I'm putting together an Executive Radar event with Tim O'Reilly for this year's OSCON in Portland, Oregon. One of the sessions actually has me somewhat sleepless (literally - I'm typing this at 5:17 AM...), and results from a seemingly innocuous blog post Tim had a few weeks back.
Open Source and the Future of Asymmetric CompetitionThe topic has me excited because it promises to help unlock some of the secrets of Red Hat's, JBoss', and MySQL's success.
For years the software industry has largely competed on the basis of symmetry: Oracle versus IBM in databases; BEA versus IBM in application servers; etc. Feature wars, price wars, but not true competition wars. That is, competing by playing a different game, with different rules. Open source enables an alternative battleground upon which to compete, with community, code, and culture the new competitive tools. This session brings together the top open source executives deploying these tactics of asymmetric competition, to learn from their experience.
A few hints in advance (based on my own experience "selling free"):
- To succeed with open source one must truly embrace open source. In the past, I have advanced a 'both source' strategy wherein a vendor provides both open and closed code to take on proprietary software vendors. I think this was a mistake. It may have been the right initial move for the company I was with at the time, because it was the most dramatic open source move possible at the time (for cultural and business model reasons), but it is not a winning strategy over the long run. Open source must be open to disrupt a market. Hybrid models are a decent short-term fix, but they don't provide long-term advantage. (Note: Putting our money (and code) where our mouths are, Alfresco is moving to a 100% open source model. So yes, I'm walking the walk, not just talking a good game.)
- Open source is a marathon, not a sprint, and requires marathon-minded investors and management. The best companies (Red Hat, Google, and others) recognize that a software empire - a Rome - is not built in a quarter. Open source requires patience - the best open source companies take years to build properly, because they cannot subsist on big, up-front license fees. The subscription business model slowly strangles competitors - they might spend months or years laughing, but eventually they suffocate, asphyxiated by their own lame, top-heavy business models. But it doesn't happen overnight.
- Open source companies should aggressively exploit their open advantage. It used to nettle me to no end to hear Matthew Szulik (CEO, Red Hat) decry "open source pretenders" and hammer on the point, again and again and again, that source code matters. I hated the message because it was winning against me in the market. Red Hat, more than any other company, has used source code - its quality and its openness - as a wedge to drive into enterprise buyers. Free to try (lower the bar to tasting the Red Hat product), with an open model (pay for superior support and software certification, not massive license fees) that makes it easy to use an excellent product. Red Hat has - just as JBoss, MySQL, Alfresco, and other do - made a fetish of openness: open roadmap, open pricing, open code. The proof of its success is in its income statement.
These are just a few of the lessons I've learned from my years in open source (starting in 1998). I'm looking forward to hearing what Michael Tiemann (Red Hat), Marten Mickos (MySQL), and others say in this OSCON session. Hope to see you there.
Posted by Matt Asay on April 25, 2006 04:54 AM
