The Open Road

Google's biggest threat is no longer Microsoft. It is itself.

As the company harvests copious quantities of personal data, it becomes dramatically better at serving customer needs...

...and at freaking them out over privacy concerns.

In other words, Google gets stronger with every Google Doc created, every Google Voice call dialed, and every Gmail e-mail sent. It becomes stronger because data is the heart of the Web's biggest businesses, as Redmonk analyst Stephen O'Grady implies.

But in so doing Google also becomes more threatening to the very consumers it is trying to serve.

Google Dashboard is meant to change this by putting consumer data back in the hands of consumers. It's a move that follows on Google's earlier pledge to "open data" and its Data Liberation Front.

Yes, but will he give me better search?

(Credit: U.S. Army)

As CNET reports, Dashboard lets people review the personal data Google has stored for them, delete it, and alter future collection policies. It's a great way for Google to mollify concerned users, putting control back in their hands.

Still, it's almost certainly never going to be used by the vast majority of Google users. Ever.

Why? Because for all our hand-wringing over privacy--and for good reason--the reality is that most of us, most of the time, really don't care. Or, rather, if accessing useful services or getting work done more efficiently requires some privacy concessions, we gladly concede.

It's not that we don't value our privacy. It's just that in many contexts, we value other things as much or more. We weigh the risks versus the benefits, and often the benefits trump the privacy risks.

It's the same thing with file formats. For years we've been agonizing over Microsoft's lock-in of customers through proprietary file formats (.pst, .doc, etc.). Now Microsoft is opening up the specifications for file formats like .pst (Outlook file format), and yet it will almost certainly change little to nothing in what products most people use most of the time.

People don't use Microsoft Office because they're forced to. They do so because it's convenient. (Yes, an argument can be made that it's convenient because Microsoft has forced network effects through lock-in.)

This, incidentally, is exactly the reason that Wednesday night I declared a ban on Microsoft Office in our family in favor of Google Docs--and didn't opt for OpenOffice (which we also use). I got sick of having to recover documents and perform other IT tasks related to a locally installed office suite, open source or proprietary. And I find it easier to let Google handle the back-end IT operations.

I wasn't trying to evade lock-in. I was trying to increase personal happiness.

Am I concerned about Google snooping on the documents we write and store in Google Docs? Let's just say I worry more about my time fixing Office than whether Google gleans any information from my 12-year old's seventh-grade essay.

Dashboard leaves Google in the prime position of being able to honestly say that it doesn't control user data, while still delivering increasingly beneficial services based on that data. It will not change the way that the vast majority of consumers use Google, but it just might change the way they think about Google.

A very smart move by Google, one that all data-driven businesses should emulate.

Follow me on Twitter @mjasay.

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.

"Skype is going open source!" screamed the headlines over the weekend. If only.

While Skype has acknowledged an interest in making its Linux client open-source, this may not mean very much in practice.

I love Skype and use it daily for both instant messaging and voice calls. Its quality is superb and the Skype team continues to enrich Skype's functionality (now including the ability to screen-share and video chat).

We've decided to open-source this logo.

Open source won't help with this. Not in the way Skype means.

As ZDNet captures, Skype isn't planning to open-source its underlying protocols, and certainly not its back-room server technology. Instead, it's just talking about open-sourcing the Skype graphical user interface (GUI). And only for its Linux client, apparently.

Snore.

First of all, why only Linux? Open source long ago stopped being the exclusive province of Linux, if it ever was. Without Mac OS X and Windows support, Skype is actually locking itself out of the vast majority of the market for software developers.

And then there's the question of what is being open-sourced: GUI code? Really? That's it? No protocols? Does Skype think developers simply want to add fuzzy dice to the UI?

It's not really Skype's fault, as ZDNet explains, because its source code is in legal no man's land right now. You can't open what you don't own.

But maybe it doesn't matter. Steven J. Vaughan-Nichols believes an open-source Skype is unnecessary, given that there are credible open-source alternatives that are already available. Perhaps. But they lack the adoption that Skype has, and in communication the network is everything.

But, again, this is probably the biggest reason to yawn at the news of a Linux-based Skype GUI being open-sourced. The magic of Skype is not in the client. It's in the cloud/server, and that's remaining closed because, as TechCrunch posits, Skype doesn't want its competitors to free-ride on its services.

In sum, despite the euphoric greeting of the news of Skype going open-source, there's actually very little to celebrate. This isn't good for developers, and it's not good for Skype. In open source, it's generally worse to contribute too little than too much, because the community's first (negative or positive) impression tends to last a very long time.

For those new to open source, whether on the business or development side, it's hard to appreciate just how far the movement has come in the past few years.

In 1998, when I had my first taste of open-source software through my company's investment in Cobalt Networks, virtually no one knew what open source was, including now-common projects like Linux. Things were a little better in 2000, when I joined a Linux start-up (Lineo), but I spent much of my time working with prospective customers to ease their concerns over open-source licenses like the GPL.

The world is open source's oyster.

By 2004, when a group of friends and I founded the Open Source Business Conference, there was significant, growing awareness of open source, but its adoption was still stymied by Fear, Uncertainty, and Doubt, much of it fomented by Microsoft (Steve Ballmer in 2001: "Linux is a cancer") and the SCO Group (lawsuit over the provenance of Linux code in 2003).

Today, SCO Group, once a high-flier, is struggling for existence. Meanwhile, Microsoft has committed another $100,000 to Apache Software Foundation, has started its own open-source foundation, and has embedded significant bits of open-source code within its proprietary programs, among other things.

Linux, for its part, struggled to get noticed in data centers back in 2003. It has since become essential, mission-critical infrastructure across the Global 2000 ranking of public companies

We've come a long way.

This progress reflects itself in the job market, where Linux-related jobs have seen a 6 percent rise in 2009 alone, while Windows-related jobs have plunged by 8 percent, according to data from Dice.com.

But it's also evident in enterprises' willingness--even eagerness--to discuss open-source adoption plans. Virgin America CIO Ravi Simhambhatla tells The Register that his need to do more with less drove the company to adopt open source and suggests that the open-source philosophy is a positive, disruptive force:

Our company doesn't need just another IT team, the more and more we get entrenched in the...way of doing things the less and less room we will make for ourselves to be innovative.

In 2004, when I was trying to find an IT executive to speak at OSBC, it was a lost cause. No one wanted to paint a legal bull's-eye on themselves for SCO or Microsoft. Today, company executives line up to talk up how they're differentiating through open source.

Open source has "arrived," and the signs are everywhere, from the U.S. Defense Department's efforts to boost its open-source adoption further to patent-rich Qualcomm's foray into open source.

Open source is no longer a question of "why" but rather one of "how." It's the way the industry does business, and the way it does development.

No, not everyone in the industry, all of the time. But for those of us who have been involved in open source for even the past five years, it's amazing to see how much things have changed, which suggests they'll evolve even further.

For some within the open-source world, this is unwelcome news. They defined themselves as freedom fighters, battling the forces of proprietary darkness. And as far as good-and-evil metaphors work in technology, they were.

But as that world embraces open source, they're largely left bereft of bogeymen, like old soldiers still struggling against an unseen enemy.

Winning can be a bit disorienting.

All the same, it's time to move on. There are no more vampires to slay, but simply further open-source education to undertake. Enterprises need open source now, more than ever, and they're adopting it now, more than ever.

What a long, strange trip it's been.

Linux jobs in the United States are booming, up 6 percent since January, according to data from Dice.com. This will come as small consolation to Novell employees, however, which weathered another round of layoffs at the Waltham, Mass.-based company.

According to several sources within the company, and confirmed by Novell's public-relations director, Ian Bruce, Novell last week laid off 100 to 130 people of its roughly 3,900 global employees.

While my sources indicated that the Workgroup division was particularly hard-hit, Bruce told me that the cuts came "across the company, both geographically and productwise."

Novell appears to be doing its best in caring for these employees, offering several months of severance pay, apparently based on the number of years with the company, among other factors.

For those remaining employed there, Novell announced this week that it would be suspending 401(k) matching contributions, which followed on the heels of its formal filing on Monday, to that effect, with the U.S. Securities and Exchange Commission.

Novell has spent the past few years attempting to reinvent itself as a Linux company, and it has managed to string together several quarters with strong earnings in its Linux business on the back of its controversial partnership with Microsoft. The company has struggled to compete effectively with Linux-leader Red Hat.

On November 2, a Novell PR representative contacted me to arrange a conversation with CEO Ron Hovsepian about Novell's "new focus in its strategic direction."

Whether this means more or less open source is not yet clear. It is clear, however, that Novell needs to focus more on top-line revenue growth, and not merely ways to cut costs. Until Novell learns to grow business, and not simply reduce expenses, its employees are going to remain all-too-familiar with layoffs.

Tim O'Reilly

(Credit: Dan Farber/CNET News)

Some of us take longer than others. Tim O'Reilly moved on years ago from talking about open-source licenses and instead focused on the importance of data to business success. In the open-source industry, we heard his words but clearly didn't understand them.

We kept selling software through our "awkward teenage years," even as Google, 37Signals, Facebook, and others gave it away.

Years later, as Google pays for mountains of open-source code by aggregating data and selling data-rich services, we're starting to grok O'Reilly's message. It's what makes companies like Path Intelligence so interesting.

Redmonk's Stephen O'Grady notes:

Much has been made of the lack of an obvious revenue model for properties like Twitter, and to a lesser extent, Facebook. But when looking at the organizations' balance sheets...it seems self-evident that the value of the data assets involved is seriously underreported...

The economic value being assigned to data helps to explain why, while being sympathetic to questions about Twitter business models, I've never been overwhelmingly concerned. Where the revenue model for the dot-com era "eyeballs" strategy was equal parts indistinct and aspirational, the Web 2.0 businesses are being built out in an era of customers increasingly predisposed to analytics and data driven decision making. In other words, there's a market for their most valuable asset.

As Microsoft's Windows, Office, Xbox, and SharePoint businesses demonstrate, the real money is in the platform business, which is, or which can be, a data business. The more businesses and developers that build upon your software, the more valuable that software becomes. Even systems like Twitter are being turned into platforms.

But how you build the platform is increasingly important. Microsoft is Platform 1.0. Open source is Platform 2.0. It's a more efficient way to build community around a core, which is why Google and other savvy companies increasingly turn to open source as a fundamental way to entice developers, which developers create more software which invites more adoption which yields more data...you get the picture.

It's also why I believe Google Android, in its platform battle with Apple's iPhone, will ultimately prevail, so long as it can work in peaceful coexistence with the developer community (which has not always been the case).

Unlike many open-source companies, however, Google et al. have the singular benefit that since their business is data, not software, they can shepherd open-source development without taking a heavy hand in community management. More open source leads to more adoption, which leads to more data, which leads to the Googles of the world being able to give away even more software for "less than free."

It's genius. And it's amazing that it took so many of us so long to heed the counsel O'Reilly offered years ago.

In sum, this isn't a suggestion that companies should forgo profits in exchange for mindless popularity contests, as 37Signals' Jason Fried rightly pillories.

Instead, it's a call to look for ways to fund open-source development with rich, data-driven businesses. Most open-source companies focus too much on software, and most Web 2.0 companies focus too much on data. It's the blend of the two that makes a company successful.

Just ask Google.

(As an end note, I think Gartner's Brian Prentice is on to something when he speculates that enterprise applications may increasingly be communally developed by IT end users, though perhaps coordinated by vendors. It's a very interesting prospect, one that will enable even more open-source development in an area where data may not fund it.)

The day open source became big business is the day that open-source development exploded. Yes, open source predates the moneyed interests hankering to use it to competitive advantage, but it really wasn't until IBM dropped $1 billion on Linux that companies began paying employees to write free software that the movement saw broad adoption.

That's when open source became more than an efficient way to develop software, and also became a great way to build a business.

However, adding open source to one's business is not magical pixie dust that guarantees its viability. As IBM's Bob Sutor explains:

The basic principles around revenue, profit, loss, taxes, payroll, overhead, accounting, sales, incorporation, health care, and human resources all apply. You can be a starving open source software entrepreneur as easily as a starving proprietary software entrepreneur. No one will excuse basic business failures and screw-ups just because you use open source. Make sure that you will produce a product that people want and in some way will pay for, no matter how indirectly.

Sutor's counsel applies to any company or individual that wants to build a business around open-source software, but arguably some of the industry's best projects are not the product of any one company, but rather of several. Linux, Mozilla, Apache Software Foundation, Eclipse, and other collaborative communities represent an interesting way to use open source to competitive advantage.

In many ways, open source has become a critical component of the software industry because the market has largely moved from vertical businesses (i.e., companies controlling all aspects of production, distribution, etc.) to horizontal markets (i.e., companies focusing on their core competencies and depending on others for complementary functions).

Linux: Peace, love, & squeezing Microsoft

But this business control system has a inherent risk. Should an organization monopolize a specific segment of a value chain system they can extract a higher percentage of its total proceeds. If the product, or service, in question is price elastic than those additional proceeds will come from other participants in the value chain system.

Case in point? Windows. By owning the operating system, Microsoft threw a wrench into the collective cogs of horizontally oriented software firms like Intel, IBM, and others.

The industry's response--Linux--is a classic example of the open-source approach to mitigating individual choke holds within an industry, as Prentice goes on to write:

What then does a CEO do when facing a squeeze on their profits because a direct, or downstream, supplier is dominating a segment of the value chain system? Besides negotiating a better deal - if they can - they've been left with little choice but to get directly into that segment of the value chain system themselves. But by doing so their organization is distracted from focusing on its own core competency.

The risk of such an undertaking can be mitigated if there is a collective response by similarly affected members of the value chain system. After all, it is usually a shared problem. But collective responses have always had an inherent, and often fatal, flaw. Who owns the resulting assets? Either organizations enter into complex joint venture agreements to sort this out or run the risk of shifting the distortion in the value chain system to another organization.

Again, Linux offers the perfect example. IBM, Intel, Red Hat, and others aren't investing in Linux because they're all chums at the country club together, but rather because they're looking for ways to reduce Microsoft's hold on their own businesses through its control of personal computer and server operating systems.

As an added benefit, it's a great way for companies to collaborate without running afoul of antitrust laws. It's collusion without the collusion.

Intriguingly, even Microsoft is getting into this game. Microsoft's partnership with open-source ad serving company OpenX indicates that Microsoft, too, is figuring out how to use open-source complements to loosen strangleholds competitors like Google may be hoping to throw in its way.

This is why open source is growing so much faster than the rest of the industry, as IDC finds. It's not because we love each other more. Quite the opposite. It's because proprietary vendors have figured out that open-sourcing key complements to their core businesses can be strategically decisive in hurting competitors while helping themselves.

For years, open-source advocates have been praying for someone to free us from Microsoft's proprietary grasp. We've prayed in vain as Linux, OpenOffice, and other open-source software programs have failed to dent Microsoft's dominance.

Until now.

Google, not Red Hat or Sun, appears to be the long-awaited redeemer of both personal computers and servers, and has even staked a credible claim in the mobile world, as well. Google achieves this, in part, by writing copious lines of open-source code, but pays for this "generosity" with insanely profitable proprietary services, services that have long appealed to consumers but increasingly appeal to enterprises, too.

Google, in other words, is arguably not the open-source savior we were expecting, but it's probably the one we deserve.

(Credit: Matt Asay)

Despite more than a decade of trying to make "pure" open-source software businesses work, it's telling that only one company--Red Hat--has managed to pull together more than $100 million per year in revenues for its troubles. For its part, Red Hat is quick to downplay the relevance of its revenue model for just about any other business.

Hardly a rallying cry to the still-growing open-source ecosystem.

Yes, MySQL got to $94 million before Sun gobbled it up, and yes, other start-ups (my own, included) are getting closer to the mark, but none, including MySQL, is wholly dependent on selling open-source software subscriptions to achieve this goal.

We also include proprietary add-on value. Like Google.

So we're left with Google, which is, perhaps, the world's largest open-source company, contributing more open-source software and resources than any other, in my estimation. (Sun likely wins on sheer volume of code, but being an "open-source company" involves more than simply code.)

How does Google do it? Well, for one thing, it learned long ago that monetizing open-source software directly is tough. So it simply uses open source to shepherd prospective customers to its other services, like Search or Google Apps.

Indeed, it is the success of these proprietary products that enables it to be such a generous open-source benefactor, much like IBM, Intel, or, for that matter, Sun (which sells a lot of proprietary hardware). Take away these companies proprietary product lines, and overnight we'd see dramatic decreases in their investments in Linux, Apache Software projects, etc.

And we'd all be the poorer for that.

In an ideal world, open-source software companies would thrive by simply giving away lots of code, and having enterprises and government organizations serve their long-term interests by paying for support.

We don't live in that world. Some organizations do buy support for open-source software, of course, though many others do not, and some only pay long enough to become self-sufficient whereupon they dump their support contracts, as former CTO of NBC iVillage Jon Williams once declared.

Until we cross the border into Utopia, we're going to continue to see the biggest investments in open-source innovation come from Google and its peers: companies with wallets fat with proprietary profits.

As I said, this may not be the open-source world for which we've hoped, but it's the one we deserve, because it's reflective of what we value and, hence, what we pay for.

See also Mark Hinkle's response to this post.

Gartner has had a rocky relationship with open source in the past, but recent research suggests that its views on open source have evolved. It's therefore time for the open-source world's views on Gartner to evolve, too.

Gartner hasn't historically been much of a friend to open source. While Forrester, Redmonk, the 451 Group, IDC, and other analyst firms long ago began recording the rise of open source within enterprise computing, Gartner seemed to side with the proprietary vendors in steadfastly arguing that open source's impact was negligible.

This resulted in some suggesting that Gartner's research was simply a reflection of which companies paid it the most money (and recently netted the analyst firm a lawsuit).

I made similar accusations myself.

Gartner responded to such attacks, defending the integrity of its research. Yet its blind spot to open source seemed to persist.

Not anymore. Whatever the reason for the erstwhile overlooking of open source, Gartner analysts' current views on open source have changed, in some cases dramatically.

It used to be that open-source companies and projects never made it into Gartner's Magic Quadrant (MQ), which have tremendous power for, if somewhat limited utility to, enterprise buyers.

Now, you'll find that Gartner lists Drupal ("Drupal is in the Visionaries quadrant because of its use of the open source model to drive adoption and popularity, while providing enterprise services via organizations such as Acquia"), Liferay, and MindTouch in its newest "Social Software in the Workplace" MQ, while Alfresco, MySQL, JasperSoft, Pentaho, and others are listed in a variety of other MQs. (Disclosure: I work for Alfresco and am an adviser to MindTouch and JasperSoft.)

Gartner also recognizes the broad adoption of open source in the enterprise and how open source is affecting even proprietary software vendors.

This isn't to suggest that Gartner finally "gets it" because it's writing favorably about open source. In fact, some of Gartner's best, most interesting analysis is available for free on the blogs section of its Web site, not all of which is positive about open source.

It is, however, balanced and often quite insightful, particularly the work of Gartner analyst Brian Prentice.

Given all this, it's time for open sorcerers to stop using Gartner as a straw man for poor analysis on open source. This isn't helpful and, increasingly, it's not remotely accurate.