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Open-source companies' developer dilemma

Open source offers a fantastic way to reach developers and users of one's technology. Ironically, however, the very group most inclined to adopt open source is the least likely to pay for it.

Therefore, to make an open-source business thrive in enterprise software, vendors must learn to distinguish between developer-users and IT operations-buyers. As I'll explain, however, open-source companies may need to guard against becoming too successful in order to preserve their exit opportunities.

It is, of course, quite possible to make money in open source. Lots of it. Red Hat, for example, is approaching $1 billion in … Read more

Virtualization and the cloud: Tech, talk to converge

SAN FRANCISCO--The claim has been made in the last couple of weeks that cloud computing has reached the top of analyst firms' famous hype cycle and is a top-of-mind issue for most IT organizations.

That's a bit misleading, as the interest in cloud computing is often taken out of context, and when you bring virtualization into the picture, that interest seems to remain exploratory rather than strategic.

Amazing innovation is happening in both public- and private-cloud offerings, and the overwhelmingly positive response to cloud computing--in particular to Amazon's top-notch Elastic Compute Cloud, Simple Storage Service, and related offerings, … Read more

InfoWorld's two minds on open source's value

Each year InfoWorld sets out to rate the "best open source products" with its Bossie awards. Too bad it has decided to cloud the voting with open-source politics, as well.

The politics reveal themselves when InfoWorld tries to settle on a winner between Zenoss and OpenNMS. (Why Hyperic isn't also in that mix, or Reductive Labs' Puppet, I can't fathom, but...)

The editors write (note: the emphasis is mine):

Although Zenoss clearly has the more developed feature set, our Bossie goes to OpenNMS. The reason boils down to business models. OpenNMS is a purely open source … Read more

Red Hat and Acquia thrive on complexity

Drupal is a fantastic Web publishing platform that derives much of its value from a disparate community of contributors, as Xconomy recently wrote. With more than 4,000 contributed modules from over 3,000 active contributors (741 of which contribute to Drupal Core), Drupal has something for everyone, which is both its greatest asset and biggest liability.

Choice is good. Too much choice, however, can be bad.

The same holds true for Red Hat, which charges a premium for its Red Hat Enterprise Linux distribution to enterprises that want to tap into Linux but don't want the bother of … Read more

Twitter pro accounts coming by year's end

Well, it looks like Twitter will actually do it.

In an interview with VentureBeat on Thursday, Twitter co-founder Biz Stone elaborated on the company's goal to put out a revenue model before the end of the year. He said that yes, it will involve offering paid accounts to businesses that use the microblogging platform for marketing, customer relations, publicity, and what-have-you. That's something Twitter has been hinting at for about a year now.

There's not a whole lot of detail available. But paid accounts will definitely involve statistics and analytics that aren't available through Twitter's … Read more

A simple formula to gauge a freemium model's success

For all the value that open-source development provides, Red Hat CEO Jim Whitehurst recently reminded the industry that open source may be more potent as a business model than as a development model:

Open-source development is great and all that, but I think more of the value of Red Hat comes from our open-source business model than from the development model.

The truth of this statement came home clearly to me in a conversation with Michael Mullany, vice president of marketing at Engine Yard, a cool company that provides on-demand deployment and management solutions for Ruby on Rails applications. Mullany … Read more

Red Hat celebrates its 10-year IPO anniversary

Ten years ago today, on August 11, 1999, Red Hat saw its shares triple in an initial public offering that ushered in a new era of commercial open-source prosperity.

Iain Gray, then a Sun employee and now Red Hat's vice president of Global Support, writes nostalgically: "I remember sitting in the Sun office in UK watching the stock skyrocket, thinking the world had gone mad."

Indeed it had. Soon Red Hat's stock was to plummet to earth but not before the company learned a valuable lesson: there must be more than hype to make open source … Read more

A movement for meaning-driven business?

Frog Design's promised series on “Meaning-Driven Business” is taking shape. After introducing the concept of “Chief Meaning Officer” in the “Power” issue of design mind, we are going to formally launch this new forum in our upcoming special TEDGlobal issue (to be released on Sept. 21, 2009) as well as on a special microsite to be launched in a couple of weeks.

For the first round of essays, we are delighted to have received contributions from three industry and thought leaders: Beth Comstock, chief marketing officer of GE and one of the world's most influential Fortune 50 marketing executives, will take the economic crisis as an opportunity to make the case for marketing-driven innovation. Werner Bauer, Nestle's chief technology officer and head of innovation, will describe his company’s concept of “Shared Value” and how it enables a more socially responsible business. And Dev Patnaik, founder and chief executive of innovation consultancy Jump Associates and author of the book Wired to Care, will illustrate how “high-empathy organizations” of all kinds prosper when they tap into a power each of us already has: the ability to reach outside of ourselves and connect with other people. Stay tuned!

The conversation is continuing in other outlets, too, and some pundits want “meaning” to not only be an abstract concept, but a movement. Economist Umair Haque is one of them. His "Generation M (as in “meaning”) Manifesto" stirred some controversial reactions (just read the comments on his blog)--from unconditional endorsement to accusations of arrogance and naiveté. It is one out of many manifestos that have recently been published on the new “new economy”--this, too, is a sign of the times. Manifestos indicate an increased need for ideological alternatives – and meaning.… Read more

Bandwidth.com's investment in FreePBX paying dividends

In 2008, Todd Barr left Red Hat to try his hand at an open-source start-up. Now, one and a half years later, Barr is doing just that, hoping to turn the telephony world upside down at Bandwidth.com, a company that operates a proprietary voice network, but is betting a great deal on the open-source FreePBX project.

This shouldn't be surprising, given the increasingly intertwined fates of proprietary and open-source software. But it's interesting to watch Bandwidth.com--a 10-year-old company that sells business voice and data services--incorporate open source into its strategy. After all, the company recently built … Read more

SpringSource, Canonical, and MySQL join Red Hat on Microsoft's hit list

For years, Microsoft had it easy. The two busiest groups within the software behemoth were the accountants, adding up all the billions in profits, and the CD/DVD burning team, which simply had to burn more copies of Windows and Office to keep up with demand.

Today, life is a little less rosy for Microsoft, as it calls out in its recent 10-K filing with the Securities and Exchange Commission. As TechFlash highlights, Google Android is now called out by Microsoft as a competitor, as are Apple, Opera, and Google in browsers, whereas only Mozilla was deemed worthy of Microsoft'… Read more