At lunch with Michael Coté from RedMonk on Wednesday, we talked a lot about how open source has really split into "free" and "open source," with the former typically associated with basement developers and Apache licenses, and the latter generally associated with the General Public License and some set of enhanced features.
As I was following Coté's Twitter feedearlier, I started to wonder whether everything really will go to the cloud and all of our open-source musing will go away, as software becomes consumed versus installed.
Realistically, there is a vast array of software that really can't move outside the enterprise in the foreseeable future. Consider, for example, banking and stock-trading systems, or telecommunications infrastructure. On the other hand, consider pretty much everything else. Even when you take into account the complexities of back-office systems, odds are that in a green-field situation, you could find a software-as-a-service application to solve your problems.
So here's the paradox that I think about: Let's consider a company like Google, which writes, buys, and installs a lot of software. Some is unique to its business and isn't available as an online service. Other products are packaged applications. Yet it wants the rest of the world to stop buying software, instead just consuming it from Google.
I'm not seeing a way that on-premise software disappears forever...
Following on its successful launch of Red Hat Enterprise Linux as an Amazon Elastic Compute Cloud service, Red Hat is now offering the JBoss Application Server on EC2.
It's yet another example of open source truly becoming a Web-enabled service, rather than a mass of packaged bits and bytes. And it comes at a reasonable price:
Red Hat is charging a fixed subscription rate of $119 per month for JBoss Enterprise Application Platform, or a variable fee, starting at $1.21 per instance, per hour, with fees depending on the size, bandwidth, and storage of the services purchased...Customers can either license JBoss on EC2 from Amazon and receive a virtual image of the software, or make their own subscription of JBoss available on Amazon's compute cloud.
The more Red Hat and others can deliver their software as Web services, the less trouble there will be with getting a fair return on R&D investment in commercial open source. It makes a development service into a Web service, which looks an awful lot like a product that people are used to buying. Maybe an answer to Savio's fair critique?
Sun Microsystems is launching a program to help software makers convert their existing, on-premise applications into software-as-a-service offerings.
The Solaris On Demand program, announced on Wednesday, is targeted at independent software vendors. Sun offers the software, hosting and services to convert applications. Sun says it is partnering with NaviSite. AT&T's USi Communications, and NTT Europe to provide hosting services.
Sun, along with partners, will offer a 90-day proof-of-concept trial to give independent software vendors access to hosting, hardware managed services, and backup services. The company guarantees a service level agreement of 99.5 percent uptime.
The service price varies by ISV, based on the scope of work needed, according to Sun. The price "can vary from a thousand dollars to hundreds of thousands of dollars based on how many seats are required," according to Vince Vasquez, a business development manager at Sun.
Here is the first third of CIOZone.com's list of the top 60 fastest-growing, public software companies with revenue of at least $150 million.
(Credit: CIOZone.com)CIOZone.com has ranked the top-60 fastest-growing (public) software companies of at least $150 million in revenue, with VMware leading the pack and Red Hat claiming 12th place with a 33.6 percent growth rate. Not bad for a company that gives away its software for free.
But then, perhaps it's not surprising since Google, ranked second on the list, largely does the same.
What's most impressive in the list, however, is the growth rate being sustained by Oracle and Microsoft, because they're growing from a much larger base. It's fantastic that Red Hat is growing at 33 percent on a ~$500 million base. But Microsoft is growing by 25.7 percent on a $57 billion base, and Oracle is rising 24.9 percent on a $20 billion base.
That's amazing.
For smaller companies (more than $50 million in sales and less than $150 million), Omniture (Utah-based - hurray!) leads the pack with a 79.5 percent growth rate on a $143 million base. Not too shabby.
While the list is predominately comprised of proprietary-software companies, CIOZone points out that these vendors are succeeding precisely because they, too, are changing the game from a proprietary license model to a subscription model:
Software that increases the efficiency of corporate data centers, or that runs as an Internet-delivered service, is on a roll. Most of the fastest-growing software companies are doing one or the other....
While it was a good year for many software vendors, it was particularly good for companies that have discarded the older paradigm of install-and-maintain and are making their products available as online subscriptions.
This bodes well for open-source companies, for two reasons. One, many SaaS companies depend on open source (and will pay for it) to run their businesses.especially as an increasing number operate with a dual-mode model wherein they make their software available as an open-source download, with a pay-for-SaaS model to complement that. Kaltura, Loopfuse, and others are adopting this model, and I think it promises to be a highly profitable model for those that can pull it off.
Gartner seems to have checked its former open-source blindness at the door, and is now suggesting that 90 percent of all software-as-a-service providers will adopt open source in their infrastructure by 2010.
Cost cutting will lead to the move, said (Gartner)...Open source will be used in the operating system, application server, and at a database level and will make up 30 percent of an application.
Of course it will. Open source is the foundation of software innovation in the 21st century.
One big question remains, however: will open source provide SaaS' free lunch or will there be a quid pro quo? With AGPL and the Open Software License, it will be the latter. With 20th century open-source licenses, however, SaaS gets a free ride.
The more open-source software we want, the more open-source software we should be prepared to pay for, whether in cash or contributions. This is a fair exchange, and will provide the basis for a robust SaaS software economy for many, many years to come.
Metrics tend to play a middling role after a social-media company is established. With a few notable exceptions, most sites hit a peak then flatten out. The same can be said for open-source projects. There are peaks, but really what you want is consistency in the numbers. Hyper-growth is not sustainable and you will eventually saturate the addressable market.
One of the things open-source projects tout is their number of downloads. Download metrics are often very flawed but can help tell the story of how big the market potential is. Social-media companies talk about their number of registered users. Neither talks much about retained users unless the metrics are very impressive.
As I was reading Jeremy Liew's blog today, I realized the models of adoption of open source and social media are very similar: ... Read more
Back in June of 2006 I wrote a post about Microsoft's attempts to insidiously subvert and usurp the open-source community. In that post, I opined that Microsoft was using clever marketing to make nice with the open-source community with the launch of a developer site called Codeplex.
This week Microsoft launched a SMB program that contains the words "open," "value," and "subscription," none of which are common to Microsoft products, culture, or marketing.
Digging in a bit, I found myself confused not only by what the program portends to be but why it would be called it "Open Value Subscription," unless they were hoping to leverage buzzwords and concepts related to open source and SaaS (software as a service). It's such lame and dishonest branding, the marketing group should be ashamed.
... Read more
Webroot Software announced on Tuesday it has merged with U.K.-based Email Systems, a software-as-a-service security company.
The purchase will allow Webroot, a security software maker based in Boulder, Colo., to provide businesses with e-mail archiving, image scanning and encryption, Web filtering, and antispam, antiphishing and antivirus services.
Email Systems currently protects more than 1,500 businesses and 2.5 million e-mail boxes worldwide. The company filters and scans more than 1.2 billion messages per month. Last week, it was named CRN UK's Security Vendor of the Year.
Webroot, maker of Spy Sweeper, will continue its current relationship with U.K.-based Sophos for antivirus protection.
Webroot said it will support all existing customers of Email Systems with Webroot's technical support. Additionally, Webroot current business customers can obtain a free, 14-day trial of Email Security SaaS.
Gartner has issued a research note that finds that proprietary software is facing serious pricing pressure from a range of different software trends, among them Software as a Service (SaaS) and open source. My heart is bleeding for these poor vendors who have spent decades wringing every last dime out of customers with the "build once, charge everywhere" moment in time that digitization afforded. (I say "moment in time" because it's increasingly clear that digital "abundance" business models make more sense than faking scarcity.)
Gartner notes seven trends putting pricing pressure on yesteryear's software business models:
... Read moreSometimes we think that the reasons for Software as a Service and open-source success are mutually exclusive. According to David Heinemeier, founder and developer of the various 37Signals' projects and products, however, open source is integral to 37Signals' success.
In fact, it's fair to say by David's reasoning there's very little to recommend a proprietary software strategy anymore:
Open source provides an incredible amount of technical leverage for small companies. No matter how productive your rock-star programmers are and no matter how much judo you apply to your problems, solid infrastructure takes a long time and benefits immensely from broad involvement. It really does take a village to raise great infrastructure.
... Read more
