Microsoft is in significant disarray, fettered by its destkop dominance as the world goes mobile. Would this have happened anyway, or is Microsoft CEO Steve Ballmer to blame?
Developers! Developers. Developers? Developers!?!?
Ballmer, after all, knows how to sing to developers, but he doesn't really speak their language. Former Microsoft CEO and co-founder Bill Gates did. Now, more than ever, Microsoft needs to get in front of developers but finds itself playing catch-up.
Gates announced his resignation back in 2006 and formally discarded his full-time Microsoft duties in 2008. But it has been a long time since Gates' hand was full time on the steering wheel.
That's a problem for the world's largest software company. It was Gates who saw the threat (and opportunity) the Internet posed for Microsoft--drafting his excellent "The Internet Tidal Wave" (PDF) memo in 1995--and alerting his troops to an array of threats that saved Microsoft from ruin...while helping it to ruin many others on its path to billions in profits.
Gates oversaw Microsoft's early, largely successful forays onto the Web. Ballmer has shepherded Microsoft to vanishing mobile market share (now just 7.9 percent of the market), a hesitant tiptoe into software as a service, and a general sense of retreat in emerging markets.
Hence, while former Microsoftie Don Dodge talks up his new employer, Google, with its food perks and 401(k), it's really the company's vision that has him jazzed:
Google has made three big bets on the future of computing; Chrome (browser), Google Apps (cloud), and Android (mobile). The trends are pretty clear. All the exciting new applications are running in the browser, with application code in the cloud, and the cell phone as the platform....2010 will be the year that enterprises of all sizes start their transition to Gmail and Google Apps, and take their first steps towards the vision of the future.
Dodge couldn't sell this sort of vision at Microsoft.
Microsoft has been playing catch-up for many years, but at least did so successfully under Gates. With Ballmer, there's a sense that Microsoft is always a half-decade too late on critical initiatives like search, open source, and mobile.
So is the problem Ballmer, or is Microsoft simply doomed, blinded by its own success with personal computers--a blindness that no CEO could overcome?
I hate to ascribe so much importance to any one person, but just as Steve Jobs is the soul of Apple and its revolutionary leader, so, too, was Gates the heart and mind of Microsoft. He understood developers, and they rewarded his belief in them by making Microsoft the world's largest software company.
Microsoft is the poorer for Gates' departure.
Even as I type this, Google keeps moving into the future while gouging Microsoft's past. TechCrunch is reporting that Google is acquiring DocVerse, which enables people to collaborate on Microsoft's Office documents. Microsoft is under siege.
This is just the beginning.
Developers are coding for Google projects, Twitter, and other new-style Web applications. Morgan Stanley is predicting the mobile market will be twice the size of the "desktop" market. Will Google someday dwarf Microsoft in size and influence?
Unless Ballmer can discover his recessive developer gene, the answer my well be yes.
Update at 2:10 AM Pacific on Tuesday: Newsweek predicts the ouster of Ballmer in 2010, but ZDNet's Mary Jo Foley cautions "not so fast."
Follow me on Twitter @mjasay.
It's reasonably clear that open source is the heart of cloud computing, with open-source components adding up to equal cloud services like Amazon Web Services. What's not yet clear is how much the cloud will wear that open source on its sleeve, as it were.
Eucalyptus, an open-source platform that implements "infrastructure as a service" (IaaS) style cloud computing, aims to take open source front and center in the cloud-computing craze. The project, founded by academics at the University of California at Santa Barbara, is now a Benchmark-funded company with an ambitious goal: become the universal cloud platform that everyone from Amazon to Microsoft to Red Hat to VMware ties into.
Or, rather, that customers stitch together their various cloud assets within Eucalyptus.
I caught up with Eucalyptus founder and Chief Technology Officer Rich Wolski to learn more about how Eucalyptus hopes to displace industry leaders like VMware, and the role that open source plays in growing the cloud-computing market.
While Wolski made a big deal about the company's open-source credentials, I found his argument about the open architecture of Eucalyptus more compelling:
... Read more[Eucalyptus] is architected to be compatible with such a wide variety of commonly installed data center technologies, [and hence] provides an easy and low-risk way of building private (i.e. on-premise or internal) clouds...
Thus data center operators choosing Eucalyptus are assured of compatibility with the emerging application development and operational cloud ecosystem while attaining the security and IT investment amortization levels they desire without the "fear" of being locked into a single public cloud platform.
Whether you're an enterprise or a consumer, ultimately your big concern in buying technology is "Will it do what I want it to do?" Sometimes components matter, but most people most of the time just want something that works.
Open source inside, but do you care?
I'm going to assume that at some point over the last 20 years you bought a car. So, how important was the car maker's use of just-in-time manufacturing to your purchase decision? I'm going to go out on a limb here and say it was of no consideration at all.
Well, I think we're fast approaching the point where open source to software will be like JIT to automotive manufacturing. While it will critical to the producers of software, woven into the fabric of its operations, it will be of no importance at the point of consumption.
As hard as this might be to accept, open source is not a value proposition in its own right.
As hinted above, this is mostly true. Customers do care about the things that open source offers (lower cost, higher quality, etc.). But they probably don't recognize (or care) that these benefits stem from open source, per se.
Consider the Web. Open-source software provides the fundamental building blocks for nearly all Web services like Facebook, Amazon, etc., not to mention the infrastructure for public and private clouds.
End customers aren't asking for open source on the Web or in the cloud. They're asking for well-managed services that solve their problems. It's the vendors who care, because it allows them to grow highly scalable businesses at a modest cost.
Indeed, many of the customer benefits of open source (i.e., the ability to view, modify, and redistribute code) disappear or get muted on the Web and in the cloud. This hasn't stopped customers from buying into the Web/cloud.
Red Hat may disagree. It's apparently betting that customers care about components in the cloud. Why else would Red Hat Enterprise Linux pricing be much more expensive than Windows on Amazon EC2, despite being much cheaper for on-premises deployments, as IBM's Savio Rodrigues finds?
But I suspect Red Hat will need to change its pricing, as the OS is even more commoditized in the cloud than it has been for on-premises deployments. Both Red Hat and Microsoft will race to the bottom in pricing, with the emphasis being on the applications that run on them.
After all, this is the thing that drives customers' purchasing decisions. Red Hat knows this, which is why it (rightly) makes a big deal of the huge ecosystem of applications that run on RHEL.
In the cloud, even more attention is focused on service that customers use. Open source, in such a world, is essential infrastructure, but it's infrastructure that every vendor shares or will soon share, making the battle all about end-user facing applications, and not about developer-facing open-source components.
This is a very good thing. It means we can get back to focusing on solving customer problems, rather than fetishing and battling over open-source licenses. It's about time.
The next time you feel tempted to laud the power of the open-source business model, take a look at Novell.
Novell has been struggling for over 10 years, yet it still manages to crank out nearly $1 billion in sales each year, most of which derives from the licensing of proprietary software.
Novell reported its fourth-quarter earnings on Thursday, along with results from its full fiscal year. They're not pretty, but they do suggest a path forward for the erstwhile software leader.
Novell saw its sales slump over 12 percent from its year-ago quarter to $216 million. For the full fiscal year, Novell stumbled to a $257 million net loss, versus a $5 million profit in 2008, on net revenue of $862 million and a net loss from operations of $206 million.
Perhaps not for long.
Much of that annual deficit came in the fourth quarter, which included a $279 million noncash impairment charge that sent Novell's quarter into the red by $259 million.
Not pretty.
Unless you look at Novell's Linux numbers. Linux remains Novell's most appealing business and was up 21 percent year over year to $149 million--and up 14 percent at $39 in in its fourth quarter over the year-ago period. While a far cry from Red Hat's booming Linux business, Novell's results suggest that there's life in its Linux business yet.
Life that Microsoft continues to seem content to grant.
Make no mistake, without Microsoft, Novell's Linux business would struggle, at least in the short term. Microsoft, after all, has been funding Novell's Linux business since 2006, when the two companies entered into an interoperability and Suse Linux subsidy pact.
And without its Linux business, all of the rest of Novell's business would be in jeopardy, as Suse Linux makes Novell's other products a palatable choice. Even so Novell's Identity and Security Management, Systems and Resource Management, and Workgroup businesses all dropped significantly (down 10 percent, 6 percent, and 13 percent, respectively).
Novell's needs
Clearly, Novell needs Linux. Equally clearly, it needs Microsoft to grow that Linux business. Microsoft has already plowed $247.5 million into Suse Linux Enterprise Server (SLES) subscription coupons, and Novell CEO Ron Hovsepian has indicated he's now dipping into the additional $100 million in coupons the companies negotiated.
But how can Novell accelerate its Linux business at a pace that will be comfortable for Microsoft, which has made no secret of its animus to Linux and desire to quash it? Microsoft partners with Novell to show a good interoperability face to its customers who use Linux and to prop up the No. 2 vendor against Red Hat, the dominant Linux vendor.
The day that Novell's Suse Linux business threatens Microsoft, and not merely undermines Red Hat, is the day Microsoft will pull its extensive financial support from Novell's Linux business. That same day Novell's Linux business will crumble, perhaps irreparably.
Unless.
Unless Novell can deliver a coherent strategy centered on Linux rather than merely friendly to Linux. For years Novell has packaged and repackaged a set of mostly stale offerings (e.g., Workgroup), pretending that they were part of a coherent strategy.
They weren't. The company was simply milking maintenance revenues as it sought to find a way forward. (I was in those meetings back in 2002 when the company discussed how to stanch the bleeding from maintenance declines. Those same conversations continue today, I'm sure.)
Then, as now, Novell's various product lines, and particularly Workgroup, offered little synergy, either in sales or engineering (i.e., the buyer of GroupWise is not the same as the buyer of Suse is generally not the same as the buyer of Identity Management).
Ongoing makeover
Novell is now entering a new phase of its repackaging makeover, but this one actually makes some sense. The company is calling it Intelligent Workload Management, arguing that a "new market [exists] for solutions that address the risks and challenges for computing securely across multiple environments."
Not surprisingly, Hovsepian argues that such an Intelligent Workload Management market "plays to the strengths of Novell--identity and security, systems and resource management, and our new Suse Appliance program."
Surprisingly, he may be right.
First of all, its wonderful to see Workgroup dropped from the discussion. Yes, it's Novell's biggest product by revenue, but no, it has almost no relevance for the rest of its business. Sell it off. Move on. The company has already offloaded much of its Workgroup development to India, anyway.
Second, Novell really does have a great deal of expertise in this area, with some assets that could go a long way toward helping it compete with the vendors that compete aggressively in the market: VMware, Microsoft, and increasingly Red Hat.
The key will be for Novell to really put Linux at the heart of its story, rather than simply using it as a conversation starter and loss-leader.
And yet, more is needed. Novell has the burden of a stale brand that it must shed. A few select acquisitions could help it to establish technology and brand leadership in the market. Companies like Reductive Labs (Puppet project for data center infrastructure management), VMOps or Eucalyptus (for building and managing private clouds), and/or Cloudera (for designing and analyzing large-scale data assets) could put Novell in the driver's seat on this market.
For the first time in years, the market seems to have moved in a direction that corresponds with Novell's rich technology assets. If Novell can make Linux the centerpiece of this campaign, bolstered by relevant, innovative technology, it will finally get its Linux business out of Microsoft's shadow and its overall business back on track.
The technology pieces are in place. It's now a question of brand and execution.
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.
A recent survey suggests that CIOs are loosening the purse strings on IT spending. IT vendors may want to hold off their celebrations, though, because much of the spending appears to be headed for deflationary forces like cloud computing, virtualization, and their kissing cousin, open source.
An economic rebound never looked so dire.
That's unless you're an IT buyer, of course, suggests a new report from Goldman Sachs. In this week's report, titled "A Paradigm Shift for IT: The Cloud," Goldman Sachs said it expects that pent-up IT dollars will flow in the short term to building out next-generation data centers (e.g., cloud computing). But in the long term, less money is expected to find its way into fewer wallets:
After the initial build-out, Cloud Computing could drive some headwinds for the IT industry, as a result of two factors. First, we see virtualization as a deflationary technology. Second, we see IT spending consolidating in the hands of fewer buyers--the Cloud providers, hosting vendors, and large enterprises. These factors will likely dampen IT spending growth due to greater utilization and buyer pricing power.
Even short-term build-outs may prove disappointing, however, as Goldman Sachs expects large enterprises to grow existing virtualization and automation technology adoption in the rollout of private clouds, shifting slowly to an embrace of public clouds over time. The chart below gives some idea as to when cloud computing will hit its stride:
Who wins in this scenario?
According to the report, Red Hat stands to benefit from the cloud-computing craze. ("Red Hat is well positioned for the emerging Cloud Computing ecosystem, largely due to its open source background and current ubiquitous deployments in data centers, including enterprises, as well as in Cloud providers such as Amazon," the report states.)
But the real beneficiaries will be...the same old crew. "[K]ey suppliers for internal Clouds are likely to be those that have the most complete portfolio of hardware, software, and services," including IBM, Hewlett-Packard, Cisco Systems, EMC, and Oracle.
New boss...same as the old boss.
The other beneficiaries are the start-ups that provide critical components of cloud computing, with an emphasis on management tools. Here we may see open-source companies benefit, including Reductive Labs (Puppet project), Cloudera, and the two rising private cloud companies, VMOps and Eucalyptus, among others.
While open source doesn't factor heavily into this particular Goldman Sachs analysis, the firm has before called out open source's role in wringing more value out of fewer IT dollars. Open source is a primary driver of the global reset in IT spending expectations.
With less money flowing into the pockets of fewer vendors, we can expect to see both increased consolidation and fierce competition for the IT spending that remains. Those vendors that can help CIOs do more with less stand to benefit from this shift to low-cost, high-value computing.
And those that can't? Well, let's just say they may pine for the good old days of the global recession.
The European Commission must be feeling a bit silly right about now. Despite insisting that Oracle has not responded to its requests for comment and concessions in its planned acquisition of Sun Microsystems (and the open-source database MySQL), Amazon.com recently offered the EC all the proof it needs that MySQL competition remains alive and well.
Competition at pennies an hour.
(Credit: Amazon)For those who missed it, Amazon announced last week a fork of the popular MySQL database, called RDS (Relational Database Service). RDS is essentially a hosted version of MySQL, one that developers can write to at the minuscule cost of pennies per hour.
Oracle hasn't even started with MySQL yet, and it already faces significant competition, not to mention the other MySQL forks (e.g., Drizzle).
As Redmonk analyst Stephen O'Grady writes:
From here, it seems fairly clear that while RDS will not be the best option for every MySQL user, it will find a more than adequate market of customers who are willing to trade money for time, as (former MySQL CEO) Marten Mickos might put it. Assuming that Amazon can realize its typical economies of scale by amortizing the management and administration costs of the service over a wide array of machines, the product should more than pay for itself simply by widening the addressable market.
How much wider will it make the addressable market? At a minimum, it will lower the barriers to entry for customers with relational needs (read: most customers) and a lack of cloud expertise. It will be fascinating to see, however, if Amazon has far grander ambitions in mind.
Interesting, and somewhat unfair to Oracle. Presumably Amazon's entrance into the MySQL market is A-OK because Amazon isn't currently a database company, but it is a significant and growing infrastructure provider. Why should it get to own a complete stack, but Oracle can't?
That, after all, is what Oracle is attempting to accomplish with the Sun/MySQL acquisition. Sun gives it hardware, while MySQL gives it a strong entry into the Web database market and an effective hedge against Microsoft in lower-end enterprise needs.
Oracle's bid for Sun/MySQL, in other words, isn't about squelching competition, but rather about enhancing it. Amazon's RDS proves that strong, viable competitors to MySQL can arise from within the MySQL community, which disproves the EC's argument that Oracle's control of MySQL will somehow crush competition.
And if the deal doesn't hurt competition, as Amazon RDS all-but-proves it doesn't, then the EC's opposition is hollow and should be shelved, as The 451 Group's Matt Aslett argues.
It's time for the EC to acknowledge it was wrong, and move on. Amazon surely has. But until the EC makes a final decision, Oracle (and MySQL) can't.
Ars Technica's Ryan Paul wants to know, "Can a [truly open smartphone] be done?" But the real question is, "Should we care?"
Hello? Can I get some freedom around here?
Hence, Bradley Kuhn of the Software Freedom Law Center expresses anxiety about the future of freedom in mobile...
We are in a very precarious time with regard to the freedom of mobile devices. We currently have no truly Free Software operating system that does the job.
...when he really should be concerned with choice in mobile. Right now, we're spoiled for choice in mobile, what with Apple's iPhone, Google Android, Symbian, LiMo, Moblin, etc., which suggests that users are free to move between devices.
In this case, it's not the license that makes users free. It's the market.
Open-source software plays an important role in ensuring user choice, but it's not the sum total of the freedom/choice equation. It's just one factor. As Tim O'Reilly reminds us, it's not even necessarily the most important factor, either.
Kuhn and other free-software advocates worry that the nuts and bolts making up the software on mobile phones be free, but this is surprising given the increasing irrelevance of single-node freedom when it's tied into a network. This is what I've described as "the Hotel California of tech," and it suggests we should be far more concerned with freedom between nodes than freedom of the nodes themselves.
In other words, the real concern should be over open data, not open phones. No matter how open my phone's software may be, it's meaningless if I can't move my data between devices or wireless providers.
Even here, there's cause for hope. For example, Funambol's open-source mobile cloud synchronization and push e-mail software is in use by 10 of the leading mobile service providers, as identified in a new report, which arguably should be more relevant to the Freedom fighters than whether Bluetooth is open source.
Glyn Moody, a journalist with strong free-software leanings, understands this. That's why he makes the case for an open cloud, and not simply "open node in the cloud":
Ideally, what we need is a completely open source cloud computing infrastructure on which applications providing people with things like (doubly) free email and word processing services could be offered....The trick here is not to fight the battle on the opponents' terms, but to come up with something completely different.
For example, how about creating an open source, *distributed* cloud? By downloading and running some free code on your computer, you could contribute processing power and disc space that collectively creates a global, distributed cloud computing system. You would benefit by being able to use services that run on it, and at the same time you would help to sustain the entire open source cloud ecosystem in a scalable fashion.
One can quibble with the feasibility of this approach, but at least Moody is thinking at the right scale. Those who are still stuck in the Open Source 1.0 of isolated, client-side software are not.
I suppose someone has to fixate on upper-case Freedom above all other priorities. Like usability. Or ubiquity. Or...well, anything.
But most of us don't think this way, because the world is a lot more complicated than Freedom on one hand, and Slavery on the other. Also, the focus of freedom has evolved in our networked world, though some free-software advocates seem mired in Freedom 1.0.
It's time to upgrade. Freedom is more than a license. It derives from a competitive market, one that is assisted by open source but not exclusively or even primarily defined by it.
Google was born on the Web and is increasingly giving Microsoft fits by forcing the decades-old software giant to compete on Google's terms. Like open source. Like cloud computing.
Microsoft may shore up its fortunes in the short term with a successful Windows 7 launch. But in the long term, its very success with outdated "desktop" products threaten to cede the market to Google.
We'll have all of it, please
It's not really fair to Microsoft. Microsoft is a victim of its own success, needing to cater to its existing clientele with each new release, in true "Innovator's Dilemma" fashion. Hence, Microsoft continues to make a lot of money, but its last two quarters have seen traditional strengths like Windows become a drag on earnings as enterprises spend more money with Google, Red Hat, and others.
Google's lack of legacy frees it to innovate rapidly and broadly, as Genentench CIO Todd Pierce, a Google Apps customer, suggests:
The rate of innovation at Google is - well I mean, the Oracle, SAP and Microsoft product cycle is five years; Google's product cycle is five days. It's incremental. In five days you're not going to be able to cancel your Microsoft Office license, but in five years, you won't have Microsoft Office.
Microsoft, for its part, is so concerned with "backward compatibility"--"Is this product/feature compatible with our ability to continue to monetize our 1980s-style desktop monopoly?"--that it continues to struggle to embrace the Web. CNET blogger Dave Rosenberg points out that Windows 7 should have been Microsoft's launchpad to cloud computing, but isn't.
There are a lot of "should have beens" for Microsoft when it comes to the Web.
Meanwhile, no one is slowing down for Microsoft. Let's stick with cloud computing for a minute. VMware dominates virtualization and has a strong claim on cloud computing, though open-source rivalry from Eucalyptus and VMops threatens to challenge both VMware and Microsoft as they seek to dominate cloud computing.
And then there's Google, which provides an increasingly wide array of cloud-based services to enterprises looking to untether themselves from the desktop. In an interview with CNET News, Google CEO Eric Schmidt argues that "The browser can be both enterprise- and consumer-capable. The architecture is driven from the browser. That is the story of enterprise IT today."
In other words, the desktop is simply the means by which a user loads a browser. It's a gateway. The value is not in the desktop anymore. It's in the browser, which is the new desktop, in terms of real functionality delivered.
Microsoft's big opportunity to stymie the threat from Google and others is SharePoint. Microsoft CEO Steve Ballmer has described it as Microsoft's new operating system, but it's in a recent interview with Forrester that he makes this meaningful:
In my own mind I compare (SharePoint) to the PC, the PC started off life as a spreadsheet machine, then became a programming machine, a word processing machine, (SharePoint is) a general purpose infrastructure that connects people to people and people to information....
I think SharePoint is considered a very serious development platform for rapid application development (by IT architects and developers).
SharePoint is Microsoft's best attempt to connect desktop applications like Office with centralized, cloud/cloud-like collaboration and storage. Yes, Microsoft has other initiatives like online Office, but none marries so well its legacy profit centers with future innovation. And, given that SharePoint is already a $1 billion and frenetically growing business, it has momentum that other initiatives don't.
SharePoint, then, may be Microsoft's best hope for marrying its legacy to the future of Web-based computing.
Microsoft needs something like this. It is losing in mobile, and not simply to Apple. Google's Android momentum is almost astounding, with AdMob data pegging Android smartphone penetration in the U.K. at 10 percent, as but one example.
If we assume that mobile will increasingly be the client platform of choice, then we see Google squeezing Microsoft from the top (cloud) and the bottom (client).
In both areas, open source is Google's weapon of choice, and it's one that Microsoft is going to have to figure out quickly if it wants to be a player on the Web. The Web is too big for Microsoft to control it, and the Web is overwhelmingly open source, as Lotus founder Mitch Kapor states:
The accomplishment of open source is that it is the back end of the Web, the invisible part, the part that you don't see as a user.
All of the servers, pretty much, they run Linux as the operating system; they run Apache as the basic Web server on top of which everything else is built. The main languages out of which Web applications are built - whether it's Perl or Python or PHP or any of the other languages - those are all open source languages. So the infrastructure of the Web is open source ... the Web as we know it is completely dependent on open source.
Kapor further suggests that Microsoft's war with open source is over, or should be over: open source has won. It's essential infrastructure now, and hence something that Microsoft needs to embrace, not fight. This isn't about open-source religion. It's about pragmatism. Pragmatism that Microsoft, like anyone else, can embrace.
Google is using the future (open source, cloud) to compete for the future, and its tactics threaten to hit Microsoft in its profit centers like Windows.
Microsoft, however, appears to be mired in its past. Windows 7 looks to be a serious upgrade over its Vista predecessor, but in 10 years time, will we care? Or will we have moved on, forgetting about those quaint days when we used to care about the operating system and applications like Office?
Follow me on Twitter @mjasay.
In the cloud, no one cares about your software license. That is one of the most liberating--and frustrating--things about cloud computing.
Depending on your perspective, it either opens up computing or closes it off. Customers don't seem to care one way or another, happily shoveling data into cloud services like Google, Facebook, and others without (yet) wondering what will happen when they want to leave.
Cloud computing may just be the Hotel California of technology.
Google Trader
(Credit: Google)I say this because even for companies, like Google, that articulate open-data policies, the cloud is still largely a one-way road into Web services, with closed data networks making it difficult to impossible to move data into competing services. Ever tried getting your Facebook data into, say, MySpace? Good luck with that. Social networks aren't very social with one other, as recently noted on the Autonomo.us mailing list.
For the freedom-inclined among us, this is cause for concern. For the capitalists, it's just like Software 1.0 all over again, with fat profits waiting to be had.
The great irony, of course, is that it's all built with open source.
In this cloud computing/Web 2.0 world, infrastructure needs to be cheap, flexible, and plentiful. Open source delivers all three.
Hence, we've seen companies like MySpace tripping all over themselves to open up parts of their platforms in order to make themselves more appealing to developers. As ReadWriteWeb wrote of Facebook back in 2007, however, such developer outreach has not opened up these Web platforms in the sense of providing useful off-ramps to services like Twitter, Digg, Facebook, etc. It has simply created more on-ramps.
Cue the nefarious Microsoft theme song.
Rather than wringing our hands over this, I think there's an opportunity to create amazing amounts of good (and wealth) in this open/closed Web. Frankly, the longer we're in this, the less it's going to matter whether the code is open or closed because, as Tim O'Reilly has been saying for years, data is the heart of the Web, and even open data isn't going to hurt a successful vendor's network effects.
Take Google Trader, an interesting new SMS application that helps people buy and sell goods through text messaging. As The Economist notes, however, one of Google Trader's most interesting applications is in helping to foster free markets in emerging economies:
Lastly there is Google Trader, a text-based system that matches buyers and sellers of agricultural produce and commodities. Sellers send a message to say where they are and what they have to offer, which will be available to potential buyers within 30km for seven days. Mr Makawa says his father used the service to look for a buyer for some pigs, which he sold to pay school fees. These services cost 110 shillings ($0.05) a time, the same as a standard text message, except for Google Trader, which costs double that. In their first five weeks the services received a total of more than 1m queries.
I'm not familiar with the economics of SMS, but I'm guessing that Google gets a cut of the messages its application generates. The more useful Google Trader becomes, the more SMS it generates, the more commissions Google collects.
For the entrepreneurs using Google's service, they could possibly care less whether Google Trader is open source, but Google might. Open the source (and the API to the service), and let a thousand add-on development projects bloom. The more useful and feature-rich the Trader application, the more SMS, the more...you get the picture.
Take me to Google, Earthling.
The key is to create an open Web platform, one into which a diverse array of mobile software services can tie. This is one reason Google is such an advocate for open source. Android and other projects bring more people to the Web, a Web that Google monetizes through proprietary services like AdWords.
The community is critical to building upon the platform, but the money is in control of the platform and provisioning of services therefrom.
Just ask Amazon.com. According to ZDNet, Amazon's Elastic Compute Cloud (EC2) service makes roughly $220 million per year. That's a lot of cash, and is a function of EC2 sitting at the heart of a growing developer community, one that builds upon Amazon's open APIs to the service.
Some companies like Cloudera and Red Hat will make piles of cash providing the infrastructure for this cloud-computing gold rush. But the biggest money of all will be those that can build platforms in the cloud, platforms that depend upon open source but which aren't open in the traditional open-source license sense of the word.
That traditional licensing world is dead. Open-source licensing has become an on-ramp to closed data services, hardly what its creators envisaged. In fact, proprietary cloud vendors are almost certainly going to become the biggest cheerleaders for open source, because it means more developers creating more on-ramps to the cloud.
Even if such providers create effective exits, it's unlikely that consumers and businesses will actively use them...
...just like in the Software 1.0 world.
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