The Open Road

Nestle's Nespresso division, a Switzerland-based global leader in coffee, with more than 1,700 employees and sales into 50 countries, had the kind of problem most companies would love to have: growth. As its traditional retail channels moved online, it found it difficult to scale its systems to be able to manage its online growth.

Enter MuleSource, with its open-source Enterprise Service Bus (ESB) technology, Mule. In conjunction with a leading open-source system integrator, Optaros, the two put together a highly scalable services-oriented architecture for Nespresso that makes the coffee drip on time:

Nespresso engaged Optaros and MuleSource to help its corporate architecture team define and implement a new middleware architecture called Nespresso Open Architecture, or NesOA. This new modern architecture is based on service-oriented architecture (SOA) principles, including fully decoupled systems that support both synchronous and asynchronous integration.

With these capabilities, Nespresso's IT infrastructure can now enable new distribution channels, improve business agility, cope with increased transaction volumes, and more easily introduce new applications and services, as needed.

Sounds great, but it's especially telling that the initial implementation took only six months, a testament to the lightweight, open approach that open-source projects like Mule offer enterprises.

But open source isn't just a short-term time saver. In fact, its biggest benefits may come from increased flexibility down the road, as Nespresso's Joel Schmitt, an enterprise architect, declares in a case study describing Nespresso's deployment:

We are committed to an open-source approach, including MuleSource's Mule ESB, because complying with open standards is key for future extensibility and growth...With our new architecture, we have been able to add flexibility and agility to our system landscape.

In this case, Optaros and MuleSource delivered cost and flexibility benefits, but the same types of benefits are being discovered for a wide variety of applications by enterprise IT.

Disclosure: I am an adviser to MuleSource, and my employer, Alfresco, partners with Optaros. I do not, however, drink coffee, so theoretically, I'm biased against Nespresso. :-)

It's nice to read what open-source vendors think of open source: it's easy, cheap, and quite possibly the cure for cancer. (That last one is my personal hope.)

However, it's much more useful to get real customer feedback on open source. That's what makes Mercian Labels' shift to open source--with all the benefits and negatives that come with such a move--so intriguing. It's especially useful data, since the company meticulously tracked the highs and lows of its shift to open source on its blog, as its managing director, Adrian Steele, told me over e-mail.

In a summary of the process, which took more than a year, the company celebrates crossing the finish line:

For the first time, we have now shut down our old Windows servers and are now running every possible application we can on open-source platforms. The final "big switch" was done over Xmas by Rich and I, swapping all the main desktops for new Dell machines running Ubuntu 8.04 lts, and crucially the phone system from Trixbox.

But getting there was not easy. Among the problems include a wider-than-desirable variety of Linux distributions to support, file format support, and cost:

The cost of the migration has been significant, the vast majority in reprogramming and improving our old MS ACCESS MIS system into a web based framework. Short term pain, long term gain, it needed to be done for business continuity reasons, but its a cost that needs recognising.

The positives, however, apparently outweigh the negatives, among them:

• We have practically 100% compliance with software license conditions for everything we use in line with our values;
• Open source is, in our opinion, more reliable than windows, and often has better features than the comparable windows software...;
• We get lots of support from the FOSS community and are proud to be part of it.
• Ongoing cash license fees are low [including Zimbra, one of the main open-source products it uses]...;
• We have control of our IT investment future, and are not locked to one vendor with endless upgrade costs over years to come for MS OSs and the MS OFFICE packages.

This last one is the most overlooked benefit of open source, because it's hard to quantify in advance. Until you're out of the clutches of your vendor, it's hard to know in advance that they will raise prices. It's hard to know what your vendors' product decisions will mean for your preferred upgrade cycle; you may be forced to upgrade much sooner than you'd like, for instance. And so on.

Open source is not the solution to all IT problems, but it's an exceptional tool to solve some of its most nettlesome issues. That's what a small business like Mercian Labels discovered, and it's what many of the world's largest companies are also discovering.

BusinessWeek talks out of both sides of its mouth on Monday, on one hand carrying an op-ed piece from Collaborative Software Initiative's Stuart Cohen arguing that the "open-source business model is broken," while on the other hand talking up how enterprises are turning to open source to save money and drive productivity in tough times.

Which is it?

It's both, of course. Cohen is referring to a bit of a straw man when he claims open source is dead, referring to support-based business models that don't add "proprietary" value beyond the base, open-source code. All successful open-source companies have always had some value-add beyond the base code itself, whether that company is Red Hat, MySQL, SugarCRM, Zimbra, or IBM. We've just become more open about calling it out.

Cohen is therefore right to declare:

Open-source code is generally great code, not requiring much support. So open-source companies that rely on support and service alone are not long for this world. The traditional open-source business model that relies solely on support and service revenue streams is failing to meet the expectations of investors.

So we need more efficient ways to monetize open source. Point taken. But customers aren't waiting. As E*Trade Financial Chief Scientist Lee Thompson tells BusinessWeek, the benefits of open source are too good to ignore, and go well beyond acquisition cost:

For some companies, the benefits of open source extend well beyond cost savings, to such areas as license management. "Your engineers spend less time on contract negotiation and more time on the technology, which is really what you want them to be doing," says E*Trade's Thompson.

... Read more

OrecX, whose open-source voice-recording technologyI wrote about a few months ago, on Tuesday announced a partnership with NICS, short for Network Integration & Consulting Services to provide simplified voice recording for utilities and public-safety organizations.

NICS has integrated OrecX technology into its RAVIN (Radio and Voice Interoperability Nest) product line to make call recording easier, and customers such as Pacific Gas and Electric are now touting the benefits.

This and other "unsexy" applications are what make the current wave of open source so exciting. Open source is making its way into nearly every area of software.

Take, for example, the trading floor of the Chicago Mercantile Exchange. Earlier this year, Cross Check Communications was commissioned to set up and maintain a system for checking and recording trading lines on the floor of the Chicago Board of Trade (CBOT). The purpose? Sometimes orders need to be reviewed for potential errors, so it's critical that voice-recording software be used.

In this case, Cross Check chose OrecX's Oreka TR to deliver an open-source multiple-line recording program that saves and categorizes recordings for easy retrieval from any computer. Most intriguingly from my business standpoint, according to Cross Check Communications president Catherine Oliven, CBOT saved "saved tens of thousands of dollars choosing Oreka TR over any other proprietary recording system," and it took very little time (just 11 days) to discover and implement the OrecX system.

That's the power of open source. Easy discovery. Facilitated implementation because customers can try before they buy, if needed. And much lower cost.

During a recent trip to Barcelona I opted to stay at a NH Hotel. Little did I know in choosing this safe, clean, and slightly hip business-oriented chain, my bias toward open source was showing through. As it turns out, NH Hoteles runs Red Hat Enterprise Linux, along with JBoss solutions. Funny, that.

However, much as I like to think that I'm supporting open source in my sleep, I find the reasons for NH Hoteles choice of open-source Red Hat more enlightening:

"After implementing Red Hat solutions, we benefited from a reliable technology infrastructure that was fault-tolerant, robust, supported by open technology and standards-based. The implementation of Red Hat solutions was a success and has exceeded the objectives we defined at the beginning of the project," said Ricardo Mardomingo, IT manager of NH Hoteles. "We experienced an impressive increase in system stability with improved platform availability that reached 100 percent after migration."

Due to the management capacity of the JBoss Enterprise Application Platform through JBoss Operations Network, NH Hoteles has also experienced greater control of its current architecture. The solution has provided ease-of-use and scalability, and has led the company to consider the suitability of implementing additional Red Hat solutions throughout the rest of its information systems.

Let's see: better performance, more control for the customer, and easier to use. Additionally, I'm willing to bet, though the case study doesn't discuss it in detail, that the Red Hat-based solutions also cost less than the proprietary alternatives NH Hoteles considered.

In a recessionary economy, CIOs must take a long, hard look at open-source solutions as NH Hoteles has. Better performance at lower cost sounds like a winning recipe for innovating and growing through a downturn. In other words, open source is a way for the CIO to turn IT into a profit center, rather than a cost center. That's called "job security" in this economy.

I've been pining lately for greater enterprise participation in open source, following the lead set by Red Hat CEO Jim Whitehurst, and so was excited to see the recent news that the Chicago Mercantile Exchange (CME) has joined the Linux Foundation. For CME, time is money, with a record 2.2 billion contracts in 2007 worth more than $1.2 quadrillion, all running on Linux (Red Hat Enterprise Linux, in this case).

But what does CME get from joining the Linux Foundation?

By joining the Linux Foundation, CME Group will be able to collaborate with key Linux developer and vendors. CME Group's Vinod Kutty, associate director and head of distributed computing R&D, will become chair of the Linux Foundation's End User Council. The Council is a group of the largest Linux end users who use the forum to collaborate and educate themselves on technical, legal and community efforts.

In other words, CME wants to be both a producer and a consumer of open-source software, and specifically Linux in this case. CME has been a longstanding user of Linux, deriving considerable value from Red Hat Enterprise Linux since at least 2004. Now it's time to start giving something back.

With over 9,000 employees and over $3 billion in annual revenue, Sabre Holdings is a customer worth having. It is, however, also a very demanding company: with websites Travelocity.com, Lastminute.com, and others, even a little downtime costs the company tens of millions of dollars.

It is therefore instructive that Sabre Holdings has decided to standardize on Red Hat Enterprise Linux, dumping the proprietary Unix systems it had been using. In case someone within your organization makes the suggestion that open source can't deliver best-in-class performance, you might want to refer them to this statement by Robert Wiseman, chief technology officer at Sabre Holdings:

While operating the largest travel distribution service in the world, we develop solutions that must withstand what is perhaps the highest sustainable volumes anywhere, peaking at 32,000 transactions per second, available 24x7, with five-nines uptime. It's always a peak business hour somewhere in the world....

[W]ith Red Hat we are able to build stronger and smarter systems with our global customers in mind....Compared to proprietary Unix/RISC solutions, our testing has shown that Red Hat Enterprise Linux on Intel performs three times faster at a fraction of the cost.

This is serious performance, and the most compelling statement I've seen to date that attests to the power of open source, and particularly Red Hat Enterprise Linux. I'm betting that Red Hat will be much more grateful for the few million it likely received from Sabre than it would be for $100 million from Microsoft. ;-)

For the U.S. federal government, it's no longer a question of "if" when it comes to open source, a Federal Computer Week article notes, but "how much" and "which projects."

Government officials who support open source now find they have a new decision to make: whether to use one of the growing number of open-source packages that could handle higher-profile agency operations, such as business intelligence analysis, content management or customer relationship management (CRM), to name a few.

I know from personal experience that there are very few federal organizations that are not already using open-source applications or are evaluating them. Recent survey data suggests that at least 55 percent of U.S. federal agencies are using open source now. I suspect the number is actually much higher. The genie is out of the bottle.

The reason is clear. As the article states, the two primary drivers of open-source adoption are "lower upfront cost and a greater ability to customize." More flexibility. Less cost. It's a perfect combination.

I spent my lunch today in Buenos Aires with Red Hat's general manager of South America, which I'll report on tomorrow. Meanwhile, on the other side of the planet, Red Hat announced a cool deal with Munich Airport, thrice-named "Airport of the Year" in Europe.

Why? Because Unix couldn't deliver the performance that Munich Airport needed, so the organization went with Red Hat Enterprise Linux to "provide both the savings and performance benefits desired." Thirty servers and 40 desktops later, Munich Airport is running smoothly and at lower cost than before.

While this may not sound like a lot of servers and desktops, it's important to remember their purpose: keep air and ground traffic running efficiently and productively. In other words, it's true mission-critical deployment, however small.