For all the billions enterprises spend on IT each year, they arguably get far inferior software than Facebook, Twitter, Google, and other consumer Web companies make available for free. In part, the consumer Web can deliver exceptional value for so little because it piggybacks on the expensive infrastructure built by others.
Is it time for enterprise software to "pull a Google" and build solutions on the consumer Web?
Your new Enterprise Content Management/Collaboration system?
For those who think there must be some trade-off in software quality when brown-bagging with the consumer Web instead of using white-glove dining with expensive SAP or Oracle, they're right. There is.
But the trade-off favors consumer-facing applications, as Alfresco CTO and co-founder (and my colleague) John Newton highlights:
The whole idea of enterprise software in the 21st century seems anachronistic. The term enterprise really only took hold in the 90s in order to describe systems that were able to scale beyond the department. It meant big, powerful, flexible, but it also meant big, clunky, and expensive.
As Web 2.0 sites with their cheap (read free), simple, but scalable platforms scaled to millions of users in a matter of months, the whole idea of only being able to support thousands of users and take years to implement became ludicrous. Being enterprise--meaning you can support your heavyweight infrastructure of other enterprise parts--also seems less interesting when you consider that the largest databases on the planet run on MySQL using a concept called "Sharding."
Sure, there are problems with the consumer Web. ZDNet, for example, points out that Twitter's security model isn't fully formed yet, and could introduce security breaches into enterprise software that leverages it.
But let's not kid ourselves that enterprises aren't already at risk--and, perhaps, equally at risk--from the "secure, enterprise-grade" software they shell out thousands or millions of dollars for every year.
And let's also not pretend that enterprise workers are going to ignore the sleek, highly usable consumer Web in favor of the clunky systems IT foists upon them. They're not.
Nor should they. I already find myself communicating with colleagues, customers, and partners over Facebook and Twitter, and I imagine you are, too. It's simply more efficient that way.
Rather than fight this, IBM et al. should build applications on top of the consumer Web. Or maybe a security overlay is all that's needed. Something that secures the communication endpoints while leaving employees free to interact with their peers at other companies using the consumer Web.
Novell is doing this with its Pulse service for Google Wave, a testament to just how innovative software can be when it isn't locked behind a firewall by IT. Others should follow suit, and not create clones of the consumer Web as Tibco has with its Twitter clone, Tibbr.
Web 2.0 Journal notes six megatrends affecting enterprise IT, including now-familiar themes like open-source development and cloud computing. The consumer Web should be there, too. It may well be the future of enterprise software. And perhaps it should be.
Whether you're an open-source advocate or not, you likely run open-source applications on your laptop or desktop. From Firefox to VLC to Handbrake to Adium, some of the best applications for Mac OS X, Windows, and Linux are open source.
The iPhone, however, is a relative wasteland for open source. Should Apple care?
There's no open-source app for that.
OStatic points to four good open-source applications currently available for the iPhone, including Funambol for sync functionality and WordPress for blogging, but these are the exception to the rule. A Google search turns up others, but few that match the quality of open-source applications available on the "desktop."
Why?
It can't be a question of open-source developers shrinking from the proprietary iPhone platform. Much of the best open-source application development already happens on proprietary platforms like Mac OS X and Windows.
It's also not a question of understanding: O'Reilly and others walk open-source developers through iPhone application development.
Even so, it could well be that open-source developers have resisted the closed nature of the iPhone development and distribution process. In this, they wouldn't be alone.
First, you need a Mac to write iPhone applications. While the open-source crowd has embraced the Mac, many developers won't want to leave their Windows or Linux machines. (XMLVM could offer an alternative, as well as enabling developers to write iPhone applications in languages more familiar to them, like Java, instead of Objective C.)
Beyond hardware and programming languages, there's still the burden of running the gauntlet of Apple's application approval process. Open-source development has tended to provide unfettered playgrounds for development like SourceForge and Google Code. iPhone development is anything but unfettered.
Yes, Apple opened the door a crack to open source when it stopped requiring an NDA for development, but the door must be opened wider.
Otherwise it stands to miss out on applications like VLC, the open-source media player (which actually wouldn't likely be approved by Apple due to its competitive nature with Apple's native iPhone media player).
You can get a fork of VLC (called VLC4iPhone), but not through the official Apple App Store, and only if you jailbreak your iPhone. Few mainstream users will choose this route to install applications.
Even fewer open-source developers will go this circuitous route to lead them there, as hinted by noted open-source luminary Doc Searls, which leaves the official App Store largely bereft of open-source applications. This is Apple's loss, and it is a loss to the general public.
Apple's iPhone browser is great, but we'd be better off if mobile Firefox gave it some competition, just as it has on the "desktop." Fring is nice, but I'd much rather have Adium running on my iPhone. And so on.
Open-source development could provide needed competition to the mostly proprietary applications that dominate the App Store. It also could supply fresh innovation.
CNET has reported that iPhone users and Google Android users have much in common in terms of their usage patterns and demographics. Their developer audiences, however, are increasingly different, and that's to Apple's hurt, especially as Android grows in market share.
Android, after all, stands to scoop up a significant swath of mainstream users by attracting both proprietary and open-source application development, while Apple's iPhone predominately serves the proprietary software set. That's the bulk of the market, to be sure, but it stifles the experimentation and innovation that open-source developers could be bringing to Apple's iconic iPhone.
Does Apple care?
Follow me on Twitter @mjasay.
Most entrepreneurs are lucky to sell one start-up. A chosen few manage to repeat the feat, building and selling two or more businesses. The folks at Zimbra have outdone them all, selling the same company...twice.
As Kara Swisher of All Things Digital reports, VMware is expected to soon announce the acquisition of open-source messaging company Zimbra from Yahoo. My own sources at VMware confirm the deal.
While Swisher's report gets the Zimbra ownership change correct, its indication of a distressed asset sale misses the mark.
It's true that Yahoo has never known what to do with Zimbra, leading it to shop the Zimbra business to various potential buyers, including Red Hat and Cisco Systems. But this is a reflection of Yahoo figuring out that it doesn't have a future in the enterprise, a place that Zimbra is increasingly calling home, after early success with Internet service providers such as Comcast.
You do the math.
(Credit: Matt Asay)Zimbra has delivered 100 percent subscriber growth, along with roughly 100 percent sales growth, according to sources close to Zimbra, through the worst economic meltdown since the Great Depression, much of that growth driven by sales to marquee enterprise customers such as Bechtel.
In other words, Zimbra is a growth asset, though the price paid by VMware is almost certainly lower than the $350 million paid by Yahoo in 2006. That's just the nature of valuing an asset carve-out versus a standalone company pre-recession.
Even so, Zimbra can be a highly strategic asset for VMware. It's not surprising that the virtualization specialist would be interested in Zimbra, especially as it seeks to differentiate its cloud offerings.
Last week, I wrote that an "application war is brewing in the cloud," a war that VMware, more than any other company, is set to launch with its acquisition of Zimbra. Infrastructure isn't enough of a competitive differentiator, especially since most applications aren't designed to run well in the cloud.
Customers, and particularly hosting and service providers, are therefore looking to their infrastructure vendors like VMware to sort out applications for them, or at least give them a head start.
This is where Zimbra comes in. The company's technology was designed from the start as a cloud application, and it should give VMware a viable contender to Microsoft Exchange to offer hosting and service providers, rather than having to peddle applications from cloud competitors like Microsoft and IBM.
With SpringSource, Hyperic, and its adoption of Linux, VMware was already increasingly the open alternative to the closed cloud offerings from Microsoft, IBM, and others. Now, with Zimbra, it is adding its ability to compete at the application level, while retaining its open-source approach.
It's a smart, bold approach. Ironically, it's also an indication that the first shot fired in cloud computing's infrastructure war looks an awful lot like an application.
Technology that requires a manual is technology that doesn't get used. At least, where mainstream users are concerned in the consumer and enterprise software markets. One of the lessons of the last 30 years of computing, and particularly in the rise of the consumer Web, is that ease-of-use trumps deep functionality most of the time.
The masses may be asses, but that's where the money is
They're easy. They're intuitive. They solve real problems for real people. And all without a single manual.
Can open source also deliver this kind of mindless (and productive) ease of use?
It's not a question of documentation. Documentation for many open-source projects is chronically weak, but then, most documentation for most software is pretty weak. It's not just an open-source problem.
It also doesn't matter that you and I find a given open-source project supereasy to use. The only thing that matters is what mainstream end-users think, because they're the ones who create meaningful markets.
The kind that adds up to billions in sales.
Good technology spreads virally, as Matrix Partners David Skok points out. It depends on users being able to adopt technology without really having to think about it, and then tell their friends.
It doesn't spread because of all the great things that technology could do...if only the user could figure it out. Gartner's Jeffrey Mann rails against "vendors [who] confus[e] 'You can use it to do that' with 'We designed it to do that'," and open-source advocates are guiltier of this than most.
It's not what the software can do. It's what it does. For normal people. Without training or user manuals.
The open-source world, but particularly the Linux 'desktop' crowd, attempts an end-run around this argument by pointing to some grandma, somewhere, who runs (or should run) Linux (or some other open-source project).
But this is the wrong sort of argument, and precisely the wrong way to attract mainstream users. Facebook is its own argument: it's immediately clear what it's for and how to use it. Google is the same. TiVo? Ditto. And so on.
Most people don't have any agenda for choosing technology other than a) it's easy and b) it lets me communicate/work with all their friends and family.
Such software just needs to work. With minimal or little training and no ideological motivation. At all.
Can open source deliver this sort of experience? Yes, but it doesn't happen nearly enough. Commercial open-source projects like MindTouch go a long way toward making enterprise technology easy to use, while community-led open-source projects like Handbrake and Adium make open source supereasy for consumers.
These are the exceptions, unfortunately, not the rule.
We need more efforts like Canonical's Ubuntu, which is placing a heavy emphasis on design. Every open-source project should have a UI designer involved. The focus of every project should be to be able to run with minimal or no prior training.
Even the ubertechnical projects focused on developers. If Microsoft teaches us anything, it's that there are far more "average" developers/IT administrators/architects/etc. than rock stars, and such people benefit from a nice UI rather than a nice command line.
It's time to get out of the weeds of open-source development to equally focus on the end-user experience. Open-source can do this, but it must become a priority.
Canonical, creator of the Ubuntu Linux distribution, has taken its share of criticism for not being innovative enough for some in the Linux community. In 2010, however, Canonical's focus on design and packaging will come to be seen as a seriously shrewd strategy as it helps to take Linux to the masses.
The reason? The innovation that pays is changing, and UI matters more and more.
When we think of innovation, we normally think of traditional research and development (R&D), complete with a white-coated scientist or pizza-gobbling engineer.
As Apple, Google, and other highly successful software companies demonstrate, however, today's innovation opportunities may lie more in user interface than traditional R&D. Google's emissary to the start-up world, Don Dodge, hints at this in a discussion of the various email systems he has used:
[O]ver my career, my first email thing was Vax Mail, which was awesome at the time, it was revolutionary. I went from Vax Mail, to Outlook, to Lotus Notes when I was working for Ray Ozzie, then back to Outlook again, and now Gmail. Email is a pretty straightforward application. They have basically the same features, it's all a question of user interface.
Sure, there are differences under the hood between Google's Gmail and Microsoft's Outlook, but the innovation that matters most today may well be the "superficial" e-mail experience that these different systems offer.
Back to Canonical and Ubuntu.
Canonical's founder, Mark Shuttleworth, understands that innovation is shifting from core research to the user experience, as he's opined on his blog. He has set his sights high, not content to replicate the Windows PC or Mac experience, for example, but has instead insisted on surpassing it.
The money for Canonical is in packaging open-source technology, not necessarily in creating the technology in the first place. The Linux world should be grateful, given Red Hat's and Novell's focus on the data center.
Linux benefits when mainstream users buy into it. Or, rather, when they use it without thinking about "it."
No one cares that their TiVo devices runs Linux. It just does. No one cares that the Kindle runs Linux, either. They care about the functionality these devices deliver. That's the way it should be.
Canonical's opportunity is to make Linux so easy that it becomes completely invisible to the end user. And Canonical may well be the best positioned to do this, among its open-source peers.
Neither Red Hat nor Novell employs an executive to focus on consumer products. Canonical does. No other open-source company has had its CEO discard the executive mantle to "focus [his] Canonical energy on product design," as Canonical recently did.
Hence, perhaps no other open-source vendor is better positioned to capitalize on the rising (and changing) Netbook market or other open-source friendly consumer markets.
Red Hat dominates the enterprise Linux market. Let it.
Canonical could well be set to dominate the consumer Linux market, a potentially massive market that demands a single-minded focus on design. It's a big bet, but one that Shuttleworth is committed to making.
Open source has long been an important development methodology. The biggest surprise of 2009, however, was just how quickly it took center stage as a business strategy in the larger software economy.
The secret is out: open source is big business.
It's not as if open source as a business strategy is anything new. After all, the industry has been chattering about the business benefits of open source for nearly 10 years.
But not on Google scale. And not with the cachet and brand of Google blessing the idea. Despite the impressive sales and profits that Red Hat and other traditional open-source companies consistently deliver, the industry needed Google to take open source out of the realm of geekdom and into the boardroom.
Even Google needed Google. The Mountain View software and advertising giant has been involved with open source for years, running its Summer of Code and hiring up the best and brightest open-source developers, like Guido van Rossum and Greg Stein.
In 2008, however, Google stopped treating open source like a cute science project and source of cheap raw materials to power its search business, and instead started to actively court developers.
Open source stopped being a sideshow for Google and instead became the main event.
The developers were needed to create a groundswell of support for Google products like Android, and to dismantle the house that Bill Gates and Steve Ballmer built.
It's working. In fact, I suspect it's working far better than even Google suspected it would. It's certainly working at a scale that I never imagined we'd see in 2009.
All of which makes me think that 2010 will be the year that the rest of the industry follows Google's lead and starts to use open source as a fundamental business strategy, and not simply a plaything to placate "the community."
So, instead of Microsoft experimenting with fringe products like its open-source CMS Oxite, perhaps we'll see Microsoft open source an ad server (or acquire OpenX?) in an attempt to open-source Google's core, just as Google has been opening up Android, Chrome OS, and other products that undermine Microsoft's profit centers.
Perhaps we'll see SAP open-source software that kidney punches Oracle, while Oracle finally gets its way with MySQL and uses it to sucker-punch Microsoft's SQL Server.
And so on.
The big surprise of 2009 was how open source stepped up its game to become Google's primary business strategy, and not simply a sideshow developer strategy. The big news of 2010 will be how quickly other technology vendors will follow its lead, making 2010 the year of mountains of new, open-source code...and a hugely entertaining spectacle.
2010 is promising to be a big year for technology IPOs, but will open source join the party? Probably not. Not yet, anyway.
Noted finance blogger Paul Kedrosky speculates that "it may start with Twitter, or Facebook, or Zynga (or even Yelp), but an IPO wave is coming and all it requires is a Netscape moment."
While I (along with Tom Foremski) believe there's more IPO smoke than fire, it does feel like we're due for a big year of technology IPOs. "Big" as in "more than the last few years."
I guess that would require just one. Or so.
But what about open source? It seems clear to me that we're entering a phase in commercial open source when the best businesses will grow, rather than explode into $300 million to $400 million acquisitions. (Yes, I'm weeping as I write this.)
Ingres CEO Roger Burkhardt disagrees. As he writes in Dr. Dobb's Journal, 2010 should see the IPO of a non-Linux open-source company:
The growth rates of certain open source companies has been impressive (50%+). We also believe a few have crossed the Wall Street friendly $50 million in run rate Billings barrier. The investment community is itching for new ideas and open source has been a theme (along with cloud computing) that resonates well with investors due to its highly visible model. The open source Enterprise Content Management (ECM) space has been hot and we would not be surprised to see an IPO candidate emerge from that area in 2010.
I don't think so. I don't believe we'll see an open source IPO until a company crosses the $100 million threshold, and we're simply not there yet. Growth rates are great. SugarCRM, a company I advise, is promising 100 percent growth in 2010. But profitability and long-term proof of company viability, as measured by revenue, is what will sell to institutional investors.
Hence, I can't see a still-skittish Wall Street buying into an open-source IPO in the absence of the psychologically pleasing $100 million revenue figure.
Once we get an open-source company in that frame, I think we'll see a real boom of open-source IPOs. With the cost of IT project failure estimated at $6.2 billion, and open source serving up a great remedy, the conditions are right for the market to embrace open source.
Once that embrace translates into $100 million in revenue, we'll see Wall Street embrace open source again, too.
Lost in the flutter over Google's hymn to openness is an intriguing factoid on open-source licensing:
Though many of the programs hosted on Google Code are licensed under the GNU General Public License (GPL), when Google wants to open-source its software, it turns to the Apache Software License version 2.0.
Why?
Google's Jonathan Rosenberg elucidates:
When we open source our code we use standard, open Apache 2.0 licensing, which means we don't control the code. Others can take our open source code, modify it, close it up and ship it as their own. Android is a classic example of this....
Control. Apache is a signal that a company is prepared to fully remove its hands from a software project's steering wheel. The GNU General Public License (GPL), a more widely used open-source license, tells a different story.
Glyn Moody correctly articulates that "the GNU GPL gives a disproportionate advantage to the company that owns the copyright." Bingo.
In fact, as I wrote back in 2006, the GPL is the closest thing to traditional copyright ever devised in open-source licensing:
Please keep in mind that the supposed paragon of software freedom [GPL] is also the license that most tightly imposes a distinct lack of freedom on downstream users. If you're a capitalist like me, you probably like this fact. But if you're a software developer...?
Google, at the top of its game (and with its profits firmly secured by a very proprietary revenue stream), doesn't need to constrain its development community with the GPL. Indeed, doing so would be counterproductive, given the persistent privacy concerns that hover over its every action.
Google needs to demonstrate a lack of control. Apache helps it do so.
This shouldn't be underestimated. Microsoft, having lived on the regulator's rack for so long, may be anxious to ensure Google gets to know U.S. and European regulators, too. Apache licensing could help.
Apache licensing is one of the cards played by MySQL co-founder Monty Widenius with European regulators recently: Apache puts original developers and downstream developers on equal footing, so why not keep Oracle from snuffing out MySQL's life by relicensing it under Apache instead of the GPL?
It was a jaundiced card for Widenius to play, but it would be a decent card for Google to play against claims that it's too dominant. (Competition is "just a click (or a fork) away....)
Rosenberg writes that because of Google's open-source licensing, "others can use our software as a base for their own products if we fail to innovate adequately." True. Google is clearly betting on its ability to innovate fast, which is incidentally also the very thing that makes the prospect of seeing its code forked so remote.
Even if competitors are technically and legally capable of taking Google's code and using it to create competing products, the truth is that it's very hard to fork fast-moving code, especially if you're not an active contributor to that code. Google understands this. It's the savviest open-source company around.
Someone needs to let the folks in Raleigh know we're in a down economy still. While much of the tech market lingers in the doldrums, Red Hat announced another strong earnings report for its fiscal third quarter 2010.
Here are some of the headline numbers:
- Revenue of $194 million, an 18 percent increase year-over-year.
- Subscription revenue topped $164 million, up 21 percent year-over-year (and 85 percent of the company's revenue).
- Deferred revenue climbed 23 percent year-over-year to hit $619 million.
- All 25 accounts up for renewal in the quarter renewed, and at 120 percent of value.
Small wonder, then, that the company elected to repurchase 1.9 million shares of common stock for $52.3 million.
While Red Hat's revenue growth rate has been sliding for some time, as The 451 Group has detailed, Red Hat's prospects remain bright. Piper Jaffray, for example, recently highlighted a range of factors contributing to its "Overweight" rating on Red Hat's stock:
Recent conversations with 40 Red Hat industry contacts point to an improved operating environment, an ongoing acceleration in the pace of Unix-to-Linux migrations, and Q3 results essentially inline with plan. We continue to see longer term catalysts for outperformance based upon the recently introduced virtualization products (RHEV), upsell to the premium priced Advanced Platform, adoption of cloud computing, and broadening awareness of open source offerings
In my own conversations with Red Hat executives, it's clear that the company has plenty of headroom in both its JBoss business (8 of the top 25 deals in the quarter included a JBoss component, and Red Hat CFO Charlie Peters said that it continues to grow faster than Red Hat's core RHEL business), but particularly in its virtualization strategy. Virtualization is effectively a way for Red Hat to sell much more deeply into existing accounts. Much deeper.
But Red Hat is also seeing traction in its nascent cloud-computing initiative. In the third quarter, Red Hat saw a major movie studio building a private cloud with its technology in addition to NTT choosing Red Hat for its cloud infrastructure, plus the signing of a six-figure Red Hat Enterprise Linux-based cloud deal.
Clearly, there is gold in the Linux hills for Red Hat, gold that doesn't seem to be running out, especially as Red Hat improves its ability to get free-riders (CentOS and unpaid RHEL users) to pay, as it did this quarter with two sizable "free-to-paid" deals. The only negative in Red Hat's quarter seems to be a back-loading of revenue, meaning that more deals closed at the end of the quarter than normal.
But Peters said that cash flow for the year would come in at the high end of his former guidance, so things remain on track.
In light of Red Hat's strong performance in its core Linux business, it's somewhat strange to see Novell reorganizing to emphasize its proprietary products instead of hitting hard on its still-solid Linux business.
But perhaps there's only room for one Linux vendor in the data center. Based on the last several years of Red Hat performance, that vendor appears to be Red Hat.
Ubuntu has led the Linux community's efforts to improve on form, not simply function, and thereby make the Linux experience as good or better than Mac OS X in terms of usability. Mark Shuttleworth, founder and CEO of Canonical, the company set up to shepherd development and commercialization of Ubuntu, is the heart of that effort.
Mark Shuttleworth, provocateur
(Credit: Matt Asay)From March next year, I'll focus my Canonical energy on product design, partnerships and customers. Those are the areas that I enjoy most and also the areas where I can best shape the impact we have on open source and the technology market.
Is this good or bad for Ubuntu? And what about Canonical?
Canonical is reportedly doing $30 million per year in sales, and is working on some significant projects that may establish it as the de facto Linux distribution for Netbooks, if it isn't already. (Ubuntu is arguably the community choice for personal computers.)
Even so, Linux still has a long way to go to match the user experience of Mac OS X, or even Windows. Shuttleworth has given me a sneak peak of his vision for where Ubuntu can go from a UI perspective.
I was blown away. This is a man who "gets it."
Even so, he and the Ubuntu community still have a ways to go to match Microsoft or Apple in user experience, and certainly in market share. To get there, Ubuntu needs Canonical, and Canonical needs Shuttleworth fixated on improving Ubuntu's user experience.
When I asked what his resignation as CEO means for Ubuntu, and his involvement with it, Shuttleworth responded:
I don't expect to be less visible, just have stronger management for the business units.
As reported by CNET and as reported on Canonical's corporate blog, Jane Silber, currently Canonical's COO, will replace Shuttleworth as CEO. A search for a new COO will commence in the first few months of 2010.
This, I believe, is an opportunity for Canonical to tighten its focus. While Shuttleworth suggests that Silber's appointment "doesn't mark a change of direction," perhaps it should. With over 300 employees and products that span mobile, Netbooks and other personal computers, cloud computing, enterprise servers, and more, Canonical has its fingers in a lot of pots.
It's possible that the operations-minded Silber may channel Ubuntu's ambition into a few products where Ubuntu can dominate.
When I asked her for comment, Silber indicated that the move is more evolutionary than revolutionary:
This move should not be read as a precursor to a paring back in markets or as a dramatic shift in strategy. We continue to be committed to making Ubuntu the best possible platform, and to ensuring that Canonical provides high quality engineering, online and professional services to Ubuntu partners and customers worldwide....
I will still bring an operations discipline to company, but I will assume more responsibility and authority for the overall performance of the company including, I expect, greater participation in executive level sales and business development.
That involvement--i.e., working with customers and hearing them demand focus and discipline--may well prod Silber to instigate the changes she initially has disavowed.
Red Hat is instructive. Though many of us would like to see it broaden its focus, the company remains rooted in the enterprise server and middleware markets. Canonical, in my view, should take a lesson from Red Hat and channel some of its energy into fewer markets, markets where it can thrive.
Regardless of what happens, stay tuned to see how Shuttleworth's design aesthetic, now set to overdrive, can impact the cozy duopolies in "desktop" (Apple and Microsoft), servers (Red Hat and Microsoft), and more. With more time to focus on what customers and partners want, Canonical and Ubuntu may be set to take a more commanding position in the market.
