BusinessWeek is asking an important question of open-source companies: despite the rapid growth of some open-source businesses (e.g., Red Hat, Novell Suse, Alfresco, SugarCRM, and others), it's still very much an open question as to whether open source can deliver outsized returns for investors.
"A pure service business is not particularly defensible," says [Red Hat CEO Jim] Whitehurst. "Some open-source companies have not truly figured that out." If the open-source movement, now in its second decade, is to realize its promise for vendors and investors, more of its purveyors will need to get the message soon.
Savio Rodrigues of IBM has been beating this drum for some time, suggesting that pure open-source business models have a built-in glass ceiling. While I think this is a bit overstated, I 100 percent concur that any business must figure out a "proprietary" differentiator that tells a customer, "This is why you buy from me rather than my competitor, and rather than taking it from me for free."
Support, as Jim Whitehurst suggests, is not a compelling enough argument for most would-be buyers.
This is why I've argued for a phased approach to open source. It's inefficient to try to "reap" every prospective customer in the early stages of a business: making the code open source lets a company sow a wide field of prospective buyers.
But it's also inefficient to rely on faith and goodwill to reap customers later in a company's growth and revenue trajectory. There must be a compelling reason to buy. This is where many in the open-source world lose their way. But what should that reason be? That is the nettlesome question.
... Read moreAs I'm occasionally reminded, MySQL didn't start out as open source. In fact, MySQL's original license was very similar to what it is trying to achieve today: Free for noncommercial use, but not-so-free for commercial use. It didn't decide to go open source (GPL) until 1999.
So for those of us that get caught up in MySQL's decision to keep some extensions closed to paid subscribers, perhaps a refresher course in MySQL history will make it seem a bit less shocking. (Also be sure to check out the early 2001 brouhaha over trademark violations surrounding MySQL.org. Fascinating stuff.)
With that said, there's an ongoing tension between commercialization and adoption that MySQL (and all commercial open-source projects) have to manage. As a friend noted in an email to me yesterday:
Remember that Monty [co-founder of MySQL] chose to go open source only after the world totally ignored his work. There is a real value that goes along with being open source that lends itself well to adoption. If you have to pay, then that will deter adoption of immature products in ways that it won't with free products.
His take on Monty's reasoning is a bit strong, and I don't agree that MySQL had been ignored, but still he has a point: Open sourcing one's code can lead to far greater adoption in a short period of time than proprietary source.
The question, however, remains for all open-source projects: Is it fair or productive to close off the code after open source has made it popular?
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Is proprietary software really that bad? Or is it a fair contract between consulting corporations? The answer is "It depends" and "Not really." Both depend on the strictures a vendor puts in place to inhibit its ability to lock a customer into its software. In MySQL's case, MySQL has no intention to lock customers in, as far as I can tell. It just wants to convince customers to pay so that it can prove its worth.
MySQL is contemplating introducing extensions to its core database that are only available to paid subscribers, for compelling reasons. This is not, as has been suggested, in and of itself proprietary. Red Hat does the same by providing an initial gate to its RHEL code which only a paid subscriber can access unless they get it from an existing customer of Red Hat's.
The question is not the open-source legitimacy of an otherwise open-source binary wrapped in a closed contract. This is simply a way of preventing services (like the Red Hat-provided compilation of that binary from source code) from free redistribution.
The question is one of redistribution of binaries.
There are actually ways to do this that let MySQL balance open source with closed permissions. I've drafted language for a license grant below that I think does this. It's not open source, but might be a way to balance its need for more cash growth with continued emphasis on community growth.
... Read moreInfoWorld just released an excellent "roundtable" series on open source with a range of open-source thought leaders (including me) weighing in on the future of open source, competition for open source, and whether all the open-source infighting actually does more good than harm.
On competition with proprietary software companies, I suggested the following:
For the moment, I just want to see Microsoft, SAP, Oracle, and IBM develop their own vibrant corners of the open source universe. I want them at the table as full participants. This will require them to change some aspects of their business, but I think they'd find them revelatory rather than ruinous. These are some of the smartest companies on the planet. I'd love to see the open source communities they could create, if they but wanted to do so.
Much more interesting to me were Javier Soltero's comments on whether commercialization of open source is good or bad for projects:
... Read moreRecent research suggests that much of the core development work on open-source projects is done by paid developers. Is this a bad thing?
The answer is in the data. I just finished reading Evangelia Berdou's Ph.D. thesis "Managing the Bazaar: Commercialization and peripheral participation in mature, community-led Free/Open source software projects," and highly recommend it to anyone seeking to understand how open-source communities operate, especially in light of the increasing encroachment of commercial interests into open-source development communities. Berdou looks at paid vs. unpaid developer contributions to GNOME (GNU Network Object Model Environment) and KDE (K Desktop Environment) and reaches some interesting, if unsurprising, results.
Berdou starts with four primary hypotheses, only two of which end up making the grade:
- Paid developers are more likely to contribute to critical parts of the code base.
- Paid developers are more likely to maintain critical parts of the code base.
- Volunteer contributors are more likely to participate in aspects of the project that are geared towards the end-user.
- Programmers and peripheral contributors are not likely to participate equally in major community events. (134)
Only Nos. 2 and 4 end up surviving her analysis, though her data (and my experience) suggests that No. 1 is also true.
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I was surprised that Sun could go from idea to acquisition on MySQL in just five weeks. What turns out to be more surprising, however, is that Jonathan Schwartz, Sun's CEO, had been talking with Marten Mickos of MySQL for over five years on precisely that topic, as Jonathan reveals on his blog. The real question, then, is why did it take so long?
Jonathan doesn't say, but the answer is clear: Marten wanted to build an IPO-able, independent MySQL. He eventually sold because it made sense (and, I suspect, because the prospect of living in the glare of Wall Street's impatient eye was not looking as appealing as it once had, but that's just Matt Asay personal conjecture).
Jonathan's post is a fascinating read. Here's just one of the sections I found revealing, coming on the heels of his suggestion that there are no "cost synergies" in the deal (Sun isn't going to save money by marrying salesforces, for example):
Where are the revenue synergies?
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Linuxworld has a thought-provoking interview with Linus Torvalds that is a must-read. Linus is always interesting, but this one is particularly valuable because he addresses the role of commercial interests in making Linux better. He also talks about his personal motivations - financial and otherwise - and suggests:
The thing is, being a good programmer actually pays pretty well; being acknowledged as being world-class pays even better....So I think I would have missed the opportunity of my lifetime if I had not made Linux widely available [rather than made it proprietary and built a company around it].
So, if you marry the wide adoption of open source with the talents of a Linus Torvalds and the commercial interests of a Red Hat or MySQL you get...a fantastic community, and one that is good for developers, customers, and vendors.
Linus gives particular praise to commercial interests that have made Linux better:
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One of the first people I thought of when thinking up this In the Trenches series was Chris Harrick of SugarCRM. I've known Chris for a year or two, and have always been impressed. He's the sort of employee that any company would want, whether proprietary or open source. Fortunately for the open source world, he left Siebel to join SugarCRM.
When you talk with Chris, you don't get the sense that he spends much time mucking around in the ideological side of open source. He cares about customers and figuring out how to make them happy. And, as you'll see below, he thinks a lot about this and other issues that affect an open source business.
Name, company, title, and what you actually do
Chris Harrick, director of Product Marketing, SugarCRM. My team is responsible for communicating the benefits of SugarCRM products to open source users, prospects, customers, analysts, partners, and the media. Responsibilities include creating product messaging, competitive positioning, supporting sales, developing demos and webcasts, briefing analysts and the media, and authoring lots of collateral (White Papers, Datasheets, Press Releases, Web Site, Customer Case Studies).
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I spent some time talking with Martin Plaehn, CEO of Bungee Labs. He said something that I found deeply poignant given my current role with Alfresco:
There are no old gladiators. There are only old gladiator coaches.
His point was that you often get promoted to management because you were the best in your given role, but you don't remain the best at that role for long. There are always better people coming up through the ranks, and your job as a manager is to enable and channel their superior expertise.
Thinking about my own team today, I realize that this is absolutely true. Martin Musierowicz, for example, who joined Alfresco from JBoss and runs our OEM/Alliances business, is infinitely better in that realm than I could hope to be. The same is true of the rest of my team. I could not do their jobs better than they can.
And, frankly, the same is probably true in your company, too. Which is why I'd like to highlight the perspectives of the front-line managers and individual contributors at various open source companies who are the future (and present) of open source, and make their businesses tick.
In particular, I'd like these people to submit short articles that address the following:
- Name, company, title, and what you actually do (as titles rarely tell the full story)
- Do you work remotely or in an office with co-workers?
- If you've had a similar role in a proprietary software company, how does your current role compare? Similarities? Differences?
- How familiar were you with open source before you joined your current company?
- Why did you join an open source vendor?
- How long did it take you to adjust to an open source operational mode?
- What do you think open source companies could learn from proprietary vendors?
I was reading The Economist on my flight home from London today, and came across this paragraph in an article that resonated with me, because it reminds me of the various non-profit "lobbies" within the open source software movement.
Too many Brussels think-tanks accept large chunks of their funding from EU institutions and national governments. Others depend on big corporate sponsors, so that the lines between research and lobbying becomes queasily blurred....Nobody seems able to change the default formula for Brussels policy seminars: good coffee and croissants, dull speeches and a brief exchange of conventional wisdom. The painful comparison is with Washington, DC, where the best think-tanks refuse public money, compete to set the agenda with provocative ideas, and enjoy extraordinary access to administration and Congress alike. (June 9, 2007. 45)Open source software has the OSI, the Free Software Foundation, the Software Freedom Law Center, he Linux Foundation, various conferences (OSCON, OSBC, LinuxWorld, etc.), and various other overtly open source or friendly-to-open source organizations. How effective they are in promoting open source is, to my mind, directly proportionate to their independence.
I thought it was a net negative to see the Free Standards Group merge with OSDL. FSG was a "bottoms-up" organization, despite its corporate funding. OSDL was never more than an attempt to rein in Red Hat. I think very highly of Jim Zemlin, and think he bleeds more FSG (his original home) than OSDL, and believe he can do much good. But he has his work cut out for him to ensure the community's voice is heard in the Linux Foundation.
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