of VMware's admission to using open-source software in its products, especially in light of the criticism noted above. Here is the relevant section of VMware's 10-Q in its (near-) entirety:

Our use of "open source" software could negatively affect our ability to sell our products and subject us to possible litigation.

A significant portion of the products or technologies acquired, licensed or developed by us may incorporate so-called "open source" software, and we may incorporate open source software into other products in the future....We monitor our use of open source software in an effort to avoid subjecting our products to conditions we do not intend.

Although we believe that we have complied with our obligations under the various applicable licenses for open source software that we use such that we have not triggered any such conditions, there is little or no legal precedent governing the interpretation of many of the terms of certain of these licenses, and therefore the potential impact of these terms on our business is somewhat unknown and may result in unanticipated obligations regarding our products and technologies.

... Read more

As reported by NetworkWorld, VMware CEO Paul Maritz suggested at VMworld that VMware has "thought about whether we want to open source ESX," the company's leading hypervisor, but provided no substance as to whether or not the company were inclined in that direction.

Instead, the former Microsoft executive paid lip service to open source's model for encouraging third-party participation in development.

That's OK, as his attention is not focused on the license and development model for ESX, but rather on what his customers should expect from the next generation of virtualization. Though Maritz was cagey about a forthcoming VMware technology as an "operating system" (OS), it seems clear that this is, in fact, what VMware is building, as ITworld describes. In response to a direct question as to VMware's plans to build an OS, Maritz equivocated:

Once upon a time a cottage industry of platform-as-a-service (PaaS) vendors emerged to proclaim the next generation of application development. Bungee Labs (which I advise), Coghead, 3tera, and a range of others each stepped up to provide cloud-based platforms for developing cloud-based applications.

This week, however, each of these independent efforts was put on notice by industry heavyweights VMware, Citrix, and Virtual Iron: We're joining the fray.

James Urquhart calls out the significance of of their entries into the cloud platform market:

The long and the short of it is that we have entered into a new era, in which data centers will no longer simply be collections of servers, but will actually be computing units in and of themselves--often made up of similar computing units (e.g. containers) in a sort of fractal arrangement. Virtualization is key to make this happen (though server virtualization itself is not technically absolutely necessary). So are powerful management tools, policy and workflow automation, data and compute load portability, and utility-type monitoring and metering systems.

Indeed. No one is yet making any real money as a cloud infrastructure provider, but already the market is heating up to a boiling point. The entry of VMware and Citrix, in particular, may toll the bell for the independents, or perhaps it will encourage a round of consolidation.

Either way, the nascent cloud-computing industry just became a lot more interesting.