President Obama is gathering 100 leaders from across the U.S. for his jobs summit in Washington on Thursday to brainstorm how to create new jobs.
While the list of invitees is heavy on academics, labor unions, and business, it appears only two people from technology made an early invitation list: Eric Schmidt, CEO of Google, and Jim Whitehurst, CEO of Red Hat.
FedEx. Yes. Nucor. Yes. But no Microsoft. No Oracle. No Salesforce.com. What gives?
Yes, Schmidt is a key advisor to Obama. But his invitation, along with Whitehurst's, could have a lot to do with the fact that Google and Red Hat, unlike many of their peers, are actively hiring.
Red Hat and Google have thrived through the recession, perhaps suggesting that they have a clue as to what it will take to create new jobs in a tough economy, one that has seen 23 straight months of job losses.
Intriguingly, Google's hiring may be crimped more by a desire not to aggregate all of the best and brightest than an inability to do so, as evinced by Google Vice President Bradley Horowitz's comments at Supernova this week.
When I asked Whitehurst on Wednesday what he thought the two companies had in common, he was quick to respond: "open source."
It's an interesting observation. While the two companies use open source in different ways, their business models are actually more similar than different, and both depend on open source.
As I've written, both Google and Red Hat (along with Facebook and other new-school "software" companies) depend upon and help to create abundance--of code, of Web sites, of information--and then make money by filtering that abundance.
It's a model that works, and it's a model that heavily depends upon and contributes to open-source software.
It would be going too far to suggest that open source is the critical component of any successful technology business today, especially as just about every company now includes it in their offerings in some way. Plus, CIOs have discovered other ways to stretch IT budgets and keep their workers on the payroll, as Gartner advises.
But the mentality of open source--more with less, sharing code and expertise--does seem to be a hallmark of successful technology companies, and particularly at Google and Red Hat.
SAN FRANCISCO--A bad economy is good for open source, declared Red Hat CEO Jim Whitehurst in his keynote at Open Source Business Conference 2009, but open source's value proposition should play well in any economy.
Jim Whitehurst @ OSBC2009
(Credit: Matt Asay/CNET)At OSBC 2008, Whitehurst suggested that enterprise IT needs to join the open-source conversation, contributing code back to derive greater benefit than mere consumption of open source can offer.
This year, Whitehurst moved beyond this meme to focus on why enterprises should buy open source in the first place, never mind contribute open-source code.
Whitehurst pilloried the traditional proprietary sales model, a theme the Red Hat team has raised before, which basically forces customers to re-buy the same software over and over again through pricey maintenance contracts. Open-source models like Red Hat's differ in that they depend on continuous delivery of value to the customer: if the customer doesn't like what Red Hat provides through its subscription service, they cut the subscription.
For this reason, Whitehurst noted, "Red Hat's biggest competition is not Microsoft or Novell. Our biggest competition is customers not renewing and continuing to use our software without a subscription."
Bad economic times prod people to change. Fortunately for the open-source world, that change favors its adoption and proliferation as enterprise IT seeks to cut costs while ensuring superior performance and equivalent or better functionality. Red Hat, for its part, "is hearing from CIOs that before wouldn't return our calls, but now are asking 'to sit down and work something out with Red Hat'."
Open source, said Whitehurst, conditions customers to expect more for less, and disciplines vendors to deliver it. Open source does not provide an easy business model, but it does enable various business models that align customers' interests with vendors', which proves to be a winning combination in a recession.
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Forbes recently ran an article detailing the difficulties of institutional involvement in open-source projects, ultimately concluding that:
The enlightened self-interest that causes individuals to send back bug fixes, contribute ideas for new features and write documentation is much harder to find in institutions.
On Thursday, The Washington Times and Mises.org rose to the challenge and announced significant open-source contributions or new projects.
In the case of The Washington Times, it released several enhancements to the Django open-source content management project. Mises.org, a liberterian research and educational center, decided to go one step further and open source its entire website: "all the books, all the media, all the journals, all the source code, and the complete database behind mises.org."
Red Hat CEO Jim Whitehurst has called for more enterprises to contribute back to open-source projects to boost efficiency and productivity for themselves and others. It's good to see The Washington Times and Mises.org answering the call. Who will be next?
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I don't have any scientific proof of this, but it strikes me that open-source CEOs are different. Not just because some sport ponytails (Sun CEO Jonathan Schwartz), or some speak with a light Southern drawl (Red Hat CEO Jim Whitehurst), or even that some swear in Italian (Funambol CEO Fabrizio Capobianco).
No, what really makes them different, at least as compared to their enterprise software counterparts, is their cutting-edge adoption of technology.
In this they're no different (and probably a bit behind) the Web 2.0 crowd, but compared to an HP, IBM, or SAP CEO, the CEOs of open-source companies set new standards for connectedness and communication transparency. Perhaps it's the relative youth of open-source CEOs, but perhaps it's also a love of technology that stems from having to live so close to source code in an open-source company.
I first thought of this when I received notice that Whitehurst is following me on Twitter. I can't imagine Steve Ballmer following anyone on Twitter. Then I thought to how actively Schwartz blogs, providing useful information on Sun and its place in the larger enterprise computing ecosystem.
It also reminded me that I get text messages as often as emails from Whitehurst, and the same used to be true of Marten Mickos, former CEO of MySQL, as well as others (except Capobianco at Funambol, because his company does email sync, so he's not a big SMS user :-).
Enterprises should take note. I think company leadership has a material impact on the kind of technology that gets created within a technology vendor. If your vendor's CEO is stuck in the Stone Ages of technology, perhaps its products are, too?
This can only be taken so far, of course, but I wonder if there's something to it....
Now that open source has become standard fare for enterprises, it's time for them to get smart about open-source implementations. Baseline magazine picks out six technologies that haven't lived up to their hype, including software-oriented architecture and software as a service, but open source, with an enterprise penetration rate of 85 percent that is rising, according to Gartner, is probably underhyped, given its ability to drive down costs and boost innovation.
But that doesn't mean that an enterprise should deploy open source without proper planning. To facilitate such planning, Baseline has identified 10 strategies for facilitating the success of an open-source implementation.
Most of the tips also apply to proprietary software deployments (e.g., "maintain separate environments for testing and production"), but a few are specific to open source. One such principle is the importance of community involvement:
The corollary to this--"work with open-source project leaders when changing the code"--also makes Baseline's list, and would go a long way toward ensuring that enterprise adoption of open source reaches maximum efficiency. Instead of thousands of enterprises modifying open-source projects in isolation, contributing back code and getting involved in the relevant communities would help enterprises to coordinate and pool resources across industries.
The potential gains in productivity and software improvements could be enormous, which is one reason Red Hat CEO Jim Whitehurst has called for greater enterprise involvement in open-source communities. Sure, the lawyers think that it's going to be tough, but the payoff is worth it.
As the former COO at Delta Air Lines during its bankruptcy proceedings, Red Hat CEO Jim Whitehurst knows something about making tough choices in the executive chair. His voice is worth hearing as we continue to swim through one of the worst economic economic crises in the history of the United States.
In an interview with the E-Commerce Times, Whitehurst outlines a few of his guiding management principles, but one struck me as particularly useful in understanding where Red Hat's product strategy could be going:
The key to steering a company past difficult obstacles is to focus on a few initiatives. "A key lesson, that I think is really important and really hard for business leaders to do, is to prioritize and pick two or three things and knock the cover off the ball. You see it over and over and over again where companies try to do too much."
I read this to suggest that it's unlikely Red Hat is going to be straying too far from its infrastructure roots in the near term. While the company has been experimenting with various programs for engaging the open-source ISV community like RHX, it's unlikely that Red Hat itself will be entering the application fray in earnest anytime soon. With JBoss significantly outpacing RHEL sales, perhaps this will change, but not during the downturn.
For the foreseeable future, watch for Red Hat to double down on its existing investments and, once those carry it through this recession, turn up the heat on its competition by aggressively moving beyond core infrastructure offerings.
Red Hat CEO Jim Whitehurst has been talking for the past year about how a vast, largely unexplored repository of great software is the enterprise, and how much value could be unlocked by open-sourcing it.
Open source creates better software, Whitehurst argues, so why not expand its value by expanding its community?
The Massachusetts Institute of Technology apparently has heard the call, opting to open-source its Mobile Web project, as reported by ReadWriteWeb. The code "offers a staff and student directory, a campus map, the shuttle schedule, an event calendar, class announcements for students, emergency information, and status updates for many of MIT's tech services."
In other words, it offers much the same functionality that every university would likely want to provide its students and faculty. Because MIT has open-sourced the code, there's the potential for a community of universities to co-develop the project further, reducing MIT's support burden for its code and enriching the code base.
It's perhaps not surprising that MIT, which has won awards for its open-source innovations in the past, is the institution behind the open-source Mobile Web project. What is surprising is that so many universities and enterprises persist in reinventing the wheel, dumping resources into writing software that is common across their market segments that could more efficiently be created or maintained by a community.
Time to follow MIT's lead. Time to embrace open source and its efficiencies.
Red Hat CEO Jim Whitehurst was in India recently and gave an informative interview to CyberMedia News. In the interview Whitehurst addresses a range of topics--Microsoft's involvement in ODF, Red Hat's product plans for 2008 and 2009, etc.--but it was his analysis of Red Hat's business model that I found particularly engaging.
I have always believed Red Hat's value resides in its ability to deliver certified, stable binaries out of a morass of complex, ever-moving open-source software. But Whitehurst gives a different perspective:
... Read moreHow to make money (in open source)? A lot of people started with the support model...What Red Hat did was fundamentally different...It's not about trying to monetize the bits or the services. Everybody can do that. The key insight is that the development model of open source is around iteration.
Now if NYSE, for instance, has mission critical software running on (open source), the last thing they want is an iterative change impact. Here, we come in and make sure that (open source) is consumable by the enterprise, and is fully QA-strong, fully tested, performance-tuned, certified, equipped with documentation, SLAs, localization aspects, iterative change development, everything. We are the people who do that and ensure stable tested bits on mission-critical deployments. Besides we commit to support it for seven years. It's not just the support but we make it bulletproof.
It's all about how much can you match the pace of iterative integration and make it consumable for the enterprise. Enterprise-class software is not about functionality alone but about change in tandem in a production environment. It's very hard to dynamically change specs, maintain hardware piles, software piles, compatibility, and certifications. If you talk of us, we have monetized not on the OS but on the value it has.
Jim, where are you when we need you?
"Jim," of course, is Jim Whitehurst, CEO of Red Hat. The need? To get more enterprises contributing back to open source. Forrester has found that--Surprise! Surprise!--most enterprises consume open source but don't contribute back to it.
This isn't surprising, nor are the reasons and means of adoption:
"...[O]pen source adoption initially focused on the operating system and Web server tiers of the application platform stack, but early success widened the focus to include development tools, infrastructure components such as application servers and databases, and higher-level components such as portal servers and content management systems."
Lower cost was the main driver for open source deployments with delegates questioned by Forrester highlighting that the cost-based business case was easier to show for lower-level commodity middleware components.
Cost is a primary driver of open-source adoption, and for good reason. For example, Activision recently noted in a Webinar that it had saved "tens of millions of dollars" by going with Alfresco for its Web content management needs, while simultaneously driving innovation and flexibility.
That's great. But there is still the ominous note in the article above that support alone doth not a billion-dollar software company make. What happens in subsequent years when the cost savings have been realized but the enterprise is self-sufficient?
... Read moreRed Hat's Jim Whitehurst pounded the pulpit this week about the need to expand open source into the largest software developer market on the planet: The enterprise. Oracle, Microsoft, et al. write lots of software, but their contributions to the software world are infinitesimal compared with the development done at real software shops like Morgan Stanley, Pfizer, etc.
Whitehurst said:
The vast majority of software written today is written in enterprise and not for resale. And the vast majority of that is never actually used. The waste in IT software development is extraordinary....Ultimately, for open source to provide value to all of our customers worldwide, we need to get our customers not only as users of open source products but truly engaged in open source and taking part in the development community.
Exactly. Jim knows what he's talking about: He comes from the enterprise world, having served as COO of Delta Airlines for several years. If Red Hat can become the hub to that development world, it will dominate the market...in a positive way.
All of which made this email I received from the head of public relations at a large enterprise so intriguing:
... Read more
