February 13, 2006 11:42 AM PST

Open source: The newest competitive tool

A few years ago, releasing once-secret source code to the public would have been a highly unusual first move for a company with a newly acquired software product line.

But that's exactly what Integrated Computer Solutions is announcing this week with the Project.net project management software it bought Jan. 1. And it's a move that today is downright ordinary. Open-source software has become not only increasingly mainstream, but it's also often a way for a company to gain advantage over a proprietary rival with a close guard over its software's underlying instructions.

"It's the only way to go now. It's the future of software. It's inevitable," said John Newton, who in 1990 founded a company called Documentum with proprietary software to help customers manage their digital documentation. Newton now is chief technology officer of Alfresco, a 20-person London start-up doing the same thing but this time with open-source software.

Bedford, Mass.-based Integrated Computer Solutions announced its open-source move in conjunction with the Open Source Business Conference in San Francisco this week. The conference has become a focus for a new wave of open-source companies with products that often run at a higher level than earlier open-source successes such as Linux or Apache.

Also at the show, Alfresco announced it lured away Kevin Cochrane, vice president of engineering from another competitor, Interwoven, along with three engineers. It also announced a version 1.2 of its software, which adds features to integrate with directory systems to govern who gets access to what information, host online discussions and comply with a related Java standard.

"He was frustrated with the direction commercial software was taking and what you could accomplish with the high-ticket sales model," Newton said of Cochrane's move. With open-source software, Newton argued, "The evolution cycles go so much faster, and the clock speed of the industry goes much, much faster."

Plenty of people disagree--among them VMware President Diane Greene, who faces open-source competition from the significant though still immature Xen project. She said in an interview last week that she believes proprietary software is a fine business as long as a company creates a constant stream of innovation ahead of the competition and finds a way to spread its product widely enough. To boost its software's adoption, the EMC subsidiary now offers two basic versions of its virtual machine software for free, one for servers and one for PCs.

But the open-source movement carries weight nonetheless. Once-proprietary BEA Systems plans to announce new open-source moves Tuesday. And the granddaddy of proprietary software companies, Microsoft, is trying to incorporate features of open-source programming. Bill Hilf, Microsoft's director of platform technology strategy, is delivering one keynote speech, as is Sun Microsystems President Jonathan Schwartz, who is overseeing a major conversion of that company's software to open source.

Integrated Computer Solutions Chief Executive Peter Winston said he decided to make Project.net software be open-source to expand the customer base. Though having the software available for free download cuts license revenue, the company will make it back in support contracts, he said.

"By lowering the average price, we get more people, smaller companies, and more companies outside the United States," he said. "We build a bigger user base and build the business on the bigger base." He plans to release source code in March or April using a variation of the Mozilla Public License to govern the software.

Among other open-source companies at the conference:

• Open-Xchange, whose server software competes against Microsoft Exchange, plans to announce its new version 5 on Tuesday. The new version works better with Microsoft Outlook features such as the ability to set vacation reminders or e-mail filtering rules and now supports mail encryption protocols including Secure Sockets.

• SpikeSource and SugarCRM are expected to announce on Wednesday a partnership to allow SugarCRM customers to choose support and certification services from SpikeSource. Customers who purchase the Sugar Professional application can get a year of support and automated updates from SpikeSource for the LAMP stack of components. SugarCRM applications are built using the LAMP combination of Linux, Apache Web server, MySQL database and PHP scripting language.

• Palamida, whose software inspects source code to reduce legal risks, is expected to announce Tuesday that it has added open-source components from the Eclipse Foundation and services firm SpikeSource to its service. Palamida can check whether a company's internally developed software inappropriately uses third-party software, including open-source components. Its compliance library database now has grown to roughly four terabytes, including five billion source code "snippets," the company said.

• Palamida competitor Black Duck Software announced its Enhanced Due Diligence program, a service that pairs its Web-based protexIP/OnDemand with experienced intellectual property attorneys from law firms. The service is intended to scrutinize software involved in mergers, acquisitions or investments.

• OpenMFG will spotlight the new version 1.3 of its enterprise resource planning software, a product that competes with proprietary products from SAP, Oracle and others. The new version includes credit card processing, a financial reporting tool, and integration with package delivery services; one customer is garment manufacturer Marena Group of Lawrenceville, Ga.

CNET News.com's Martin LaMonica contributed to this report.

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Just a new mantra
Going open-source is a new mantra promising some revenues. It is a potential 'tool' for new SW companies to get their foot in organizations.

But as fads come and go, basic principles of what organizations look for in a SW vendor stay the same. I doubt organizations will weigh open source more than stability/support/commitment. With those 3 in a product, you can care less if your code needs to be open-source. As quoted in the article - VMWare is a fine example.
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