Spoiling the open-source IT management party

SpringSource announced news earlier today that it has acquired Hyperic. This is good news for SpringSource, but not everyone out there believes that it's good news for open source.

The PR representative for Nimsoft, a proprietary IT management company, decided that it would use the occasion to fling mud at Hyperic and open-source IT management solutions. In an e-mail pitch to me, it ends up going long on claims and short on substance.

My responses in italics below.

We noted with interest your article on SpringSource's acquisition of Hyperic this morning. We believe that this is very key for SpringSource, as it allows them to protect their business model, going forward, but wonder what it means for open-source vendors in general.

I work for an open-source company that has doubled or tripled sales every year since inception, and know a slew of open-source companies doing really well in the bad economy, including Hyperic, but apparently this PR person didn't know that. ;-)

An executive from Nimsoft, a performance- and availability-monitoring company, would like to share with you his thoughts on why you will see more open-source performance-monitoring companies either shutting their doors or becoming acquired in the near future.

I'm all ears! I guess this executive from Nimsoft isn't privy to the financial performance of Zenoss, Hyperic, Groundwork, and others, and so he doesn't know that if they're acquired, it's likely because they're doing well, not poorly.

Specifically, he would like to discuss:

• Why open-source models won't work, going forward

I've spent the last seven years blogging about why and how they will succeed, but hey! A proprietary software company that only managed to sign 29 new "logo" customers in its past quarter is probably well-positioned to advise the rest of the market on why open source will fail...even as Microsoft, Oracle, IBM, and others all buy into open source more heavily.

• What companies are discovering about the hidden costs --inexpensive up-front but high-manpower costs moving forward to manage the environment

I guess Nimsoft didn't get the memo from Forrester Research that 92 percent of companies it surveyed actually do save money with open source. Even after all those "hidden costs" are factored in.

• How the business model is affected by the economy: Why the practice of "giving the product away" and hoping companies will sign up for maintenance contracts is facing challenges.

Finally, something we can agree upon! I have seen many open-source companies facing the challenge of meeting big spikes in demand in the bad economy. Maybe the Nimsoft representatives should look at this chart:
It shows the positive trajectory the negative economy is having on open-source sales.

Please let me know if you are interested in speaking with Nimsoft, and I will be able to get you in touch with them, as well as get you any follow-up material that you might require.

I think the only follow-up material I'll need is real data on open source, but then, I guess I've been posting that for quite some time here, so perhaps after Nimsoft has taken the trouble to read it...? Thanks.

Follow me on Twitter @mjasay.

[lwalter71]

Good post, Matt. I remember speaking with a long-time industry analyst and consultant 3 years ago (who was definitely *not* an open source fan) and he said "When I ask your proprietary competitors about open source, I get back lots of words and phrases but ultimately the only real thing I can glean from their comments is that they really hope open source just goes away."

I didn't get the original note, so I'm going off your excerpt. But it looks like opportunism - looking for any change in a given market's open source landscape (or one vendor's next strategic move in that market) as a "troubling sign" for open source competitors. But Nimsoft supports Red Hat, SuSE Linux, and other commercial open source platforms as well, so they must not think it's all bad.... ;-)

-lance
Pentaho

[jimmyed2000]

Hi Matt,

I think Nimsoft should be congratulated. They appear to have graduated from the 'ignoring' phase of their open source strategy to the 'ridiculing' phase. I wonder how long before they get to the 'fighting' and 'losing' phases.

James

[mediocrates--2008]

Followed by the Bargaining, Depression, and Acceptance phases? :-)

[mikemaney]

I'm all for opportunism when it comes to PR (although I like to refer to it as being aggressive vs being opportunistic). But if you're going to engage a (reluctantly) well-known voice of the open source community, you best come to the table with more than a few lofty, unsubstantiated bullet points.

How this pitch should have gone:

"Hi Matt. I rep Nimsoft (proprietary competitor to Springsource/Hyperic). I've been following you for a bit (you know, that competitive monitoring stuff...well, that and your Apple posts) and think the folks at Nimsoft might -- as you would expect - have a slightly counter take to what today's news really means. I realize Nimsoft is the ManU to open source's Arsenal, but I also know you are a fair blogger and realize a good traffic-driving Q&A when you see one (plus, the Nimbus guys have stats they can bring to the table). Game?"

Of course, the above pitch *only* works if the stats back up the story (which you've shown they probably won't).

Mike
twitter.com/the_spinmd

[jontravis]

Matt,

Love your fancy chart -- what are we actually looking at? Anyone can overlay an 'up & to the right' on a 'down and to the right'

Jon Travis

[GaryNimsoft]

Hey Matt
Firstly, let me say that this message was not posted by anyone at Nimsoft; it was posted by a junior member of our PR agency and we are speaking to them about it.

I personally believe that there is plenty of room for both open source and commercial vendors in the broad network monitoring space. I know of many successful implementations of both (and may failed implementations of both as well).

But, I would challenge you on your comments regarding the performance of open source based vendors in this space. I do have quite a bit of information and would suggest that there are a number of them that are in financial trouble. For a commercial vendor, it's not about how many customers are using the product but rather about revenue. Revenue is of course driven by successful customer deployments, upsells, maintenance revenue etc etc.

At Nimsoft we are pretty open with our revenue (for a privately held company) - maybe we could ask the other vendors you mention to show the same openness?

Anyhow - bottom line is there is place for everyone and Nimsoft continues to be tremendously successful

Cheers

PS Go Man Utd!

[jgehlbach]

Matt, I think you meant to write:

"I work for an open-CORE company..." :)

http://newton.typepad.com/content/2009/03/building-a-stronger-open-source-product.html

[ITRebel]

The problem with Matt's graph is that the economic decline only started in the past 6 months whereas this linear trend has been going on well before then. Therefore, it must represent something else and that something is most likely that these open source companies are new software companies and new software companies always show increases in sales revenues if they survive. Any conclusion that it is due to open source is based upon a major confound in the data. A similar graph of all dot com companies that eventually went out of business would have also shown a similar linear increase in revenues for the first few years.

By the way, I would be curious about Matt's response to the well publicized interview with the internet head Mr. Al Rousan from Jordan yesterday who was asked the following:

Is Jordan planning to adopt open-source software in government agencies?
Al Rousan: It will cost you more, by the way. We are working in the hospital sector, using open source. I think that in the beginning, the cost will be higher. In the long run it could be better. You have to develop software to interface with the open source, which will cost you more. A country like Jordan cannot afford such things.

This answer would seem to throw a monkey wrench in Matt's often professed thesis that open source is always the less expensive alternative. The gentleman from Jordan says that "In the long run, it could be better", but the upfront investment is much greater. This greater upfront investment would also seem to be a problem for many companies during a recession. The low entry costs look inviting, but the hidden costs of having to pay all of the system implementers etc. is what all of the open source experts never talk about.

[Uberoi]

This debate has been going on for years. In the meantime several OS software such as Linux, mySQL, Lucene have consistently gained a significant market share. For instance the Apache Lucene (search software) downloads have grown over 40 times in the past 4 years.
Businesses need to solve their unique problem/s and in most cases end up picking whats best/optimal for them, cost being just one of several considerations.