- If Microsoft were to sue the Linux world...
- Microsoft's compatibility problems
- The most hated man in open source?
- Speaking of hippies...
- !%!%!% hippies hurting open source's progress
- To the SIs of the world: Getting more from your ISV partners
- Rules for open source marketing
- Apple's Spotlight now indexes Entourage
- Sun's Open Source Strategy still MIA-An open letter to Jonathan Schwartz
- Quick Note-this blog is getting KILLED by comment spam
March 31, 2006 | Comments: (0)
If Microsoft were to sue the Linux world...
...a happy man I'd be. Of course, Microsoft couldn't sue a technology. But would it sue Linux providers? Like IBM, as the biggest target? I, for one, hope so. Here's what Ballmer said in his recent Forbes interview:
What's going on in terms of Microsoft IP showing up in Linux? And what are you going to do about it?I, for one, can hardly restrain my glee. I can't think of anything better than Microsoft suing members of the open source commercial community.[Asay note: Again, leaving aside Dan Lyons' softball questions to Ballmer....]
Ballmer: Well, I think there are experts who claim Linux violates our intellectual property. I'm not going to comment. But to the degree that that's the case, of course we owe it to our shareholders to have a strategy. And when there is something interesting to say, you'll be the first to hear it.
For one thing, it wouldn't have any larger (long-term) impact than SCO has. Short-term impact? Sure. But I'm actually not convinced that the further ill-will Microsoft would earn itself would make it any friends.
Headline: "Microsoft, angry that a rival operating system actually works, is available to buy (unlike Vista), and doesn't require minute-by-minute security patches, sues Linux. Users, which now include every company on the planet, revolt."I wonder sometimes if Microsoft remembers what it's like to compete, to live....
Microsoft has done so little for so long that it must be terrible to have to move its girth to actually compete. That the only way it knows how to compete is with a possible lawsuit is testament to how far the company has fallen. Try competing with products, Ballmer. Not lawyers.
Posted by Matt Asay on March 31, 2006 02:00 PM
March 31, 2006 | Comments: (0)
Microsoft's compatibility problems
Steve Ballmer needs to occasionally visit Planet Earth. His recent Forbes interview is full of blog fodder. I'll take it in small doses....
Forbes.com: Right now, I can go out and get a free alternative to just about every product Microsoft sells. Why do people keep paying you for something they could get free?I 100% agree with Ballmer on one thing: people value their time. But I'm not sure it leads to the conclusion he thinks it does (viz. People value their time, therefore people value Microsoft). For example, the fact that I value my time, I buy Red Hat Enterprise Linux instead of Fedora: I don't want to futz with stabilizing and supporting a kernel. Or I pay for a SugarCRM subscription. Or whatever.[Asay Note: This is a MAJOR softball question, but then, Dan Lyons is anything that isn't open source. What's interesting is how telling Microsoft's response is to what should have been a home run pitch.]
Ballmer: One, people value their time. Our stuff does more, and they like that. Two, people value their time, and those [free] things tend to be clunky. Let's say you think you can save $50. And then you go and waste three hours. You tell me how quick that payback is. You can sketch that out at the enterprise level as much as you can at the individual end-user level. So people value their time, and people value their capability. Frankly, people value not only the compatibility our stuff has with itself, but they value the add-ons and the third-party customization that people have done. As long as we keep pushing the pace of innovation and delivering that value, I think we have a great opportunity.
In fact, because I value my time, I buy a Mac, instead of a Windows machine, because I don't want every spammer, phisher, and virus-writer on the planet using my system. If I were an network administrator, I'd value Linux for largely the same reasons.
As for the economics of Microsoft beyond its bloated software, consider what Ballmer said: "People value not only the compatibility our stuff has with itself...". Did you catch that? Microsoft is compatible with...itself (and the third-party customizations and add-ons he mentions later). This means that if you have a large network to administer, and have Windows, NetWare, Solaris, and Linux on it, you're not really any better off with Microsoft than you are with Linux. It's only when you buy wholesale into the Microsoft ecosystem that all the magical benefits appear. (Of course, this is also when those same benefits cripple users because they're held hostage to one vendor and its myriads of enemies who dream up all sorts of viruses and such for its products....)
Let me state that again, to be clear: the Microsoft value proposition only makes sense if you buy into it completely. Everything Microsoft is compatible with itself. Once you're like 90% of the planet that actually has to use anything else, you might as well embrace Linux and other open source software, because Microsoft is no better with heterogeneity than anything else.
Arguably, it's worse, because it wants so much to dominate. Hence, Microsoft requires you to have an MSN Passport account for random, silly things. Want to collaborate on documents? No problem. You can get SharePoint Services for free! (With the purchase of Windows Server 2003, which isn't free.) Oh, you want to actually do something real with document management and collaboration? Then you need SharePoint Portal (which doesn't scale, is weak on performance, etc., but never mind...), which will only really work if you also buy/use SQL Server, Office, Windows Server 2003, IIS, Internet Explorer, and any other Microsoft product developed in the last 100 years.
Microsoft is an all-or-nothing deal. And the price is high.
As for innovation, please! Let's be clear: where does Microsoft make nearly all of its money? Windows and Office. When was the last time those things appreciably changed? (By "appreciably," I mean enough so that people actually care, and don't mean "added 100 unrelated things (like the browser) to try to inhibit competitors from compatibility.) Microsoft has the main email client and server that people use - yet what innovations has it introduced? Virtually none. It owns the browser market...and has done nothing there. It owns Office, and it took a few volunteers very little time to come up with something that is functionally very close to Microsoft Office.
Microsoft may spend a lot on R&D, but it does not meaningfully innovate. The company's primary innovation is in finding ways to prolong its existence as a vendor of Windows and Office. It may have been a technology innovator once, but those days are long gone.
Posted by Matt Asay on March 31, 2006 01:01 PM
March 31, 2006 | Comments: (0)
The most hated man in open source?
Sarah Lacy's attempt to humanize JBoss CEO Mark Fleury in Open Source Lightning Rod offers a sneek peak into the enigma that is JBoss's boss man.
Fleury owns up to the reputation that he has developed. Sitting in an unkempt office in a flashy Atlanta building, he downs a giant cup of coffee before dribbling Visine into red-rimmed eyes. He spits sunflower seeds in a cup as he talks about why people hate him. The old software world? They're jealous. Open-source zealots? "They probably hate me at night because they didn't have the cojones to go out and do [what I've done].
Posted by Dave Rosenberg on March 31, 2006 10:45 AM
March 31, 2006 | Comments: (0)
...Someone reminded me that Microsoft didn't look all that polished back in 1978, either (i.e., like open source developers today). It's taken a few billion dollars and a wife to get Brother Gates looking spiffy.
Posted by Matt Asay on March 31, 2006 07:47 AM
March 30, 2006 | Comments: (0)
!%!%!% hippies hurting open source's progress
Or, so says Peter Quinn, former CIO of the Commonwealth of Massachusetts, as reported by CNET.
"Open source has an unprofessional appearance, and the community needs to be more business-savvy in order to start to make inroads in areas traditionally dominated by commercial software vendors. (Having) a face on a project or agenda makes it attractive for politicians (to consider open source)."What with all the greedy capitalists running amuck in open source land, I can't see this as remaining a salient issue for long.
In the interim, it is true that the more business friendly open source becomes, the more business it will do. Right now, it's being used everywhere, as Peter indicates (below), but necessarily paid for everywhere. That "paid" element is important because it allows for reinvestment into the open source code commons:
"I think there's something going on in every agency in every (U.S) state," he said. "Whether the CIO knows it or not, that's a different thing. I think almost everybody, they say, 'It's not happening at my shop, I promise you,' but when you (go) to their shop, it's happening. So I think it's happening everywhere, but there's varying degrees."This is 100% consistent with my experience. I remember speaking to the IT workers of one of the largest US states roughly two years ago. The general counsel of the state spoke before me, and cautioned the IT group to be careful about this open source thing, and wait to use it until the legal team had developed a suitable legal policy governing its use. After she walked out, I got up and asked, "How many in this room are using open source today?" 80% of the hands went up.
But, again, I tend to agree with Peter that for open source to truly dominate, it needs to look more like the people buying it. Surely a small price to pay?
Posted by Matt Asay on March 30, 2006 09:20 AM
March 30, 2006 | Comments: (0)
To the SIs of the world: Getting more from your ISV partners
Over the past few months, I've been helping to grow my company's systems integrator ecosystem. Because we don't have a professional services arm - we do 100% of our implementations through partners - we spend a lot of time working with our partners. They are our lifeblood.
This is why I've talked before about how important it is to choose SIs carefully and why it's critical to us that our SI partners feed our well-being in parallel with our feeding theirs. To put it much too simply, it's important that our partners make us money, and that we make them money.
This last point - making our partners money - happens concurrently with our releasing code. In the open source world, an SI partner can take our code, implement it for their customer, and collect services (and support) revenues, without ever involving the creator of the code. Great for them, right? And, frankly, not terrible for us. It's nice to be widely used, even if it doesn't directly (or indirectly for that matter) bring us cash.
However, as it works out in practice, those partners that "feed us" are the ones that we, in turn, feed deals/leads. We have some partners with whom we work constantly, bringing them our largest, ripest deals. Why? Because they have both brought us big deals and they consistently promote the importance of our certified, supported version. Those that default to community version because it's an easier sell (because it's free) will tend to see less business from us.
Talking with other open source companies, it's no different elsewhere (and is the same outside the open source world): companies exist to make money, and will focus on partners that help them achieve this goal. Very simple.
So, if you're an SI, your first conversation with a prospective technology partner shouldn't be about geographical or market exclusivity. It shouldn't even be about what deals the ISV has in its pipeline and can feed to you. It should be about how you're going to promote that company's premier product, as well as concrete deals that you will bring to them. If the company you're talking to is like mine, you'll quickly find the return on your investment to be immensely profitable.
Posted by Matt Asay on March 30, 2006 08:15 AM
March 29, 2006 | Comments: (0)
Rules for open source marketing
Ian Howells of Alfresco just posted 10 rules for open source marketing. As Dave and and I have discussed before, open source marketing is one of the most important things in this new world of open source, and one of the least understood.
Ian is an experienced marketer (Documentum, SeeBeyond), with some interesting things to say about how to market in the open source world:
Ian's blog has 7 more. Take a look.
- Know Who You Are Competing Against - Geoffrey Moore
Geoffrey Moore in Crossing the Chasm pointed out that when you start in a new market you compare yourself to the old way of doing things. The competition is proprietary vendors not other open source companies.
- Attack the Weakness in their Strength - Trout and Ries
The strength of traditional enterprise software companies is their size - salesforce, marketing budget, customer base. This is also their weakness. It is a high cost infrastructure and people tend not to trust big budget adverts or sales people. Open source is about trust - open about what you have and freely allowing people to try it. Hence, open source marketing is trust based marketing.- Discontinuity is King - Geoffrey Moore
Geoffrey Moore put discontinuities at the top of the agenda for all chasm crossers. The discontinuity in open source is cost. However, that alone is not enough. The cost of the infrastructure to deliver open source is also key, as are the tools to support trust based marketing vs. big budget marketing.
Posted by Matt Asay on March 29, 2006 10:58 AM
March 29, 2006 | Comments: (0)
Apple's Spotlight now indexes Entourage
I was in my Entourage preferences today and accidentally stumbled across a new feature (not sure when Microsoft updated Entourage to do this, but I'm grateful all the same):
Entourage is now indexable by Spotlight in Mac OS X. Finally!
To make it work, you have to do something somewhat counterintuitive: you have to set Spotlight to deliver results for iCal and Mail. No idea why, but I just tested it and it works.
Posted by Matt Asay on March 29, 2006 10:53 AM
March 29, 2006 | Comments: (0)
Sun's Open Source Strategy still MIA-An open letter to Jonathan Schwartz
Sun's overall messaging and strategy around open source is still broken -- and I don't think another Jonathan Schwartz "I've waited a whole career to write this" utility computing blog entry is going to make the story any clearer.
Today, Peter Galli from eWeek analyzes ActiveGrid CEO (and former CTO of the Application Server Group at Sun) Peter Yared's open letter to Schwartz, questioning Sun's inconsistent, incoherent and sometimes outright absurd open source strategy and messaging.
Apparently, Galli gave Sun numerous opportunities to respond to Yared's questions -- and Sun punted and offered to provide some answers at the JavaOne event in May (sorry guys, even my news cycle moves a little faster than that).
Can we infer that Yared's question ...
"Why is it good to open source OpenSolaris and OpenOffice and bad to open source Java?"
... has completely confounded Schwartz and the open source crew at Sun?
Will Sun's answer be to open source Java at JavaOne? Will they give Yared (and the numerous others who have cried out for Java to be open sourced) any credit when they do the curtain raiser?
Previously:
Sun vs. Scripting Languages
Marketing to Dilbert: Mini-analysis of Sun
Sun coming out of death spiral-McNealy moving on?
Front End Integration-Lightweight Architecture Part 3
Enterprise SOA Apps Take Off on Lightweight Architecture
Google, Amazon, and Yahoo! point enterprise developers towards "lightweight" architecture
Posted by Dave Rosenberg on March 29, 2006 08:26 AM
March 29, 2006 | Comments: (0)
Quick Note-this blog is getting KILLED by comment spam
Apologies if it takes a few hours for us to approve comments. We are being inundated with crap. It seems like anything with the word Microsoft is getting hit hardest. I would like to tell the spammers to burn in hell, but I promised Steve Fox no foul language or idle threats.
It's very annoying that there is no way to turn off comments in bulk via Movable Type.
Posted by Dave Rosenberg on March 29, 2006 07:53 AM
March 28, 2006 | Comments: (0)
Open Source Management Tools to Watch: Ganglia
In his previous guest editorial, GroundWork CEO Ranga Rangachari promised to point out some specific open source IT monitoring and management tools that he thinks enterprises should be keeping an eye on. Today, he points readers towards the Ganglia project.
Open Source Management Tools to Watch: Ganglia
The use of commodity components for building clusters is one of the hottest growth areas in enterprise today. Since the inception of the Beowulf project more than 10 years ago, companies like Penguin Computing (CTO Donald Becker was the pioneer of Beowful) have evolved clustering from research, HPC origins and made it highly consummable for the enterprise.
So how does clustering -- and tying together "clusters of clusters" across geographic boundaries -- impact the systems monitoring requirements that the typical enterprise has?
Matt Massie is the original author of the Ganglia Monitoring System, an open source cluster monitoring technology started within UC Berkeley's Millenium Clustered Computing Labs. Ganglia has quietly gathered a ton of momentum for its cluster monitoring capabilities. Ganglia has been downloaded over 110,000 times from 145 countries and currently has dozens of contributing developers.
"The biggest difference between computational clusters and run-of-the-mill IT systems management is that with clusters you're looking at parallel systems where local failures have a wide effect," said Massie. "With systems like mail, you tend to have redundancy, so if one server goes down, the load goes to another, and you don't have a job failure. That's not the case with clustering -- where there's so much interconnectivity between the nodes, and if one fails, you tend to lose the job. When there-s a failure in a cluster - which can happen on a daily or hourly basis, if you're running thousands of machines - you need to know about it right away."
Massie and his colleagues at Millenium built the Ganglia tool to serve as a much more lightweight and easy to use solution than what was then available with other SNMP tools. Leveraging multicast, Ganglia is basically a "list-and-announce" protocol where only hosts that are subscribed receive the packets -- and it provides a much easier way to monitor (over any geographic distance) as groups of machines are brought up or taken down.
"The low level monitor in the cluster can use multicast or unicast, and then it distributes the clusters' statuses using XML," said Massie. "So you can have your local monitoring domains, and then link them all together by pulling the XML streams together."
Ganglia already has pervasive use in the high performance community. A simple web search will show hundreds of Web sites that are pulling Ganglia feeds. The Grid 3 project used Ganglia to monitor a computational grid with more than 2000 CPUs at 25 sites distributed throughout the United States and Korea. Many commercial vendors, like Dell, are bundling ganglia into their business solutions software.
The fact that you can parse the XML feeds from Ganglia also makes the solution very friendly to plugging into other types of monitoring tools.
As large companies are increasingly creating server farms of thousands of servers, new server management and monitoring requirements are surfacing. On the monitoring side, polling breaks down after a few hundred servers, so you have to go to an interrupt-driven architecture with "list and announce" protocols. Also, aside from the technical issues, traditional monitoring solutions are prohibitively expensive when you roll out hundreds of servers at a time.
For these reasons, Ganglia will be a very interesting technology to keep an eye on as clustering continues to become more pervasive in enterprise IT.
Posted by Dave Rosenberg on March 28, 2006 01:34 PM
March 27, 2006 | Comments: (0)
Open Sourcing my Desktop Linux Summit session
I am speaking at the Desktop Linux Summit on April 24. In the spirit of community I hereby offer to share my content topics with our kind Open Sources readers, take all suggestions and follow whatever path people would like. Just remember we are there to talk about Linux on the desktop and that I am a business guy. I hesitate to go down the unconference path-it's too hard to exemplify value ahead of time for attendee dollars. It's also hard to command attention or intention when you can't even provide an outline as to what you are going to talk about. Sometimes free-form works, sometimes you need a bit of structure.
So, I hereby open source my session. Please place any suggestions and requests in comments. I will be checking regularly over the next several days. If no one makes suggestions, prepare for me to discuss late 80's heavy metal for 45 minutes.
A few topic ideas:
- OSDL Desktop Survey
- Update on the Portland Project
- Open source business productivity tools
- Standardizing on a distro (for business deployments)
- A common installer for desktop Linux (based on Neil McAllister's article)
- The struggle to deploy desktop Linux in a Windows shop
- Migrating from MS Office to OpenOffice.org (or why I hate macros)
- Economic drivers for desktop Linux development
Posted by Dave Rosenberg on March 27, 2006 07:43 PM
March 27, 2006 | Comments: (0)
Open Source Is Not Just for Coders Anymore
Over at the Monster.com Tech Jobs Advice page, Allan Hoffman reminds us that understanding open source can be a career booster.
So you say your company doesn't run Linux or code with PHP? Don't make the mistake of thinking you're unaffected by open-source technologies such as these. Open source is tearing up the technology landscape. Ignore it, and you may be asking for trouble, even if your current job seems far removed from the world of open source.
And a quote from yours truly:
"Anyone that ignores the importance of open-source software is setting themselves up for a comeuppance, if not a total meltdown, at some point in the future," says Dave Rosenberg, principal analyst at the Open Source Development Labs, an organization devoted to accelerating Linux adoption. "Companies like Google and Yahoo are using open-source software to run entire infrastructures. The world is leaning toward openness, not away from it."
Posted by Dave Rosenberg on March 27, 2006 07:18 PM
March 27, 2006 | Comments: (0)
I just finished reading Daniel Defoe's Robinson Crusoe. Early into it, I came across an interesting passage that struck me as highly applicable to my own life, and to open source.
Defoe writes:
I have...often observed, how incongruous and irrational the common temper of mankind is, especially of youth, to that reason which ought to guide them in such cases - viz. that they are not ashamed to sin, and yet are ashamed to repent; not ashamed of the action for which they ought justly to be esteemed fools, but are ashamed of the returning, which only can make them be esteemed wise men.Most incumbent, proprietary vendors now realize they have a problem: the world wants open source, and they don't offer it, at least, not in any meaningful way. Instead of "repenting" and quickly moving to open their code, however, as IBM, Novell, and some others have done, they continue to manacle themselves their sinking, proprietary ships, more beholden to their sales forces, engineering groups, etc. than to their customers.
A word to the wise from someone who has been through it before, several times: just do it. Open up. You can survive without big up-front license fees (the crack cocaine that keeps you from seeing reality: your traditional enterprise software model is broken and gone forever.
Be wise. Go open source.
Posted by Matt Asay on March 27, 2006 06:54 AM
March 27, 2006 | Comments: (0)
Lies your vendor tells you (CMS Watch)
It's a wonderful time to be selling (er, licensing, or renting subscriptions to, or whatever the business model is :-) open source. That said, it's amazing the sort of lies that you hear in the market by those incumbent, proprietary vendors as they vainly attempt to protect their turf. Tony Byrne over at CMS Watch has a great collection of lies/myths that vendors (both open source and proprietary) vendors spew to gain/maintain market share. While focused on the Content Management market, they're pretty applicable to any software market.
In order, with a synopsis of Tony's (and my) response, the lies are:
- "Our interface will sell itself"
Tony: Ease of use is in the eye of the user, not the vendor- "You only need XY thousand to get started"
Tony: Entry-level pricing tends to obscure the true costs to get to a workable product.
Matt: What Tony doesn't mention, but which has become clear to me as I sell against bloated systems like Vignette, Documentum, etc. is that there is a MASSIVE difference in both acquisition costs and implementation costs in proprietary systems and open source systems (the mainstream ones, at any rate, like Alfresco, Plone, Droopal, etc.). It really is a factor of 10X in many cases. I'm daily meeting enterprises that paid $500K+ for a Vignette/Documentum/FileNet/etc. system, and can't get it to work at all, despite hordes of consultants on the case.
For this, source code matters. In good projects, source code access is of critical importance to helping SIs grok and then implement the code. And it's highly useful for enterprises to be able to make an initial investment in a technology that costs them less than 10 full-time employees.
- "You can recoup your software expenses by re-assigning the web team"
Tony: Sorry, but software doesn't run itself. It's simply not the case that any software product is so easy to use that few to none need administer it.
- "Our open-source solution means you'll get off cheap" and "Our commercial solution is better supported than open-source alternatives"
Tony: He's right in saying that the "really big expenses lie in customization and integration" but, in my experience with quality open source projects (see above), he's wrong to argue that "some open-source tools will cost you more than their commercial equivalents." Well, he's not wrong, but it would be important for him to point out those projects that end up costing more. I've yet to see it.
With a commercially supported product like Alfresco, for example, we have customer after customer that has spent dramatically less on both the licensing costs and the implementation costs. And, again, we tend to be bidding against both greenfield and incumbent installations of proprietary software products that have run enterprises hundreds of thousands to millions of dollars in both acquisition and implementation costs, only to have the overpriced system not work.
Does this happen with open source? Sure. One of our prospective customers is considering a move off their open source system because it hasn't scaled or implemented well. But the cost of their failure is a fraction of what our proprietary competitors impose.
As for the support question, it all depends on comparing apples with apples. Typo3 support (a la Enomaly is going to be as good or better than you'd get from OpenText. Ditto, in another world, with SugarCRM support from Sugar and/or Corra Technology. Or Compiere in the ERP space. The important thing is to compare apples (commercial company support) with apples (commercial company support from the open source product vendor or their SIs).
- "Access to the source code protects you in an uncertain marketplace"
Tony: "...[I]n uncertain times, the best thing to count on is a large, vibrant user community -- something only a minority of commercial products and open-source projects can boast." Very true. Also true that source code access itself is not a huge comfort, except in instances where the customer is active in the code, which is more common than you might think....
- "No requirements? No problem! Our business analysts can get you started"
Tony: This lack of requirements points to a problem in the enterprise buyer's business, something that software can't solve.
- "Most enterprises deploy our solution within 4-6 weeks"
Tony: "Most enterprises deploy a full-blown CMS over the course of a year. Sure, you can implement smaller projects and departmental pilots over the course of say, 3-4 months."
Matt: I think this is largely true of most software markets. Software is only part of the solution - tying it into an enterprise's existing business processes is where the real time (and expense) comes in.
- "Our migration scripts will take care of your existing content"
Tony: "Garbage in, garbage out." As Tony implies, migration is never "point-and-click" simple.- "Our product is better than Vignette, for a fraction of the cost"
Tony: "[Th]ere are tiers in the marketplace. Some products -- like Vignette -- are geared to tackle big, complex problems. It's true that buyers frequently overspend on CMS products, including Vignette, when they could have gotten away with something simpler and cheaper."
Matt: Actually, the "lie" above is actually 100% true in some instances. Again, it depends on which open source product you have in mind. Is Sugar easier to install and administer than, say, Siebel? Absolutely. Does it depend on what the enterprise's needs are? Of course. Same with MySQL, JasperSoft, Zimbra, etc. But I think, on balance, enterprises do themselves a huge disservice by not considering open source alternatives. They tend to be much cheaper, more stable (for the good - read: actively developed with a robust community - open source projects), and easier to work with.
- "We're the only product with..."
Tony: This sort of product differentiation tends to be fleeting.
Matt: Real competitive differentiation tends to be customer service, at the end of the day. Open source is licensed in such a way that it must be more customer friendly. I don't get paid on a day to day basis unless I'm delivering superior customer support - there is no big, up-front license fee to grow fat and lazy on....
Posted by Matt Asay on March 27, 2006 06:05 AM
March 24, 2006 | Comments: (0)
Open source valuations: Wither Mother Earth?
This from today's Investors Business Daily story on the rising valuations for open source startups.
How do you put a price on free?For the record, I may not be random, but I am a crank. :-)That's the question facing investors in open-source software firms. Few doubt that such companies are reshaping the software landscape. Their products -? based on publicly available code and developed by global open-source communities - are giving pricey commercial software a run for its money.
But since the underlying software of open-source companies is free, analysts wonder if they're worth multimillion-dollar valuations from investment funds and big-name suitors. Even fans of the open-source movement see signs of froth.
"I suspect we're in the midst of another bubble time for open-source companies and would do well to be prudent in our expectations," wrote Matt Asay, on his Web site.
He's no random crank. In addition to organizing the Open Source Business Conference, he runs U.S. business development for open-source firm Alfresco.
The story does a good job of raising an important issue: is most of the money (and there's a lot of it - $1B and growing, by my calculations) going into open source dumb money? Not dumb in terms of the VCs funneling the money to startups, but dumb in terms of the business thinking underlying the startups? Kim doesn't think so:
Kim Polese, CEO of open-source firm SpikeSource, concedes that the deals might not make sense using traditional valuation benchmarks. But the old assumptions about return on capital might not apply when it comes to open source, she says.I think the world of Kim, but I disagree here. At the end of the day, a company must be measured in MONEY. Eyeballs are nice. But money is what attracts the public market.Case in point: Most users don't pay for the product. At the same time, the collaborative nature of open source cuts development and marketing costs.
Open-source firms "have a phenomenal user base and are a disruptive force," she said. "That can be worth a lot of money."
Open source companies that make friends but no money deserve the same bankruptcy that failing, non-open source companies get. Period.
Posted by Matt Asay on March 24, 2006 03:09 PM
March 24, 2006 | Comments: (0)
The Register is reporting that Check Point's bid for Sourcefire has been dropped after objections from US security agencies.
Federal agency objections to the security software tie-up centre on the implementation of Sourcefire's anti-intrusion software 'Snort' by the Bureau and Department of Defense, AP reports. In private meetings between the panel and Check Point, FBI and Pentagon officials took exception to letting foreigners acquire the sensitive technology.Company lawyers had tried to salvage the deal by offering to attach conditions intended to satisfy the Feds, despite execs feeling they were onerous. Agreement could still not be reached.
Maybe now Cisco or other will bid on Sourcefire?
Posted by Dave Rosenberg on March 24, 2006 11:24 AM
March 24, 2006 | Comments: (0)
As I was reading the leaked re-structuring memos (thanks Valleywag) from Microsoft's Kevin Johnson, I realized that company has a reached a point where it can no longer sustain it's size.
There are real issues associated with managing a company that large. One of the first things to happen are the never-ending cycles of re-orgs and restructuring. Microsoft is lucky that it has a strong business. Look at similar situations like Lucent and Sun or HP in the Carly days. It's hard to get work done when your job changes every six months.
Let me quote myself from back in September:
Previously:
I won't go crazy with the psycho-babble, but just for context, way back in 1974 psychologist George Field wrote about organizational libido in the Psychoanalytic Review and the fact that new organizations have a strong male ethos. However, a group that becomes successful while young and aggressive often becomes weak and effeminate as it matures, focused on process and architecture rather than staying aggressive. In my mind Microsoft seems to fit this description pretty well. Further, Microsoft also fits into the the concept of "group as mother" as Leroy Wells discusses in Advances in Experimental Social Processes Volume 2 (Wiley, 1980.)- Group tasks sometimes result in infantile regressed quality
- Fear of being fused with group vs. being isolated/seperated
- Ambivalence returns adults to infant roots
- Infants have love/hate feelings about mother (like Stewie on Family Guy)
- Group represents primal mother to the individual
- Infant experiences self as omnipotent--So far as it excites it's a good object which he loves, as far as it frustrates or hurts him it's a bad object
- Parts of self are projected onto leader
- Groups, like mothers, create strong conflicting ambivalent feelings of love and hateAny of these seem applicable? I think you could draw a correlation to each item and Microsoft's market dynamics (don't make me explain each point, just think about it). On the other hand, take the idea of the "group as a whole," where the group is more (and less) than the sum total of the individual members and the dynamics. Sounds a lot like open source, doesn't it?
- The group has a life of its own distinct from but related to the dynamics of the members
- Interactions form a gestalt (something such as a structure or experience which, when considered as a whole, has qualities that are more than the total of all its parts)
- Unconscious tacit agreements exist within the membership
Microsoft's Linux confusion
Microsoft leadership going down the tubes
The psychology behind Microsoft's market behavior
Posted by Dave Rosenberg on March 24, 2006 10:57 AM
March 22, 2006 | Comments: (0)
Plus ca change....Open source sales and marketing costs
Nick Halsey and I shared lunch at Novell's BrainShare conference yesterday, and fell to talking about the benefits inherent in an open source business model, real and imagined. One cherished benefit? Significant savings in sales and marketing costs. (Larry Augustin drove this point home at OSBC 2005, and John Roberts preaches this gospel frequently, in his OSBC 2006 keynote and elsewhere. I've said it, too.
Question: Is it true?
It's certainly true of open source companies at a certain stage in their existence. Alfresco, today, manages to sign marquee customers without stepping on an airplane, without having a hefty direct sales force, and without paying me a dime in commission. (This last part kind of hurts, though John did tell me I can have Arsenal season tickets if I hit a fairly massive number.... :-) But will we always be able to do this?
MySQL has increasingly hired direct sales people as its market heft increases. Buyers simply aren't going to spend $100K over the phone with someone they haven't met. (But MySQL mitigates direct sales costs in some exceptionally smart ways. Ask Mark or Marten some time how they do it.) Even SugarCRM is starting to hire more direct sales people.
Is this bad? Does it mean that the promise of open source - significantly lower sales and marketing costs, with those savings going into building a better product - is a sham?
No. It doesn't. What it does mean is that open source is a cheaper way to start and fund initial product development. It's a better, faster way to go from 0 to 60. But at some point, people, and not merely products, are important.
And, as Nick astutely observed, any successful company - open source or not - needs to learn how and where to spend sales and marketing dollars. Inside sales for sub-$5000 deals, for example, with direct sales looking at the $50-100K+ deals and the channel moving deals in-between. Open source simply lets you get farther on that inside sales team to build a base upon which the direct sales team can build the monster deals.
Posted by Matt Asay on March 22, 2006 08:09 PM
March 21, 2006 | Comments: (0)
Revising Oracle 10g Express Edition: Is "free $" enough?
Truth in advertising: I'm easily swayed by Monica Kumar. Monica is director of Oracle's Open Source Program Office, is very smart, and actually fun to talk with.
(This last thing should not be underestimated. I remain of the mind that people prefer to do business with nice people, not jerks. On that score, I also have to admit mea culpa for casting Oracle with a broad "jerk" brush. The funny thing is, everyone I know there now, I like. So, maybe Oracle isn't a mean, bullying company after all.... :-)
Anyway, I bumped into Monica at Novell's BrainShare conference this week in Utah. She gave me a few CDs for the Oracle Database 10g Express Edition and suggested I actually try it out, instead of spouting off about Oracle's imminent demise and failed open source strategies.
Done. Verdict? It's a great product. No question. But I still think Oracle needs to fix its marketing of the database. It's obviously intended to be a defense against MySQL invading the low-end of the database market (though I'm with Zack on this one, and wouldn't classify Yahoo!, Google, Travelocity, etc. as "low-end"). But it's missing something that I really do think matters, even if no one actually looks at the source code: code freedom. Here's the marketing spiel from the Oracle website:
Oracle Database XE is a great starter database for:Free as in cost is important. Very important. People have to be able to try out the product without an upfront outlay of cash.With Oracle Database XE, you can now develop and deploy applications with a powerful, proven, industry-leading infrastructure, and then upgrade when necessary without costly and complex migrations.
- Developers working on PHP, Java, .NET, and Open Source applications
- DBAs who need a free, starter database for training and deployment
- Independent Software Vendors (ISVs) and hardware vendors who want a starter database to distribute free of charge
- Educational institutions and students who need a free database for their curriculum
But MySQL, and open source generally, is much more than this. Freedom of code actually matters. There's something about a free system that does nothing more than lead me to an expensive, proprietary version that...doesn't work. And there's little reason that you should make your product free without also opening up the code (for the low-end version and for the high-end version, and perhaps particularly for the high-end version: No one is going to run a massive Oracle database, with sensitive, critical data inside, without paying for support.
So why not just open source the whole thing, Monica, and let people pay you for a supported, certified version? (50% of your revenues are tied up in support/maintenance, anyway, so you're well on your way.)
That would be a credible alternative to MySQL.
Posted by Matt Asay on March 21, 2006 04:13 PM
March 21, 2006 | Comments: (0)
Windows Vista won't make Xmas-Santa switching to Linux
Microsoft announced that Windows Vista is being pushed back to January 2007. If ever there were a time for Linux on the desktop to make it into the mainstream it's this holiday season.
"We're trying to crank up the security level higher than ever," Allchin said. "This came down to a few weeks. We're trying to do the responsible thing here."
Does that mean that Microsoft occasionally acts irresponsibly-releasing applications and Windows versions that are inherently insecure?
The group that will suffer the most from the Vista delay are the PC vendors who need to sell more gear during the holidays. While it's easy to say "I told you so" when it comes to reliance on Microsoft everyone recognizes the vast power MS has over manufacturers. Let me suggest that PC vendors once again consider alternate operating systems. Ubuntu and Linspire are obvious choices for both consumers and business users. We just need a good office suite and then it's time to starting shorting Microsoft stock.
Posted by Dave Rosenberg on March 21, 2006 04:10 PM
March 20, 2006 | Comments: (0)
Even-handed analysis of Ubuntu, Macintosh and Windows XP
Tom Adelstein just released a very objective analysis of Ubuntu, Macintosh and Windows XP desktop operating systems. Overall he came to a similar conclusion that I have mentioned in the past, and we found in the OSDL Desktop Survey--that big app vendors need to get on board for dekstop Linux to really take off.
Until commodity hardware manufacturers and Independent Software Vendors make their products available for Linux, the demographics in the desktop area will remain fairly constant. The exception remains in the mid-level desktop area. Analysts will continue to tout Windows for enterprises until ISVs port their software offerings to Linux or until adequate replacements exist.For both hardware and software manufacturers the prospects of creating offerings for Linux involve significant risks. For example, an ISV may not recover Research and Development costs since the Linux community prefers free software.
Secondly, the continuous development cycle concerns companies like Adobe and Intuit whose cost could increase with every release and upgrade of Linux. Ubuntu has a six month release cycle and replaces applications and libraries continuously. This scares ISVs.
If ISVs could come up with a solution to Linux's continuous upgrade cycles, they still have unknowns with regard to whether Linux would take off as a desktop alternative to Microsoft. Possibly, the availability of Adobe and Intuit products could supercharge Linux.
Previously:
OSDL Desktop Linux Survey Report
Posted by Dave Rosenberg on March 20, 2006 12:01 PM
March 20, 2006 | Comments: (0)
EnterpriseDB to replace Oracle at Sony Online
EnterpriseDB and Sony Online Entertainment announced that Sony has selected EnterpriseDB Advanced Server 8.1 as the database solution for its blockbuster online games and services. Sony Online operates an online gaming network for "hundreds of thousands" of subscribers. It will use EnterpriseDB initially for back-office applications, such as customer billing systems, and eventually for front-end systems that run its gaming service.
Posted by Dave Rosenberg on March 20, 2006 08:57 AM
March 18, 2006 | Comments: (0)
As the open source business ecosystem grows and matures, I'm finding it increasingly important for me to not only pitch my company's paid version, but also others'. Were I true Adam Smith, I'd argue that
...every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good.But I'm not. I'm with John Nash: I'm best served by helping myself AND my community. Smith would argue that my goal is to induce those around me, out of their own enlightened self-interest (he calls it "self love"), to serve my needs because it also serves theirs. I don't disagree.
But I think there's a higher good, and one that best serves my community and myself in the short term. And that is, again, by actively trying to build up my community.
So, back to open source. When I first started at Alfresco, my goal was eradicate barriers to selling as much of our products as possible. This often meant promoting Alfresco with the free, unpaid versions of the default components that go into our ECM solution, namely: MySQL and JBoss (or Tomcat). It wasn't that I didn't want to help these other companies, but rather that my self-confidence in being able to sell Alfresco wasn't strong enough to also take on the sales task of promoting these others.
A few months later, Alfresco is kicking tail (we have a customer and active pilot list that any company, open source or proprietary, would covet). I'm happy about this, of course, but I'm increasingly mindful that some of this success has come at the expense of the long-term viability of the open source ecosystem. The more I perpetrate the myth that open source is free (not ours, but others') the more I limit Alfresco's long-term market potential.
Should I be promoting MySQL 5.0 Pro over Community Edition? Absolutely. Do I need to promote it at the expense of an Alfresco sale? No. But I think I (and, frankly, we) can be doing a lot more to foster an extra-Alfresco understanding of why paid-for open source is a better investment than "in the wild" open source, at least where there is the option of commercial support.
As for systems integrators, they also shoot themselves in the foot when they quickly abandon a commercial product for a free open source project at the slightest sign of customer push-back. "The customer is always right" (a sentiment I believe) should not be an excuse for poor salesmanship. If our sales pitch is only successful when we're pitching "free" as in gratis, we're not worth our commission.
Posted by Matt Asay on March 18, 2006 11:14 AM
March 17, 2006 | Comments: (0)
Via The Economist-insight into how successful open source projects work-and the risks of non-management.
The "open-source" process of creating things is quickly becoming a threat-and an opportunity-to businesses of all kinds. Though the term at first described a model of software development (where the underlying programming code is open to inspection, modification and redistribution), the approach has moved far beyond its origins. From legal research to biotechnology, open-business practices have emerged as a mainstream way for collaboration to happen online. New business models are being built around commercialising open-source wares, by bundling them in other products or services. Though these might not contain any software "source code", the "open-source" label can now apply more broadly to all sorts of endeavour that amalgamate the contributions of private individuals to create something that, in effect, becomes freely available to all.
Posted by Dave Rosenberg on March 17, 2006 02:41 PM
March 16, 2006 | Comments: (0)
The Business Case for Open Source Management Tools
The Business Case for Open Source Management Tools
Guest Editorial by Ranga Rangachari, CEO, Groundwork
Vendor overshot is as bad today as it ever was -- particularly with management tools. On the one hand, chances are you're paying through the teeth for a lot of functionality that you'll never use (as your systems and networking tools are engineered to meet the needs of the largest enterprises). On the other hand, you're being confronted with solutions that themselves are a bear to install and configure (largely because of all of these complex features and add-ons that you'll never use).
HP's OpenView, for example, is a market leader in IT infrastructure monitoring, boasting an enormous feature-set and a hefty price tag. That's all well and good, unless you're a mid-sized business (or smaller) that needs a solid monitoring solution but is limited by budget and/or human resources with the necessary training and expertise to tame the monster. "Functionality overkill" has left many without invitations to the party.
The business case discussions around open source today tend to focus pretty narrowly on the acquisition costs. But one of the intriguing open source business discussions that you'll see continue to play out over the next few years is the idea that open source gives you more flexibility to deploy "just enough." When you use a monitoring tool such as Nagios, for example, you get much of the basic functionality that you would get from an OpenView, but you forego that extra percentage of features (that you pay dearly for if you go with a mature, proprietary monitoring tool).
So as your organization evaluates open source IT monitoring tools, the question is how much you need that extra percentile of features. For the incremental features you get from a proprietary solution beyond what is offered via open source tools, you face an order of magnitude more cost.
The very large enterprises are the ones for whom the 'nice to have' features were designed. For mid-sized companies, there's no question that the best value is at the knee of the curve, where they get a lot of that functionality, miss a few of the "nice to haves," but save an absolute ton of money on the acquisition cost, the configuration / installation, and the ongoing expertise required to maintain the monitoring tool.
Over the next few installments, I plan to talk about some specific open source-based IT monitoring and management tools that companies should have an eye on.
Posted by Dave Rosenberg on March 16, 2006 10:46 AM
March 16, 2006 | Comments: (0)
VNUnet is reporting that the UK has warned America that it will cancel its UK12bn order for the Joint Strike Fighter if the US does not hand over full access to the computer software code that controls the jets.
Lord Drayson, minister for defence procurement, told the The Daily Telegraph that the planes were useless without control of the software as they could effectively be "switched off" by the Americans without warning.
I am fairly certain that Microsoft doesn't provide source code to US or foreign government projects that use Windows. Kind of interesting...
Posted by Dave Rosenberg on March 16, 2006 09:03 AM
March 14, 2006 | Comments: (0)
ActiveGrid CEO Peter Yared is back with some more fodder in the discussion of Sun's hesitant (maybe even late to the game) embrace of scripting languages.
Confounding: Sun vs. Scripting Languages
During my five year tenure at Sun, Graham Hamilton, the Java CTO, killed every initiative to run scripting languages on the Java Virtual Machine.
These include 1999's "javab", which would have run Visual BASIC syntax on the JVM, and 2003's "Java 3", which would have supported optional typelessness for Java objects.
Clearly, the industry trend towards scripting languages like PHP and Ruby has finally had an effect, since Graham has recently sponsored JSR 292: Supporting Dynamically Typed Languages on the Java Platform". The time lag here is similar to the time lag it took Graham to support SOAP in favor of RMI after a ton of resistance, which Sun paid for dearly when they had minimal impact in the development of the web service standards we use today.
It's great that Sun has finally decided to support scripting languages in some way in the next couple of years. However it is clear that this change was done in a very begrudging way, considering that Sun's James Gosling and Tim Bray have recently taken it upon themselves to start publicly slamming scripting languages!
James Gosling, March 12: "There have been a number of languages coming up lately," noted James Gosling today at Sun's World Wide Education & Research Conference in New York City when asked if Java was in any kind of danger from the newcomers. "PHP and Ruby are perfectly fine systems," he continued, "but they are scripting languages and get their power through specialization: they just generate web pages. But none of them attempt any serious breadth in the application domain and they both have really serious scaling and performance problems."Tim Bray, February 21: "So here's my problem, based on my limited experience with PHP (deploying a couple of free apps to do this and that, and debugging a site for a non-technical friend here and there): all the PHP code I've seen in that experience has been messy, unmaintainable crap. Spaghetti SQL wrapped in spaghetti PHP wrapped in spaghetti HTML, replicated in slightly-varying form in dozens of places. Everyone agrees on PHP's upsides: it's written for the web, it's easy to deploy and get running, and it's pretty fast. Those are important advantages. And I'm sure that it's possible to write clean, comprehensible, maintainable, PHP; only apparently it's real easy not to."
Yet in January, James Gosling states in a News.com interview that "LAMP has certainly become quite viable."
What would be much more helpful is if Sun finally open sourced the Java Virtual Machine so that scripting languages could organically adopt a common JVM. With some leadership on Sun's part, Java and LAMP could merge onto a common virtual machine, and both would benefit greatly.
Previously:
Marketing to Dilbert: Mini-analysis of Sun
Sun coming out of death spiral-McNealy moving on?
Front End Integration-Lightweight Architecture Part 3
Enterprise SOA Apps Take Off on Lightweight Architecture
Google, Amazon, and Yahoo! point enterprise developers towards "lightweight" architecture
Posted by Dave Rosenberg on March 14, 2006 03:36 PM
March 14, 2006 | Comments: (0)
RedHat Integrated Virtualization
RedHat announced its "Integrated Virtualization" strategy this morning at a press event in San Francisco. The goal of the effort is to to develop an environment to simplify virtualization deployment for RedHat customers and includes partners AMD, Intel, Network Appliance and Xensource. RedHat also launched a Virtualization Resource Center to support the efforts.
"Typically, server utilization has been less than 20% of available capacity" said Tim Yeaton, EVP, Enterprise Solutions for RedHat. "Virtualization represents three important business and IT aspects: cost savings-from hardware and software to power and cooling; agility-the ability to dynamically manage workloads; and reliability-the ability to migrate and isolate workloads."
For it's part, Intel has found that just because the technology is there doesn't mean it's viable. "A consolidated server workload behaves differently, so customers need an integrated environment" said Lorie Wigle, Director or Services Technology and Initiatives Marketing for Intel.
The integrated virtualization platform marks a "day in the evolution of the RHEL platform" according to RedHat CTO Brian Stevens. "Customers want to to treat virtualization as an architectural element and treat it as a commodity." Fedora Core 5, targeted for release next week will feature a preview of virtualization features and aims to "take the rocket science out of virtualization" said Stevens. "Customers have told us that they want to seamlessly integrate virtualization into their environments." This sentiment was echoed by Bruce Moxon, Senior Director, Strategic Technology, Network Appliance. "This asset stack adds to simplified operations and the ability to realize the vision of utility computing" said Moxon.
Frank Artale, VP Biz Dev at XenSource "the hypervisor is just one piece of the stack-only an OS vendor can test the entire stack. Having Xen in the RHEL stack is important for the quality of the code."
Pricing support for virtualization technology was not disclosed. RedHat suggested that virtualization will be part of the RHEL pricing and therefore are unlikely to price based on the instance, rather on the platform. RedHat's Stevens didn't commit to specific management tools but suggested that virtualization would work with other existing tool sets.
The virtualization market has thus far been dominated by VMware. RedHat's integration and adoption of the Xen hypervisor into RHEL will help to broaden, and in some cases actually create the market for virtualization in Linux operating systems.
Posted by Dave Rosenberg on March 14, 2006 10:38 AM
March 13, 2006 | Comments: (0)
SOA Forum Session-any requests?
I am moderating "The SOA funding puzzle" session at the InfoWorld SOA Executive Forum this Thursday March 16 at 3:30pm. Joining me are: Peter Yared from ActiveGrid, Ed Vazquez from Sprint and Miko Matsumura from Infravio.
While I know that we have lots to talk about already I figured I would open source some of the content...so any takers, please post your questions as comments below.
Some example subject matter:
-What are the cost implications of moving to SOA? Or, not moving to it?
-When is it time to move to SOA
-Success stories/Horror stories
-Using SOA to divest yourself from older applications
-Getting away from the silos of IT
-Moving to grid and utility-web services standards
-Funding Strategies
--ROI, ROA,
--Revenue at Risk
--Loyalty Retention
-Application integration trends
Posted by Dave Rosenberg on March 13, 2006 05:08 PM
March 13, 2006 | Comments: (0)
Exciting sports and open source
Contrary to (American) public opinion, soccer/football really is the most interesting sport in the world. And a group of American statisticians have proven it. As E. Ben-Naim (Los Alamos) and colleagues suggest in this report [PDF], a sport is most exciting if the end result (Team A will beat Team B) is often in question. Using this as a measure, they find that soccer is the most exciting sport due to the unpredictability of its results.
As reported in Nature:
A sport's 'upset probability' is calculated from the number of timesI had no need for a scientific report to tell me that American football is boring. But I'm glad they've proven it, all the same.that the team with the worse record wins. The larger this quantity is, the more evenly matched the teams are - in other words, the more competitive the league is.
They find that, since records began - before 1890, in the case of English football - the chances of an upset have been consistently greater in English soccer than any of the American sports. The underdog wins 45% of the time in soccer, but just 36% of the time in American football.
Interestingly, however, the scientists find that soccer is, over the past 60 years, and especially in the last decade, losing some of its excitement. Why? Because results are becoming more predictable as money flows into the game. Chelsea, Manchester United, etc. - these teams regularly trounce their lesser-monied Premiership fellows because they can afford to acquire every player worth having. Not interesting to watch. In turn, this influx of money is turning the Premiership, in particular, into a league nearly as boring as the Italian Serie A league. The more money in a league, the higher the stakes, the bigger the incentive to play to not lose.
What's the open source analog? Open source is profiting, in part, from the big software companies' desire to not lose. They've sold about all they can sell, and have huge financial commitments to given customers and markets. As Clayton Christensen writes, their incentive is to keep feeding their existing customers with bloated, feature over-rich products. They consolidate (tantamount to the big soccer clubs purchasing all the talent) and then duke it out with other software hegemons. They have no incentive to play innovative soccer, as it were. Their incentive it to defend and eke out a 1-0 win or, worst case, a draw. There's too much money at stake to experiment.
Customers, for their parts, don't like this tedious IT any more than I like watching lazy soccer. Yes, enterprise buyers want predictability in their IT systems. But they also want innovation (product and business model), and they're simply not getting it from the hegemons. They're getting it from open source.
In short, open source = Arsenal. Enterprise bloatware = Juventus.
Posted by Matt Asay on March 13, 2006 07:07 AM
March 12, 2006 | Comments: (0)
Winning: Jack Welch on Strategy
I read so much content both online and off that I barely absorb anything, but there are a few simple principles from Winning by Jack Welch that I think are important to keep top of mind in a business. One side note is that the word strategy is rarely used correctly. Most times people really mean operational efficiency-it just doesn't sound as good.
Welch says: "Strategy is simply resource allocation. When you strip away all the noise, that's what it comes down to. Strategy means making clear-cut choices about how to compete. You cannot be everything to everybody, no matter what the size of your business or how deep its pockets."
Three Steps to Strategy
1. Come up with a big aha for your business—a smart, realistic, relatively fast way to gain sustainable competitive advantage.
Answer a set of questions called the Five Slides—so-called because each set fits roughly onto one page. This assessment process should take a group of informed people somewhere between a couple of days and a month.
The Five Slides:
What the playing field Looks Like now. (scoping out the competition)
What the competition has been up to (where is the competition going? are there new entrants?)
What you've been up to (scoping out yourself)
What's around the corner (where are the threats?)
What's your winning move?
2. Put the right people in the right jobs to drive the big aha forward.
To drive your big aha forward, you need to match certain kinds of people with commodity businesses and a different type entirely with high-value-added businesses.
3. Relentlessly seek out the best practices to achieve your big aha, whether inside or out, adapt them, and continually improve them.
Strategy is unleashed when you have a learning organization where people thirst to do everything better every day. They draw on best practices from anywhere and push them to ever-higher levels of effectiveness.
Posted by Dave Rosenberg on March 12, 2006 10:09 PM
March 12, 2006 | Comments: (0)
Ubuntu bug fix shows open source community in action
via Slashdot: An extremely critical bug and security threat was discovered in Ubuntu Breezy Badger 5.10 earlier today by a visitor on the Ubuntu Forums that allows anyone to read the root password simply by opening an installer log file. Apparently the installer fails to clean its log files and leaves them readable to all users. The bug has been fixed, and only affects The 5.10 Breezy Badger release. Ubuntu users, be sure to get the patch right away.
Admittedly, this was a pretty big security flaw, but it was patched in a mere 2 hours. Pretty impressive. I don't see Microsoft or Apple responding that quickly.
Posted by Dave Rosenberg on March 12, 2006 09:18 PM
March 12, 2006 | Comments: (0)
Surrounding yourself with people smarter than you
Early in my career, or as someone called it recently, "my tour", I had a boss who told me that I should always look to work with people who were smarter than I was. Jokes about my stupidity aside, it's something I've always taken to heart, and something I've always tried to practice in hiring. You never want to be the smartest guy or gal in the room. You want to surround yourself with people who are smarter so you can learn from them and depend on them. A few years with knuckleheaded co-workers and you too can easily become part of the bozo explosion. That's partly why I finally went to grad school, and a big part of why I went back to work at Glass Lewis where better than half the company have advanced degrees. Not that the degree matters-but often the thought process that comes along with it does.
Last week I was fortunate to spend 3 days with literally 50 of the smartest people (including Susan from Apache) I have ever met in my life as part of the Kauffman Fellowship Program finals. The KFP is a program designed to match VCs with potential candidates to join their firms and has been in effect for about 12 years. It takes about 6 months to get through to the finals and requires essays, interviews, recommendations and such-it's a serious deal. All of the VCs were very interested in open source-both as a movement and for business ideas. In fact, if you have a good idea, now is the time to get your act together and pitch it.
In case you are wondering, I didn't match with a firm, but I actually got several things which I think are potentially better: a bigger network, replete with several super-geniuses; several new start-up ideas; introductions to many VCs who are enormously interested in open source; and a serious ego deflation--I was not only not the smartest guy in the room, but I may have been the dumbest.
All in all, a great experience. Matt has been giving me a hard time about not blogging, but it has been a very hectic week.
Posted by Dave Rosenberg on March 12, 2006 08:11 PM
March 12, 2006 | Comments: (0)
I've been on a plane for the past 10+ hours, so forgive me if this comes across as inane gibbering. (I mean, more than usual.) A thought just struck me. I don't know that it's particularly novel, but after conflating A Beautiful Mind with Trollope's The Way We Live Now, as well as a small dose of Gladiator, here's what emerged:
There's far more money in abundance than in scarcity.Simple, right? Obvious, right? A platitude of the most banal kind.
And yet most businesses emphatically build on the very opposite theory: scarcity.
Copyright, patent, trade secrets. These things are designed to exclude, to protect for one's individual benefit. Very proper and Adam Smith-ian of us, no doubt, but also arguably detrimental to both those around us and ourselves.
Why? Because there's a lot more money to be made in a vibrant, big, growing market than there is in a controlled, small, stifled market.
Sure, some in closed economies make a lot of money. I doubt, however, if they make as much as they could in an open economy. A closed economy, almost by definition, has limits on the amount of currency that can be scooped up and consumed. An open economy, by name and by definition, does not.
Which brings me to open source. We have an opportunity here. We can narrowly focus on self-interest, company by company. This, so classical, Adam Smith-style economics would tell us, is the way to maximize the overall "pie."
But John Nash's equilibrium theory and common sense argue that in parallel with self-regard and self-seeking we should also seek the good of the group.
In seeking our own benefit we may tangentially benefit the wider population. But if we make enough room to maximize our own take while simultaneously seeking to do those things that will benefit the whole, I think we end up with a bigger market to monetize.
This means, for example, that it is important for any single open source company to have a strong open source ecosystem around it. The more open source succeeds, the more an individual player can sow from that success (and eventually reap). In the case of my company (Alfresco), we succeed to the extent that there are great open source databases, application servers, operating systems, etc. We could succeed without Red Hat, MySQL, SugarCRM, etc. But we can succeed much, much more in tandem with these others' success. And vice versa.
John Donne, then, was right. No man is an island, entire of himself, whatever Paul Simon might sing to the contrary. It pays to fund abundance. If you're an open source company, it pays to selflessly/selfishly strengthen open source projects and open source commercial entities. It's just good business.
Posted by Matt Asay on March 12, 2006 09:34 AM
March 10, 2006 | Comments: (0)
Seems David Patrick, vice president and general manager of the Novell's Linux, Open Source Platforms and Services Group is pulling the ripcord on his time at Novell to be replaced by Roger Levy, an outsider from Lucent.
Novell has replaced its lead Linux executive for the third time in less than two years, which is likely part of why the company continues to struggle in getting real value out of the Linux business. I still think Jason is right. There is a ton of value there but they continue to have a hard time converting it to marketable products. Kinda makes me wonder how the Lucent guy will do since Bell Labs was notoriously bad at marketing their inventions--not unlike Novell right now. Trust me, I was at a Bell Labs startup as we burned through $60m without ever figuring out a product.
Posted by Dave Rosenberg on March 10, 2006 05:46 PM
March 10, 2006 | Comments: (0)
Personal rules of productivity
I had forgotten that I'd written this until the magazine arrived today. Oddly enough, it actually gives some useful information. I'll share it here, in case you're interested.
(This is from Connect Magazine, a Utah-based technology publication I've been a columnist with for the past year or two.)
Working in a large company, it's easy to forget how much real work there is to be done. In November I left Novell to join an open source Enterprise Content Management startup, Alfresco. I spent three years with Novell, and made the move with some trepidation.Nearly three months later, I've yet to catch my breath. There's something about working at a small company that demands efficiency and one's best work. Perhaps it's because there's nowhere to hide - if you don't deliver, everyone knows, because who would deliver in your stead? Or maybe it's because so much rides on so few that you just don't have time to take breathers.
Regardless of the reason, I don't know that I've ever been happier. It feels good to be productive, to be needed. I'm not fully persuaded, however, that I needed to wait until Alfresco to be a productive human being. Looking back, there are things that I could have done better in my time at Novell, and things Novell could have done better for me. I'd like to share a few here.
Employer Rule No. 1: Give employees ownership of real deliverables. Depending on the kind of manager you are, you'll either shy away from this because: a) you can do it better, or b) you don't want to overload your direct reports. Either is a mistake. In my experience, most complaints I've had with any of my past employers have related to having too little to do, rather than insufficient salary/title/etc. Give your employees meaningful work, and they will (eventually) love you for it.
Employee Corollary No. 1: Insist on personal accountability. Yes, it's scary to have people counting on you. It's much easier to coast along behind the scenes. But admit it: it's not very satisfying. Sloth never is. It's much better to be king of an infinitesimal pond than a nobody in a massive ocean. Go for the responsibility, not the title. (I've made this mistake on several occasions, and each time I've regretted it.)
Employer Rule No. 2: Less is more. You really don't need 10 people for two jobs. You need one. I've become a big believer in slow, organic growth in organizations. It's much better to hire one person and stretch them thin than it is to hire 10 people and have them struggling to find sufficient work to keep them occupied.
Employee Corollary No. 2: More is less. If you're in Sales, you "just need Feature X in the product to sell millions of Product Y." If you're in Marketing, you just need Research Report Z in order to do a quality competitive analysis, figure out the product direction to take, etc. If you're in Engineering, better hardware, more software, etc. is your complaint. In every case, you're wrong. You don't need more. You just need to work with what you have. There is a customer base out there for nearly any product; the best product marketing/competitive due diligence is done out in the field, getting your hands dirty (and not some overpriced tripe from an analyst who sits in an office all day); and the best code is often free, done on cheap commodity hardware. The less you have, the more resourceful you'll become - this makes us think like a real customer, who has to stretch an IT budget. Speaking of which….
Employer Rule No. 3: Every employee should be revenue-additive. This is the most important of them all. Marten Mickos, CEO of MySQL, once told me that he thinks business development is something every employee should do, all of the time. I didn't believe him then, but I do now. Every employee should understand how she contributes to the company's top and bottom lines, and should be held accountable for how she measures up. Everyone should be selling, developing product, marketing it, etc. No exceptions.
Employee Corollary No. 3: If you're not making money for your employer, you're a waste of money. If you don't understand how you fit into the Circle of Life for your employer, find out. Or figure it out. But don't just collect a paycheck. You owe it to your employer and to yourself to help defray the cost of your paycheck, as well as that of others'. The more revenue-driven we become, the more effective and the better our chances of improved future employment.
In closing, I wish I had lived up to the three employee corollaries while I was at Novell. Too often I blamed the company's bureaucracy, without recognizing that I was contributing to it. Or I complained about the company's direction without giving myself to the effort to improve it. I was a whiner more than I was a fixer.
I'm lucky to have landed somewhere that demands that I improve on this. But you can find this same fulfillment wherever you work. You just have to take personal, financial responsibility for your company, in whatever role you’ve been given. Good things will come to you if you take that role seriously.
Posted by Matt Asay on March 10, 2006 03:52 PM
March 09, 2006 | Comments: (0)
News: SCO's revenue slides while Novell's Linux revenue jumps
Steven J. Vaughn-Nichols is reporting that SCO's revenues continue to slide. No big surprise there, though it's almost funny to hear them continue to blame Linux for all their woes, rather than admit that trying to sue the entire planet was a poor strategic move:
Revenue for the first quarter of fiscal year 2006 was $7.34 million, as compared to $8.86 million for the comparable quarter of the prior year. In SCO's prior quarter, ending Oct. 31, 2005, the Lindon, Utah company's total revenue was just over $8.5 million.Meanwhile, a few miles north in Happy Valley, Novell has been battered due its Q1 earnings. My question: Why?SCO CFO Bert Young blamed the decrease in revenue on the continued competitive pressures on its Unix products and services from Linux....
Novell reports:
During the first fiscal quarter 2006, Novell recognized total Open Platform Solutions revenue of $56 million, which was up from $14 million in the year ago period. Total Open Platform Solutions included $43 million from sales of Open Enterprise Server (OES) and $13 million of revenue from other Linux* Platform Products and Other Open Platform Products. The year ago period did not include revenue from OES as it was introduced in the second fiscal quarter of 2005.Yes, this means (as the company spells out) that NetWare-related revenues continue their 11% downward slide, but this slide was well underway before I joined the company in 2002 and had continued apace until I left in 2005 (I take no blame or credit for that decline. :-)
But it also means that Novell is successfully transitioning customers to Linux (OES is NetWare services on Linux). And a 22% increase in SLES sales is nothing to sneeze at, either, even though, as IT Jungle points out, Red Hat is growing its Linux subscriptions twice as fast as Novell with 5x the revenues coming in.
Regardless of anything Red Hat is doing (and they're doing lots of things extremely well), Novell is finally seeing its long-promised transition start to bear fruit. If I'm a Novell customer or partner reading this earnings announcement, I'm hap