Collaboration

CTOs vote for open source, but buy proprietary software

I was fortunate to be asked by my friend, Jon Williams, to speak at Wednesday's New York CTO Club, a gathering of dozens of CTOs from a range of interesting (and some quite large) enterprises. The topic today was "Open Source as a Renewable Resource," with the focus on how enterprises can contribute cash or code (or other contributions) back to open-source communities.

However, much of the discussion turned on how open-source companies should be making money, rather than how enterprises should be contributing code. The interesting thing was that while the CTOs looked to open source as an inexpensive means of discovering and evaluating software, all seemed to believe that adding proprietary services or software was the right way to monetize it.

I was surprised, to say the least. I talk with a lot of enterprises in the course of my business, and open source is always a primary reason for why they purchase my company's product, even if they don't intend to view or modify source code. The question I never asked, however, because my company doesn't offer proprietary software, is how the buyers would react to proprietary ("commercial") components.

From what I heard today, it's a non-issue. Every CTO that spoke up (and it was a very open forum) said that they are happy to pay for proprietary extensions to open-source software, and criticized pure-play open-source vendors for not providing an obvious, compelling reason to pay: proprietary bits. (One actually said that we have built a great financial model...for SIs, not for ourselves.)

Trying to shift the burden of proof back onto themselves, I asked why they don't contribute to the open-source projects from which they derive so much value. Many indicated that it's too hard to contribute back to open-source projects due to internal legal issues and the high bar to knowing how to contribute. They suggested that they would instead prefer to pay the open-source companies to do that work for them.… Read more

The dying embers of Microsoft's IP claims against open source

Horacio Gutierrez, Microsoft's intellectual property counsel, indicated that Microsoft has finally seen the open-source light in a recent interview with CNET. Demonstrating that Microsoft has finally learned that it can't fight open-source gravity, Gutierrez suggests, "Today, but increasingly in the future, we are all going to be 'mixed source'," meaning Microsoft and everyone else will balance open source with some proprietary element to their business.

I actually think the war between proprietary and open source is a thing of the past.

In fact, we're already there. Even Microsoft. But it's nice to have Redmond admit it.

What was perhaps less pleasant, and completely unnecessary because Microsoft lacks both the will and the strategic interest in pursuing it, was Gutierrez's saber-rattling over Microsoft's patents:

While Microsoft is patient, Gutierrez indicated that Microsoft's patience is not unlimited. "If every effort to license proves not to be fruitful, ultimately we have a responsibility to customers that have licenses and to our shareholders to ensure our intellectual property is respected," he said.

Yes, you do, Microsoft. Fortunately, the more Microsoft uses open source within its products, the less it trots out this tired refrain from the past.

The fact is that Microsoft has yet to find a way to call out its intellectual property (IP) in things like Linux without stumbling over all of the IP that it, in turn, has "borrowed" from others, including the open-source world. Plus, Microsoft can't sue open-source communities without bumping up against companies like IBM with much broader patent portfolios than its own. If Microsoft sues, Microsoft loses.

Indeed, I'd argue that one primary reason for shacking up with Novell wasn't Microsoft's patent portfolio, but rather Novell's: Novell had key IP that goes to the heart of Microsoft's Office business. The Linux patent covenant was a way for Microsoft to clean up its own patent violations. Funny, that. When I was at Novell my team in the CTO's office never worried about a patent lawsuit from Microsoft.

But that's just the way the modern software world works: it's such a thicket of conflicting IP claims that the only rational (and workable) solution is to overlook competing claims.… Read more

Gartner's 'augmented reality' on IT spending

I read with interest ZDNet's report on Gartner's revised IT spending predictions for 2009. The gist? Worst case, IT spending will fall by 2.5 percent, rather than grow by 3.3 percent, with Western Europe and North America the hardest hit.

This doesn't sound so bad, though it's important to remember that Gartner's IT predictions tend to follow the market up or down. In other words, they're a good barometer of what happened last week on the stock market rather than a clear view into the future. If things get worse, Gartner's … Read more

'Free lunch' and open-source support

Sometimes "free" is not so free.

I recently discovered this when a large, global system integrator (SI) deployed Alfresco Labs, our free and unsupported product, for a large client in Europe. The SI wasn't a partner of ours, and as the client soon learned when its deployment stumbled, the SI wasn't capable of providing enterprise-class support on the product. Yes, it knew the product well enough to deploy it and get paid over $50 million for its trouble, but when the deployment hit a glitch, guess to whom the SI came crawling for help?

It's not just my company. I know of another global SI that has deployed well over 100 Mule ESB instances, without buying support through MuleSource for its clients for a single one of them. If something goes wrong with those installations, the enterprise clients are going to end up paying a premium for the SI to figure out how to resolve the problems on the client's dime, never mind potential indemnification issues.

Not all SIs act like this, at least not all the time. My own company works closely with Satyam, SAIC, Booz Allen Hamilton, and others, and Accenture sells supported instances of the Spring Framework, but this is the exception to the rule for the large SIs, many of which seem happy to deploy open-source software for their clients without buying support or production-grade versions of the software.

Such SIs seem to believe that life has started raining free lunches.

This is a myopic way to do business, as the large SI in my initial example found: in that example, spending $50,000 (in the midst of a $50 million project) would have saved the SI the embarrassment and cost of trying to support a product that experience proved it didn't know nearly as well as it thought it did. The SI risked the success of a $50 million project to boost its margins by $50,000, only to find that one problem with the software ended up costing it and the client far more than $50,000.

If you're an enterprise looking for a strong SI on a project, here are a few things to consider:… Read more

Who needs an open-source strategy? You do

It's no surprise that Oracle CEO Larry Ellison is on the prowl to acquire more companies, as reported by CNET, given that it gives him a chance to go shopping on the cheap.

.If times are tough, there are other opportunities...including making acquisitions that cost less... (A)cquisitions that we've been looking at for some time are less expensive for us.

Is Red Hat one of them?

I hope not, but there are plenty of good reasons for Oracle to be looking at acquiring an open-source company like Red Hat, or to be contributing significantly to various open-source projects. Open-source companies like Pentaho, Digium, and others should be attractive buys and open-source projects should be compelling strategies right now, for a few different reasons:

Open source provides an efficient way to attract new customers. Oracle, IBM, SAP, and others spend huge piles of cash attracting new customers. Meanwhile, open source keeps making inroads at the departmental level of large companies and is using such beachheads to expand into enterprise-wide use. Sun is using a variant of this strategy with MySQL: MySQL gets the CIO's phone number with a free download; Sun follows to get the CIO's wallet with not-so-free systems. Open source provides a clear up-sell opportunity for proprietary software vendors. IBM for years has been acquiring (e.g., Gluecode) or building (e.g., Linux) low-cost alternatives to its high-priced proprietary offerings, both to serve as "low-end" gateways to its higher-margin proprietary offerings like Websphere.… Read more

Open-source innovation in a recession

Nat Torkington over at O'Reilly Media suggests that a recession will be very kind to open source as companies seek to lower their IT costs while continuing to service business needs.

I think he's right, and every day I see the proof behind this hypothesis.

For example, I moderated a panel on Thursday with the U.S. Small Business Administration (SBA). The SBA needed a system that would allow it to iterate and innovate even if its budget withered, so it couldn't afford to go with a proprietary system that required new licenses for every change in … Read more