The Open Road

Tim O'Reilly

(Credit: Dan Farber/CNET News)

Some of us take longer than others. Tim O'Reilly moved on years ago from talking about open-source licenses and instead focused on the importance of data to business success. In the open-source industry, we heard his words but clearly didn't understand them.

We kept selling software through our "awkward teenage years," even as Google, 37Signals, Facebook, and others gave it away.

Years later, as Google pays for mountains of open-source code by aggregating data and selling data-rich services, we're starting to grok O'Reilly's message. It's what makes companies like Path Intelligence so interesting.

Redmonk's Stephen O'Grady notes:

Much has been made of the lack of an obvious revenue model for properties like Twitter, and to a lesser extent, Facebook. But when looking at the organizations' balance sheets...it seems self-evident that the value of the data assets involved is seriously underreported...

The economic value being assigned to data helps to explain why, while being sympathetic to questions about Twitter business models, I've never been overwhelmingly concerned. Where the revenue model for the dot-com era "eyeballs" strategy was equal parts indistinct and aspirational, the Web 2.0 businesses are being built out in an era of customers increasingly predisposed to analytics and data driven decision making. In other words, there's a market for their most valuable asset.

As Microsoft's Windows, Office, Xbox, and SharePoint businesses demonstrate, the real money is in the platform business, which is, or which can be, a data business. The more businesses and developers that build upon your software, the more valuable that software becomes. Even systems like Twitter are being turned into platforms.

But how you build the platform is increasingly important. Microsoft is Platform 1.0. Open source is Platform 2.0. It's a more efficient way to build community around a core, which is why Google and other savvy companies increasingly turn to open source as a fundamental way to entice developers, which developers create more software which invites more adoption which yields more data...you get the picture.

It's also why I believe Google Android, in its platform battle with Apple's iPhone, will ultimately prevail, so long as it can work in peaceful coexistence with the developer community (which has not always been the case).

Unlike many open-source companies, however, Google et al. have the singular benefit that since their business is data, not software, they can shepherd open-source development without taking a heavy hand in community management. More open source leads to more adoption, which leads to more data, which leads to the Googles of the world being able to give away even more software for "less than free."

It's genius. And it's amazing that it took so many of us so long to heed the counsel O'Reilly offered years ago.

In sum, this isn't a suggestion that companies should forgo profits in exchange for mindless popularity contests, as 37Signals' Jason Fried rightly pillories.

Instead, it's a call to look for ways to fund open-source development with rich, data-driven businesses. Most open-source companies focus too much on software, and most Web 2.0 companies focus too much on data. It's the blend of the two that makes a company successful.

Just ask Google.

(As an end note, I think Gartner's Brian Prentice is on to something when he speculates that enterprise applications may increasingly be communally developed by IT end users, though perhaps coordinated by vendors. It's a very interesting prospect, one that will enable even more open-source development in an area where data may not fund it.)

In the cloud, no one cares about your software license. That is one of the most liberating--and frustrating--things about cloud computing.

Depending on your perspective, it either opens up computing or closes it off. Customers don't seem to care one way or another, happily shoveling data into cloud services like Google, Facebook, and others without (yet) wondering what will happen when they want to leave.

Cloud computing may just be the Hotel California of technology.

Google Trader

(Credit: Google)

I say this because even for companies, like Google, that articulate open-data policies, the cloud is still largely a one-way road into Web services, with closed data networks making it difficult to impossible to move data into competing services. Ever tried getting your Facebook data into, say, MySpace? Good luck with that. Social networks aren't very social with one other, as recently noted on the Autonomo.us mailing list.

For the freedom-inclined among us, this is cause for concern. For the capitalists, it's just like Software 1.0 all over again, with fat profits waiting to be had.

The great irony, of course, is that it's all built with open source.

In this cloud computing/Web 2.0 world, infrastructure needs to be cheap, flexible, and plentiful. Open source delivers all three.

Hence, we've seen companies like MySpace tripping all over themselves to open up parts of their platforms in order to make themselves more appealing to developers. As ReadWriteWeb wrote of Facebook back in 2007, however, such developer outreach has not opened up these Web platforms in the sense of providing useful off-ramps to services like Twitter, Digg, Facebook, etc. It has simply created more on-ramps.

Cue the nefarious Microsoft theme song.

Rather than wringing our hands over this, I think there's an opportunity to create amazing amounts of good (and wealth) in this open/closed Web. Frankly, the longer we're in this, the less it's going to matter whether the code is open or closed because, as Tim O'Reilly has been saying for years, data is the heart of the Web, and even open data isn't going to hurt a successful vendor's network effects.

Take Google Trader, an interesting new SMS application that helps people buy and sell goods through text messaging. As The Economist notes, however, one of Google Trader's most interesting applications is in helping to foster free markets in emerging economies:

Lastly there is Google Trader, a text-based system that matches buyers and sellers of agricultural produce and commodities. Sellers send a message to say where they are and what they have to offer, which will be available to potential buyers within 30km for seven days. Mr Makawa says his father used the service to look for a buyer for some pigs, which he sold to pay school fees. These services cost 110 shillings ($0.05) a time, the same as a standard text message, except for Google Trader, which costs double that. In their first five weeks the services received a total of more than 1m queries.

I'm not familiar with the economics of SMS, but I'm guessing that Google gets a cut of the messages its application generates. The more useful Google Trader becomes, the more SMS it generates, the more commissions Google collects.

For the entrepreneurs using Google's service, they could possibly care less whether Google Trader is open source, but Google might. Open the source (and the API to the service), and let a thousand add-on development projects bloom. The more useful and feature-rich the Trader application, the more SMS, the more...you get the picture.

Take me to Google, Earthling.

The key is to create an open Web platform, one into which a diverse array of mobile software services can tie. This is one reason Google is such an advocate for open source. Android and other projects bring more people to the Web, a Web that Google monetizes through proprietary services like AdWords.

The community is critical to building upon the platform, but the money is in control of the platform and provisioning of services therefrom.

Just ask Amazon.com. According to ZDNet, Amazon's Elastic Compute Cloud (EC2) service makes roughly $220 million per year. That's a lot of cash, and is a function of EC2 sitting at the heart of a growing developer community, one that builds upon Amazon's open APIs to the service.

Some companies like Cloudera and Red Hat will make piles of cash providing the infrastructure for this cloud-computing gold rush. But the biggest money of all will be those that can build platforms in the cloud, platforms that depend upon open source but which aren't open in the traditional open-source license sense of the word.

That traditional licensing world is dead. Open-source licensing has become an on-ramp to closed data services, hardly what its creators envisaged. In fact, proprietary cloud vendors are almost certainly going to become the biggest cheerleaders for open source, because it means more developers creating more on-ramps to the cloud.

Even if such providers create effective exits, it's unlikely that consumers and businesses will actively use them...

...just like in the Software 1.0 world.

Follow me on Twitter @mjasay.

Microsoft dominates enterprise IT and likely will for a long time. But the software giant is struggling to match the nimble pace of open source on the Web, a pace being set by Google and others.

As but one example, Microsoft's Internet Explorer lost market share to Mozilla Firefox in September. To compete effectively on the Web, Microsoft will have no choice but fight open-source fire with fire.

This isn't about a need to appease the proverbial "community." It's about broad-based development, low-cost distribution, and, frankly, revitalizing its brand with developers.

Google gets this. While Google has long embraced open source like Linux and MySQL to give it flexible, low-cost technology with which to scale out its operations, the company has dramatically increased its open-source developer outreach in the past two years. And while some companies dribble out open source at the edge of their operations, Google is releasing core software like Wave and Android for open-source communities to help develop and shape.

The result? A loud and loyal following. Google may not get much in the way of quality external contributions from these efforts (It's still too early to tell.) But the strategy is already paying for itself in terms of marketing, if nothing else.

Hence, while Microsoft's mobile software has stalled for years and recently dropped to 4 percent, according to CNET's report on recent AdMob data, Google Android jumped from 2 percent to 7 percent in just six months.

That's the power of community.

It's a community that Microsoft arguably has in the enterprise, but which it emphatically lacks on the Web. Facebook-style developers simply don't think of coding in Microsoft's .Net. They write LAMP applications. To match this, Microsoft is going to need to join the open-source party.

Microsoft is slowly getting the message. For example, the company has been optimizing Web technology like open-source PHP to run well on Windows. More interestingly, Microsoft's experimental Barrelfish multicore operating system has been released under a highly permissive BSD-style open-source license.

The use of a BSD-style license suggests Microsoft is serious about adoption of the project, and of generating trust with developers. Developers can take BSD-style code and do pretty much whatever they want with it, with no permission required and no oversight exercised by Microsoft. It's a great move.

Microsoft needs more of this.

The company recently saw its open-source chief leave Redmond for a Silicon Valley cloud start-up. Such movement, from Microsoft to cloud/Web-based computing, is well under way and something that Microsoft can only halt if it starts to play the same game as its competitors.

Microsoft CEO Steve Ballmer seems to think the key to competition is features (in IE8 and elsewhere). It's not. That's just a start.

The key is encouraging and harnessing the power of community. Microsoft, which has done this so effectively in the enterprise, needs to learn to do this on the Web, too, which is tantamount to saying that Microsoft must fully embrace open-source development.

No, it needn't release all of its software as open source. Google certainly doesn't and, until recently, neither did the open-source bellwether, Red Hat.

But Microsoft needs to be doing much more to embrace, without extinguishing, open source. Open source is the key to making money on the Web, and last time I checked, Microsoft still liked money.

Arguably Microsoft's biggest threat is its irrelevance to Web developers. Though the company dominates personal computing and is a major force in enterprise computing, it remains a distant also-ran to LAMP (Linux, Apache, MySQL, PHP/Python/Perl) development for the growing Web ecosystem. On Thursday Microsoft announced its WebsiteSpark program to build inroads with the Web crowd, but the program is unlikely to make a serious dent on LAMP's dominance.

The reason? There are some big strings attached.

Microsoft has gone after Web developers before, but products like Expressions haven't made much headway with Web developers, as The Seattle Times reports.

WebsiteSpark, following on the heels of successful student (DreamSpark) and start-up (BizSpark) technology seeding programs, will likely make more of a dent. Free, high-quality tools to Web developers, as TechCrunch suggests, are going to be a big win.

But it's not going to be enough.

The problem isn't one of cost. At least, not primarily. WebsiteSpark has that nailed. The program gives thousands of dollars of technology away for just $100 at the end of three years, and then two options ($999 per year for everything or a scaled down $199 per year option) that aren't much more expensive.

But this overlooks the larger issue: Microsoft constrains who can join the program (start-ups with fewer than 10 employees) and meters their growth after the three years. Open-source alternatives do neither.

No upfront cost...but what about the future?

The first constraint isn't a big deal. Many aspiring Googles have fewer than 10 employees, and will continue to be small through their first few years.

The second, however, is the killer. At the end of the three years, Microsoft doesn't require WebsiteSpark participants to buy anything, but if the start-up is successful, it faces big bills as it scales out its Microsoft technology. This wouldn't be a big problem if there were no free alternatives that offer equal or better performance. But there are.

Microsoft tries to spin the open-source LAMP alternative as disjointed, and further argues it is a more expensive development path, and even that Microsoft offers better Web performance than LAMP-based development.

But this isn't the way the Facebooks of the world see it. They view the open-source LAMP stack as the proven, scalable winner in Web development. Microsoft can't match that with a price tag.

LAMP gives Web developers control over their destiny, both in terms of source code (they can finely tune LAMP to fit their needs) and in terms of cost (they need not pay anyone to scale out). They may choose to pay someone like Red Hat or MySQL for a support subscription, but at scale, companies like Google simply don't. They have the expertise in-house to support themselves.

But that's at scale. The problem remains, however, for Microsoft, that many of those sub-10-employee shops are dreaming of being Google, not being a mom-and-pop shop forever. So, if they're seeing thousands of servers in their future, tying themselves to the Microsoft stack, with all the license fees associated with it, is going to look like a poor decision.

Most companies will fail. Most of the rest will remain small. Rationally, most of these small start-ups, then, should be content to get Microsoft's technology for a song, assuming they don't care about the flexibility that comes from LAMP.

The other side is that with open source--which many of these Web developers will have picked up while at school or just on their own--there are no barriers to how the developer wants to use the software. Ultimately, Microsoft's WebsiteSpark requires Web developers to color within the lines that Microsoft dictates. That may be well and good for a big population of developers, but it's not the path that Digg, Google, Facebook, etc., have taken.

Microsoft is huge in enterprise computing, in part because it lowers the cost and complexity of development for enterprises of any size. But the Web is built on open source. Microsoft is playing catch-up in this market, and it's simply not going to be enough to wave great tools in front of developers for a low fee.

Microsoft isn't alone in making such a pitch. Oracle, for its part, is touting the development of OraTweet, a Twitter clone built with Oracle Application Express Web development platform. But the reality is that enterprise ISVs like Oracle and Microsoft are largely invisible in Web development.

This is one reason Oracle is interested in picking up MySQL, the leading Web database. MySQL is almost entirely complementary, not competitive, to Oracle's enterprise-focused database.

Microsoft, however, has no such plans to buy its way into the open-source development community, which means it must rely on programs like WebsiteSpark to catch up. It's a start-up, but it's not enough.

As cloud computing edges its way into the enterprise, the open-source Apache Hadoop project may well prove to be the poster child of the movement. Hadoop effectively gives enterprises the power of Google or Yahoo Web indexing for free, or for the cost of a CloudEra subscription if you want to involve Hadoop's core developers in your rollout. Credit card giant Visa is an early corporate adopter of Hadoop, and points to a bright future for the open-source project.

I caught up with Visa's Joe Cunningham, head of the technology strategy and innovation group, to talk about the company's adoption of Hadoop.

Q: What got you interested in Hadoop initially and how long have you been using Hadoop?
Joe Cunningham: It's early days for us here at VISA for Hadoop. It's still very much classified as a research and development activity.

My role is the head of technology strategy and research and development for the company. Our task is to look outside the company for interesting technologies on the landscape and identify potential opportunities for those technologies to add value to either the VISA business of VISA technology and then bring them in and play with them in our lab research environment until they are ready for mainstream or commercial activity.

Hadoop is one of those technologies we've been looking at for about a year and we think it offers certain value as an augmentation to existing systems and capabilities VISA has.

Q: How do you use Hadoop at VISA? What made you think it could be the best solution for what you're trying to accomplish?
Cunningham: The most important thing to remember is VISA obviously has a heritage of offerings--very large, very scalable, very reliable, and very secure services to the payments industry. And we're continuously trying to innovate and make those services more valuable to our clients and ultimately to cardholders.

We have a data challenge we attempt to meet every day in terms of the number of transactions we handle and therefore we think there's an opportunity to look at the skills VISA already has in the data analytics space with the power of Hadoop to handle very, very, very large volumes of data.

To put that in context, we handle approximately 200 million transactions a day at VISA. That works out to be about 8,000 transactions a second, and with that comes huge volumes of data and Hadoop offers the potential to harness some of that along with some of our existing capabilities to extract more value from those transactions.

Q: Are there particular directions in which you'd like to see Hadoop evolve?
Cunningham: I think we're interested in looking at Hadoop and looking at its evolution over time. We're certainly interested in how the Hadoop community continues to operate in this open-source environment.

My specific interest is how can Hadoop evolve from the alpha beta environment in which it is today to the mainstream and how can we continue to integrate it as a mainstream technology with all the existing platforms we have here at VISA.

I'll give you two examples. The operations management space is very important to us: how we guarantee the reliability and security of our systems and how Hadoop can be merged or integrated into that environment. And secondly, and I guess this is a common question, but how can we enable SQL-like access to some of the data via the Hadoop file system or via the Hadoop engine?

Q: Given that it's still early days for Hadoop at Visa, it's interesting that you're speaking at the upcoming Hadoop World conference, along with JP Morgan Chase, China Mobile, and other Hadoop users that may be further along the adoption curve. What are you going to be talking about?
Cunningham: I plan to talk about the application stream, so I'll be taking a business-focused view of how we see Hadoop offering value to Visa. If there are tech junkies in the room, they are probably not going to be as interested in what I talk about.

I plan to spend a little bit of time showcasing Visa's technology today to set the scene. I will talk a little bit about our research and development function and how it works with the rest of Visa. Then I'll spend some time expanding on what I call our information products business.

The information products business for Visa offers services to our clients that are, obviously, information-based. So, some of the use cases where we see Hadoop potentially offering value in the future are in the areas of transaction analysis (particularly for risk products and the modeling of risk scenarios), fraud analysis (assisting our clients in potentially managing fraud more carefully), and in the loyalty space where Visa offers services on behalf of our clients to cardholders.

There's an opportunity for us to combine the power of Hadoop with data analytics capabilities that Visa has to augment those services and products on behalf of our clients.

In fact, that's an area that I'm hoping to learn a lot at the event. In some industries, Hadoop is very much mainstream but for some others, it's still emerging and I'm trying to understand whereabouts on that hockey stick or [Gartner] Hype Cycle Hadoop is, or whether Hadoop is already mainstream and it's just a matter of us catching up.

It's always good to gauge and plot that evolution. I think you need to get to these events and talk to other companies and key leaders in the community to really understand where we fit and what we should be doing next at Visa.

For those interested in attending Hadoop World in New York, the organizers are giving Open Road readers a 25 percent discount if you register by September 24.

It was announced Monday that smartphone maker Research in Motion had acquired Torch Mobile, a provider of browsers and other applications based on the open-source WebKit project. Though Webkit has become the unofficial standard for mobile browsers, as Don Reisinger reports, it seems to be a largely Apple-controlled open-source community, one that has the potential to leave RIM, Palm, Google, and other WebKit users constantly playing catch-up to Apple.

Is WebKit open source? Absolutely. But is it truly an open, level playing field for RIM and other would-be competitors to Apple? Likely not.

Yes, there are other developers from Nokia, Torch Mobile, and Google involved with the project, but Apple controls the project, if by no other means than sheer numbers. Apple employs the majority of WebKit developers (30), with Google coming in second (19). Torch Mobile? It employs just eight of the WebKit development team members.

More pertinently, Apple employs far more of the WebKit reviewers than anyone else, which gives it much more control. Most of the other participants are committers, which are important but not equal in control to reviewers.

I've even heard that WebKit is not accepting outside contributions at present, though I have not yet been able to verify this.

Not that you need to look too deeply to see Apple's grip on the project. Just look at the logo:

WebKit logo

Look familiar? It should. Here's Apple's logo for its Safari browser, which is based on the WebKit project:

Safari logo

Coincidence? Um...no. After all, the WebKit blog is called (get this): "Surfin' Safari. Think the blog is going to change its name anytime soon to "Surfin' RIM"? Don't hold your breath.

As the proud owner of four MacBook Pros and three iPhones, I'm not bashing Apple. I love what it produces.

But if part of RIM's interest in Torch Mobile was influence in the WebKit project, it could have saved its money. WebKit, for better or worse, is largely an Apple project, with serious support from Google. For everyone else, WebKit may be the best game in town, but it's Apple's town. It almost certainly will result in a better Blackberry browser for RIM customers, but not one that RIM has as much control over as it would like.

There are some technologies that make less and less sense as proprietary software. The browser is one of them. With Mozilla Firefox and Google Chrome actively gaining at Internet Explorer's expense on the "desktop," it would be nice to see a truly open-source project--open in source, and open to outside involvement--standardize the mobile browsing experience, too.

There's Mozilla's Fennec, of course, but its development has been slow. WebKit may be the best option for RIM and others, but it would be an even better option if Apple took its hands off the wheel to open up the project further.

Follow me on Twitter @mjasay.

If "only the paranoid survive," as former Intel CEO Andy Grove used to say, then Mozilla, the organization behind the open-source Firefox browser, needs to put its paranoia on overdrive.

That's the sense I got reading through Redmonk analyst Stephen O'Grady's billet-doux to Chromium, the open-source project behind the Google Chrome browser. O'Grady has long been friendly to Mozilla and a dedicated user of Firefox. When his head is turned by another browser, it's time for concern.

Yes, Firefox continues to grow its market share, now sitting comfortably at 22.47 percent, while Chrome is far behind at 2.59 percent. But O'Grady is an influencer (even if he has yet to persuade me to adopt the Linux "desktop"), and his reasons for preferring Chrome are important:

The open source version of Chrome is far from perfect; the recently enabled plugins which permit the usage of Flash and so on are regularly disabled and/or non-functional, the rendering engine still has its occasional issues, and too many poorly designed browser-sniffing sites give it a hard time. But it's just so damned fast. And speed is not just a feature, but a feature I prioritize.

Not in the rendering. Although its from-scratch V8 Javascript engine definitely gives sites like Google Docs a boost, I've found Firefox 3.5's counterpart, Tracemonkey, very competitive on most sites. But that's where the good news ends for Firefox.

In virtually every other sense, Chromium outperforms Firefox. Google's browser launches more quickly, features snappier tab creation and--perhaps most importantly--doesn't bog down after prolonged usage. And while the performance gains when measured might seem minute...they really add up over time.

As O'Grady notes, his observations apply to the Linux versions of Chrome and Firefox, but they still should give Mozilla pause.

In this little war, however, perhaps Microsoft is taking Firefox's side, at least against Google. As The Register reports, Microsoft Office Web Apps, due out in 2010, will support Firefox and other "familiar Web browsers," which doesn't include Chrome, Safari (for Windows), or Opera. Apparently, Microsoft will only be supporting those browsers that don't have an operating system competitor attached to them.

The browser market has become hugely competitive and, as a result, more innovative and much more interesting. I'm confident the Mozilla team will respond to Chrome's apparent speed advantages, but equally confident that Google, Apple, and Microsoft will work just as hard to outflank Mozilla and the other browser competitors in other ways.

All of which is good for you and for me as we enjoy the results of the competition. Now if we could just get this level of competition in all areas of software.

Follow me on Twitter @mjasay.

Some argue that open-source software can't innovate. In fact, one of the industry's former executives, Peter Yared, recently argued that "the only successful open-source companies sell commodities."

Yared clearly hasn't heard of SpringSource, an open-source application platform provider that is redefining the J2EE application server and, quite possibly, the future of open source.

Yared isn't alone in his beliefs. A friend recently wrote me to suggest that open source is at its best when disrupting big, profitable markets:

Commercial open source is a (commodity) replacement market. When it is not (i.e., people are building new, never-done-before cool/future-proof apps with open-source technology), then it is a pure-play Internet-based business model, one that is becoming so specific/demanding that people will want full control and (to) develop their own stuff, e.g., Google, Facebook, and others that heavily use open source to build their Web services.

SpringSource and its ubiquitous Spring Framework, however, promise something different. Something much more ambitious. Not only does Spring challenge the status quo in application development, deployment, and management (Hyperic), but SpringSource is proving that commercial open source can peacefully coexist with community involvement.

In a conversation with Spring creator and SpringSource founder Rod Johnson, he clarified SpringSource's competitive differentiation:

The essence of SpringSource is that we're not a commodity play but have a far more ambitious agenda. We're not interested in replicating what closed-source vendors already offer, at lower price: We are providing a superior experience to developers and operations teams--for example, in our integrated approach to unifying the application life cycle from developer desktop to the data center--which doesn't presently exist in Java.

Of course, our offerings are also leaner (more productive and faster), cheaper and more open than those of the old incumbents, and that's a huge selling point in today's market. But we're focused on being the enterprise Java leader--and not merely in open source.

SpringSource's mantra: Managing the full Java life cycle.

(Credit: SpringSource)

SpringSource isn't simply replacing IBM WebSphere, Oracle WebLogic, or Red Hat JBoss application servers. It is actually doing much more, and it offers, in my opinion, the best example of just how disruptive an open-source vendor can be precisely because SpringSource isn't seeking to be the open-source leader in Java, but the leader, period.

Gartner estimates that there are currently at least 2 million Spring developers, an impressive number suggesting that the Java community is looking to Spring to help it migrate Java applications onto lighter-weight containers (Tc Server), across highly virtualized environments, and ultimately to the cloud. Given SpringSource's strong financial performance, the company seems to be doing a good job of monetizing a significant percentage of that Spring adoption.

After meeting with the SpringSource executive team at its San Mateo, Calif., offices a few weeks ago to discuss its strategy, I'm convinced that the company is on track to improve that percentage significantly too.

We're at the point when it's not enough to be "the Red Hat of (CRM, ECM, ERP, etc.)." In a bad economy that sees open-source solutions adopted at an ever-increasing pace, now growing at a 22 percent CAGR (compound annual growth rate), according to IDC, it's time for open-source vendors to lead and develop markets, not simply follow in the wake of established proprietary vendors, picking up their crumbs.

SpringSource is demonstrating how it can be done. It's an aggressive company with the finances, management, and product ambition to become a very big player in enterprise IT within just a few short years. It's a company that Microsoft should fear and that Oracle or IBM should buy.

Of course, SpringSource being SpringSource, it might actually be planning to buy Oracle or IBM instead.

Follow me on Twitter @mjasay.

Matthew Szulik, Red Hat's former CEO and current chairman, has been in semi-retirement for the past two years, but you'd never know it from listening to his interview with the BBC's Peter Day. Szulik, ever the revolutionary, talks up open source's opportunity to disrupt conventional software and promote social reform.

As he does so, however, he inadvertently describes Red Hat's winning open-source business model as directly parallel to the Web 2.0 business models deployed by Google and others. While this isn't surprising (I've written about it before), it was the first time I've heard Red Hat state it so baldly:

Think about [open source] like mining. There's all of these natural resources buried under the ground.

But unless you have a large aggregator to pull it out of the ground; to take the gold or the coal or the copper and turn it into something usable, then it's really not useful for mankind.

[Day interjects, "But Linux was usable before, wasn't it?"]

It was usable by the 14 people that are sitting in Cambridge or Oxford right now. It was really not a mainstream technical activity.

Red Hat develops some of the open-source software it distributes. It is the primary contributor to the Linux kernel, writing 12.3 percent of the Linux kernel, and spends, by Szulik's estimation, "over $100 million per year to advance Linux and open source [development]."

But Red Hat, like Google, Facebook, and other "Software 2.0" companies that heavily employ open-source software, gets more than it gives to open source. It is a net beneficiary.

Sure, as Szulik goes on to explain to Day, Red Hat "puts all of that [$100 million worth of] intellectual property into the public domain," which differs from Google and others that write a lot of proprietary software that is never shared with external developers, but the core model of building upon open-source software and wrapping it with proprietary services is very much the same model employed by every significant Web company today.

I'm also willing to bet that Google contributes more than $100 million worth of intellectual property as open-source software every year, making it an even bigger open-source company than Red Hat, at least in terms of lines of code contributed.

I used to complain that the Web companies pick and choose where to contribute back, but it all seems to work out in the end. Yahoo works on Hadoop while Red Hat releases KVM while Google releases Gears while...you get the picture. Different companies releasing and "free-riding" on different open-source code, with the entire industry growing and benefiting in the process.

Follow me on Twitter @mjasay.