- Remembering Mansour Safai
- The Scalable OSS Business Model?
- One Way To Deal With Server Overheating
- Open Source Businesses Hitting Their Stride
- I think Microsoft has an OSS Strategy
- MySQL Workbench & the Future of the Software Business
- Oracle Gets Big
- Telecommuting at AT&T & OSS
- Leads are Not Enough in OSS
- Amazon Kindle: Kool or Krap?
November 30, 2007 | Comments: (0)
Mansour Safai, who passed away just over a year ago, is probably best known among the Java community for leading the development of the first Java Integrated Development Environment (IDE) Symantec's Visual Café.
I had the pleasure of knowing and working with Mansour for a number of years. Initially, we competed in the IDE space when he led a number of C++ projects at Symantec and I was at Borland working on Delphi. I had gotten to known Mansour during this time and was always impressed with his enthusiasm, technical depth and most importantly, his values. Mansour was a straight shooter. "Cards on the table," he would tell me, and I knew he was being completely honest and candid.
Mansour was one of the first to see the potential of Java and consequently Symantec was first to market with their Java IDE. He used it as a game-changing move to pull ahead of Borland, Microsoft and others. He leveraged all of the lessons he learned in building the Multiscope Debugger and other developer tools and shipped a Java IDE while the rest of us were still figuring it out. Mansour made Java accessible to millions of programmers around the world.
A few years later, after Symantec had spun out their tools division, Mansour contacted me. He had started a new company, called M7, along with some of the key developers from Visual Café. I found his enthusiasm and vision contagious, and so I joined. (The company was so small that we joked that we would now have to change the name of the company to M8, reflecting the number of employees.)
No matter what ups and downs there were (and there were plenty) Mansour always carried the vision of the company, which was to make developers lives easier. Mansour was relentless in continuing to lead the team. Not relentless in the sense of being a dictator or mean-spirited. I mean he was relentless in terms of giving the team his all and doing whatever it took.
Mansour cared deeply about the team he had built at M7 and he saw it through to a successful acquisition by BEA. He did this even while he was battling for his life.
Next week commemorates Mansour's birthday and his brother and sister Mammad and Massy Safai have started a memorial fellowship fund at Stanford University. You can find out more about this fund at www.mansour-safai-fund.org.
Posted by Zack Urlocker on November 30, 2007 10:30 AM
November 29, 2007 | Comments: (0)
The Scalable OSS Business Model?
I made the claim that the support-based OSS business model doesn't scale. Shaun (of JBoss fame), disagrees.
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Hi Savio,
Funny how your $250M and $500M numbers are where Red Hat was a while ago and where Red Hat is headed shortly. Don’t take silence as implied agreement that open source is waning. Let’s see where Red Hat is over next couple of years and see if you keep raising your numbers.
Anyhow, a couple of things for you to consider before you prance off all happy that the world agrees with you:
1. To get a better comparisions between open source models and proprietary models try multiplying OSS numbers by 5X since subscription business compares against maintenance business. This will get you closer to an apples to apples comparison. This is rough math of course.
2. Red Hat does not have the breath of product offerings as MSFT…or IBM for that matter. So comparing overall company revenues is not fair either. You work for a big gorilla dude…your numbers will always be big….doesn’t necessarily mean you’re better.
3. “The support-only OSS business model does not scale.”. Uhhh…disagree. The subscription model is the gift that gives day in/day out. It takes a while to build up that base, but if you keep renewals at a good level, it’s a very scalable model.
4. As you add more products to the portfolio, you scale since you have more value to offer customers…therefore your convos become more strategic.
Anyhow, I could go on…but maybe I’ll reserve for a blog of my own. ;-)
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Read Shaun's blog here.
PS: I should state: "The postings on this site are my own and don’t necessarily represent IBM’s positions, strategies or opinions."
Posted by Savio Rodrigues on November 29, 2007 05:39 AM
November 28, 2007 | Comments: (0)
One Way To Deal With Server Overheating
Looks like Microsoft has figured out one way to deal with data center overheating: Put the servers in Siberia.
Ok, I am sure there are other good reasons behind this possible move. But it does raise some interesting issues about thinking globally as you build out IT infrastructure. You need to think about where your web traffic is coming from, local skills, costs, access to low-cost power, reliability and a host of other issues. As we move to a more "on-demand" world for Enterprise 2.0 applications, these issues will become increasingly important.
Plus it also becomes a point of pride for local investments and doing business in other countries. Not to mention a possible training ground for developing internal IT talent.
Posted by Zack Urlocker on November 28, 2007 07:11 AM
November 27, 2007 | Comments: (0)
Open Source Businesses Hitting Their Stride
From my conversations with various open source companies, it looks like most are doing very well and headed into a strong end-of-year finish in Q4. While the cost savings are a key driver in adoption, open source is no longer considered as "good enough" when you don't have budget. In fact, I'm seeing a lot of cases where companies are chosing open source because of significant technical advantages in the offerings. Usually this comes down to better performance, ease of use, and scalability.
Part of this is due to the open source development model, but part of the advantage here may be because open source software has less "bloat" than legacy closed source products and usually a more modular architecture.
You could argue that these advantages are not inherent in the open source model. But I think that the open source model does lead to a more modular approach. Modularity makes it easier for people to contribute and customize the software to their needs. Similarly, the business model of open source companies is not focused on annual upgrade cycles. So there's less push to add unneeded features.
Of course, since open source does not always have all the features, you still need to make sure that your needs are met. But in my view, if your needs are within the mainstream, open source solutions typically do a better job. Better and cheaper.
Posted by Zack Urlocker on November 27, 2007 10:47 AM
November 26, 2007 | Comments: (0)
I think Microsoft has an OSS Strategy
Shaun Connolly from JBoss/Red Hat has a nice summary of Microsoft's Open Source Strategy. In the post, Shaun states:
"As much as I hate to say it, Microsoft could learn something from IBM's strategy. They make no bones about it: they work in the open source on piece-part components that they Bluewash into their closed-source products. While it's not a pure open source business model...it's clearly an open source strategy."
I think Microsoft has an OSS strategy.
It's not the one described in Bill Hiff's recent interview. That's the difference between how you run your business, and what you tell the press and competitors. Call me crazy, but I think that Microsoft's OSS strategy is "Grin and bear it". Okay, get up off the floor...Grin and bear it is a valid strategy if you know "it" isn't going to last forever. Yes, OSS is here to stay, but the competitive differentiation that OSS gives to an OSS vendor isn't infinite. The support-only OSS business model does not scale. I'm made the claim that this differentiation decreases as the OSS vendor starts to grow beyond $250M in annual revenue.
Since I've made this claim twice without Matt, Dave, or JBoss/RH readers calling me out, I'm going to guess that they agree with the claim to some degree. I *think* that Marc Fleury believes the same and said so much on the Open Season podcast. I found this on Fleury's RSS feed (via Google Reader), but it looks like the post itself has been moved?:
"I don't want to come across as the ultimate realist but as far as scalable business models go, we still haven't found anything better than a proprietary distribution of open source software."
Imagine that you are at Microsoft and see the competitive differentiation from OSS waning as the competitor grows closer to $500M. Would you rush out and change the business model that created a $50B company?
"Grin, and bear it": Not just a strategy for Toronto Maple Leaf fans anymore ;-)
PS: I should state: "The postings on this site are my own and don’t necessarily represent IBM’s positions, strategies or opinions."
Posted by Savio Rodrigues on November 26, 2007 04:13 PM
November 23, 2007 | Comments: (0)
MySQL Workbench & the Future of the Software Business
Marten Mickos emailed to point out the MySQL Workbench offering (a good FAQ here). As I've said before, MySQL gets it.
Why?
Well, in the eyes of commercial enterprise software vendors, the optimal result is for OSS vendors to stick to their "OSS religious" roots. An incredibly low % of OSS users end up paying for the software/subscription. This means that OSS Vendor A doesn't have the financial resources to close the feature/function gap vs. Enterprise Vendor B. That’s why growing an OSS business beyond $100M is more difficult than getting to $100M.
Yes, OSS is already competing with enterprise software, and innovating in certain aspects, especially in fast time-to-value and lightweight application scenarios. But if you think that most OSS products are ready to replace their commercial enterprise counterparts in higher-end deployments (hint: where the profits are), then we can agree to disagree. Is OSS growing towards the high end? Absolutely. But commercial enterprise software vendors aren't standing still. If OSS is to significantly close this gap we'll need to see a lot more investments in OSS product development. You can't get this scale of investments through "community contributors". These investments have to come from a larger % of customers paying for the OSS vendor's product (or from funds from an IPO).
I believe that MySQL is doing the absolute right thing in delivering MySQL Workbench as an OSS product, with a commercial version that builds on the OSS version.
This is the future of the software market; where vendors use a combination of OSS & commercial products to drive benefits for customers (paying and non-paying). <Note, we've been doing this with the IBM WebSphere Application Server business for the past 2 years now and our revenue growth speaks for itself.>
Burning boats is a great survival tip if you're lost in the wilderness....maybe not for running a software business ;-)
PS: I should state: "The postings on this site are my own and don’t necessarily represent IBM’s positions, strategies or opinions."
Posted by Savio Rodrigues on November 23, 2007 09:57 PM
November 23, 2007 | Comments: (0)
Last week's Oracle Open World event reminded me just how big Oracle has become. The conference pulled 43,000 people into Moscone Center and shut down traffic for several blocks around the convention center. While I would not say it was on scale with Comdex in its heyday, it was pretty impressive to see so many people attending a conference around just one company. Admittedly, this mega-event combines conferences from the many acquisitions Oracle has done in the last few years, such as PeopleSoft, Siebel and others.
There were some open source announcements at the conference, including Oracle's news of their Oracle VM offering, based on the Xen hypervisor also used by Sun, Citrix, Red Hat and pretty much everyone other than Microsoft and VMWare. CEO Larry Ellison was positive on the progress made by Oracle Unbreakable Linux, though with only 1500 customers, I'm not sure that it's making a dent in any existing Linux businesses. It's a good offering for current Oracle customers who want one-stop shopping, but I don't think too many companies beyond Oracle have done much in the way of supporting their variant of Red Hat. (And of course, that's a chicken and egg problem. Not enough users means no incentive for ISVs to test.)
Unfortunately, I missed the one open source panel that would have been interesting. Luckily, it's been blogged by Matt Anslett from the451 Group. (BTW, if you're not familiar with the451Group, I think they are the best analysts in the business. They get IT and they get open source. A rare combination!)
Scale matters in IT, especially at the infrastructure level. As Larry Ellison has said "they get big" over at Oracle. If you take away the marketing fluff, it's clear that Oracle understands scale. And being big doesn't necessarily mean boring. There are plenty of interesting technical issues involved in building large scale systems. Oracle is a partner with MySQL on the InnoDB storage engine and they've brought a lot of expertise to the InnoBase team to improve scale-out in the latest MySQL 5.1 release.
One nice side effect of a big conference is that they also get big-name talent at their customer appreciation party. As Lenny Kravitz said in his keynote, I mean, late night gig, "I don't know who's putting on this show, but y'all know how to throw a party." And I have the photos and videos to prove it.
Special thanks to Ken Jacobs (Dr. DBA) from Oracle for the hospitality!
Posted by Zack Urlocker on November 23, 2007 06:18 AM
November 21, 2007 | Comments: (0)
I'd love to understand the logic behind this:
"AT&T, a company that once was a poster child for telecommuting, is downsizing its long-running telework program and requiring thousands of employees who work from their homes and other virtual offices to return to traditional AT&T office environments, according to sources."
AT&T appears to be going in the opposite direction of open source software companies. When you have someone good, why try to make them move if they can be just as effective where they're living? In some cases, it is more effective to co-locate members or a team, and I seem to recall Interface21 going this route with 3 or 4 sites across Europe & North America. But for the most part, OSS works because you can tap talent wherever they are.
In the words of Thomas Friedman, the world truly is flat when it comes to OSS development.
PS: I should state: "The postings on this site are my own and don’t necessarily represent IBM’s positions, strategies or opinions."
UPDATED: The title of this post was edited to spell "Telecommuting" properly. I can't speld correctly in the morning. Sorry for my behaviour.
Posted by Savio Rodrigues on November 21, 2007 06:23 AM
November 20, 2007 | Comments: (0)
The formidable Mr. Asay has a nice post on the "remarkable JBoss revenue machine".
"JBoss' incredible lead generation led to 7,000+ qualified leads each quarter.....
This means that JBoss could hire "inside" sales people: people who spent most of their time on the phone or email, answering incoming leads rather than scouring the planet for people who would consider buying from JBoss. ....
Open-source companies are long-term businesses that harness the fruits of transparency to capture leads and sell value. Open source depends on effective monetization of Internet traffic, be that website hits, downloads, documentation views, etc."
These are valid points. My only question to Matt is why JBoss had to shift to the Fedora model if they were driving such remarkable revenues. Saying "Red Hat made them do it" isn't a good answer ;-)
Some quick math, JBoss had less than $30M in revenue in 2006. At $40k a deal (the mid-point of the middle category of revenue from the graphic on Matt’s post), JBoss would have had 750 paying customers in 2006. At 7k qualified leads a quarter that equals 750 / (4 * 7000) = 3% closing rate. A 3% closing rate is incredibly low. An inside sales rep should drive a 25%+ closing rate from qualified leads. Now don't forget that some % of those 750 customers are customers renewing from previous years, so the net new closing rate would be even lower. But I digest/digress.
Maybe the issue is when customers get something for free, you'll attract some buyers, but the majority will be locked into the "free" base price. Growing sales beyond the customers willing to pay for the value your OSS product delivers is challenging.
This is the Catch 22 of OSS.
The OSS business model is great to grow from $0-$50M, but very difficult if you're trying to get to $100M. Moving to the next step requires something like the Fedora model, where certain products are only available to paying customers. Starting with the Fedora model would alienate your early users and effectively kill your business. Sticking with the non-Fedora alienates your shareholders as the company attempts to grow to $100M+.
Posted by Savio Rodrigues on November 20, 2007 03:36 AM
November 19, 2007 | Comments: (0)
Amazon today announced their eBook reader, known as the Kindle. It's a paperback book sized device that can store a couple of hundred books and download NY Times bestsellers for $10 a shot over the wireless EVDO network. You can also subscribe to magazines and newspapers. Since it's got wireless built in, and a thumb keyboard, you don't need to sync with a PC to get more content. It has a nice black on white display that works well in daylight, using the same E-Ink technology as found on Sony's competing Reader Digital Book which costs $100 less.
For those who travel a lot, I could see this being quite a useful device, since you don't have to bring two weeks worth of books on a trip.
However, there are some drawbacks. First of all, it's a proprietary device, which is ironic since under the hood it's running Linux. It's not clear whether you can add books from project Gutenberg. (You can email PDFs, Word documents or JPG's and then amazon converts them to its proprietary format.) And even though it's got wireless and you can get Wikipedia, it's not a great general purpose browser. There's no RSS reader. Also, you have to pay to subscribe to blogs. Though it's not much ($1-2 per month), it could easily add up.
And you won't be able to get any arbitrary blog, just those that Amazon choses to sell. (Would Infoworld rate? Maybe. GuitarVibe? Doubtful.)
But the big kicker: It costs $399. That's a lot of dosh for a gadget. Who knows though? Maybe this will be on the gift list for IT staff this holiday season. Or do we wait until version 2.0? If anyone has used one, give us the details...
Update:
Meanwhile, the blogosphere seems divided on this one. Guy Kawasaki likes it. (And why not, they're making his site Truemors available via Kindle.) On the other hand Seth Godin thinks they missed the boat by not including his books and blogs for free.
Posted by Zack Urlocker on November 19, 2007 12:14 PM
November 19, 2007 | Comments: (0)
Gartner - Software licensing costs to decline
Andy McCue at Silicon.com points to a Gartner report that, in many ways, reiterates what we've all been seeing.
"Gartner has identified seven major trends converging to change software delivery models, reduce dependence on the giant application vendors and force prices down.These include business process outsourcing; software as a service (SaaS); low-cost development environments, such as China and India, combined with modular architectures and service-oriented architectures; the emergence of third-party software maintenance and support; growing interest in open source; the rise of Chinese software companies; and the expansion of the Brazilian, Chinese and Indian markets."
Regarding OSS:
"Although Gartner says open source won't topple the likes of IBM and Microsoft the analyst believes it will put pressure on traditional software margin structures, particularly in areas such as servers, operating systems, development tools and database technologies."
I've seen customers using OSS as a negotiation tool to get lower prices on commercial enterprise software. This will surely continue.
Captain Obvious, over and out.
PS: I should state: "The postings on this site are my own and don’t necessarily represent IBM’s positions, strategies or opinions."
Posted by Savio Rodrigues on November 19, 2007 05:37 AM
November 16, 2007 | Comments: (0)
Guy Kawasaki's Fake Steve Jobs Interview
Guy Kawasaki, prolific author, blogger, Garage Technology Ventures investor and the man behind Truemors, has posted videos of his interview with Fake Steve Jobs, Dan Lyons at a recent LinkedIn Q&A event. It's one of the funniest interviews I've seen as Dan talks about the origins of the blog, getting outted by the New York Times and more. But what I really want to know --who was behind the now retired Fake Larry Ellison blog?
Posted by Zack Urlocker on November 16, 2007 06:57 AM
November 14, 2007 | Comments: (0)
Red Hat & Hyperic Finally Made Me Happy
I previously questioned Red Hat's apparent lack of love for Hyperic. Today, Stacey Schneider, Senior Director of Marketing at Hyperic, tipped me off to a joint Hyperic & Red Hat announcement.
Stacey writes:
"Finally today we announced that Red Hat and Hyperic will be working together on the development of a common systems management platform.
As you know, back in 2005 was originally OEMed to create JON before the Red Hat acquisition. At the time, the software licensed was still closed and the software has not been upgraded since, rather JBoss and now Red Hat has been updating the software privately. The new project will update the software contributions from Hyperic to its latest software, contribute the additional code written by the JON team, and work jointly to create a roadmap of future features. And of course make it all open source! (GPL v2)
This new open source project is meant to create a repository of common services to be used in future versions of Red Hat and Hyperic products. Both companies will work to maintain, govern and extend management capabilities within the new open source systems management platform project."
Now, this is very cool news, and a great endorsement for Hyperic technology. The deal appears to position Hyperic as the de facto systems management provider for Red Hat customers. Choice is great, but it can sometimes work against OSS in the CIO's mind.
The deal is also an endorsement of Red Hat's community. Long-time readers may remember that I questioned the "endorsement of the JBoss community" when Exadel decided to move their development into the JBoss community. I questioned the endorsement because there had been funds exchanged, making this an acquisition rather than an endorsement of community A vs. community B.
This agreement, may lead to an acquisition in the future, but today, it's about one independent company agreeing to join forces and communities with another independent company.
Kudos to Hyperic & Red Hat for making this happen.
Posted by Savio Rodrigues on November 14, 2007 11:24 AM
November 14, 2007 | Comments: (0)
The market for server virtualization software appears to have gotten a whole lot more crowded this week. Not only did Oracle announce free server virtualization software at the Oracle Open World conference, but Microsoft and VMWare also made announcements of competing free offerings.
And this morning at Oracle OpenWorld Sun announced their plans for virtualization also, known as xVM with support from Intel, AMD, Symantec and MySQL among others. Rich Green, head of Software at Sun, demonstrated Sun's xVM virtualization server and the xVM Ops Center management software console with a live demo deploying a workload to some Sun servers in Denver. (Luckily, they had good connectivity, which is always a risk at a conference!)
They've also announced OpenxVM.org, a resource providing open source tools to support their effort. I'm on my way to the press conference to see what additional Q&A there is for Jonathan Schwartz on their announcements. I suspect a lot of the questions will be about Sun's announced partnership with Dell, who will now distribute Solaris. More on that later. Anyways, back to virtualization...
So add to all these VM newcomers the fact that virtualization is also available from Red Hat, Novell SUSE and from Citrix (who acquired XenSource), it's enough to make your head spin.
Why so many competing offerings? Actually, there aren't that many. Most of the virtualization software out there (except VMWare and Microsoft) are using the same Xen virtual machine monitor or hypervisor. And in fact, Xen is available in just about every major version of Linux. So whether you're using Citrix, Sun, Red Hat or Oracle's virtualization layer, it's basically the same core technology. That's good, since it means that the technology will likely mature faster. (Or at least, that's my bet!)
Microsoft's technology is a little earlier in its lifecycle and will come some time after the introduction of Windows Server 2008, the long delayed "Longhorn" release. Microsoft said they would make available their Hyper-V virtualization technology in August 2008 and that it will run "bare metal" and would not require users to run Windows Server 2008. So in theory that means Microsoft would support other platforms, including Linux. But we'll have to wait and see if Microsoft is serious about this. As it stands, most people put Microsoft at least a year behind the competition in virtualization. Despite some occasional PR from Bill Hilf, Microsoft hasn't really shown a whole lot of support for open source, but that could change if they start getting the mandate from their customers.
And why wouldn't they?
Posted by Zack Urlocker on November 14, 2007 09:20 AM
November 13, 2007 | Comments: (0)
Can Consolidation Be Good for CIOs?
Ben Worthen of the WSJ uses IBM's acquisition of Cognos to make the point that midsize tech companies are going extinct. The end result will definitely be a reduction in vendor choice.
While conventional wisdom says less choice is bad, this is not always the case. Last week at school we learned about a "famous" experiment where a major US grocery chain reduced 30% of products in a section of the store. When shoppers were questioned, 80% replied that there was no change, 16% replied that there was more choice and only 4% realized that there was less choice.
We also learned about a "famous" jam experiment. A taste-testing table was set up in a US retailer with two types of jam (trial A). Another table was set up at a later date with 5 different types of jam including the original two (trial B). The researchers found that 40% of shoppers sampled the jam in trial A versus 60% in trial B. However, 30% of shoppers purchased one of the jams in trial A versus 3% in trial B.
These experiments show the effect choice set size on people’s decisions. We like to say that we want choice. However, when the choices are narrowed, we feel that "only the best items are being offered to me". Furthermore, because of loss aversion, too much choice leads us to wonder if we are making the right choice. This self questioning often leads to making no choice versus regretting a poor choice.
But consider the overchoice problem for a typical CIO today. His/her choices are 5-10x more than 5 years ago because of the range of OSS offerings. Yet, the usage of, and revenue from, OSS is lower than we'd like to see. Could OSS overchoice be directing CIOs to make the safe bet and buy from an enterprise software vendor? In a few years there will only be a handful of enterprise vendors around. Narrowing the enterprise vendor choice set could make it even harder for the large # of OSS choices in a product category to win against enterprise software vendors.
Grant it, jam is different than software. Jam is spreadable.
Posted by Savio Rodrigues on November 13, 2007 09:46 PM
November 13, 2007 | Comments: (0)
I just read Colin Baker's article about a European OSS support provider named Credativ. The Credativ website claims:
"credativ support covers a large number of open source projects, including:Debian, Ubuntu, SuSE, Red Hat, Xandros, Mandriva, PostgreSQL, MySQL, Kolab -Groupware, eGroupware, Asterisk, Apache, Squid, Postfix, Exim, sendmail, Cyrus, SpamAssassin, ClamAV, Samba, OpenLDAP, Nagios, DRBD, Keepalived, Amanda, XEN, Gnome and KDE, OpenOffice.org, Firefox and many more."
They seem to have a very similar business model to OpenLogic. Apparently the news is that Credativ has been successful in Germany for the past two years and is now expanding to the UK.
It would be interesting to know what "successful in Germany" means. Without making any statements about OpenLogic's business model, it's difficult to argue that OpenLogic has been "more successful" than pure-play OSS vendors who own/control the code that they support. Owing the code allows these vendors to create special distributions (source or binaries) only for paying customers.
I am of the opinion that a support only business model is not viable in the long term. I could be wrong.
I don't know much about this company, so if you do, please post your comments.
PS: Matt, links in Colin's story, like, "supported distributions" point to your CNet blog, but there is no relationship between the link text and the blog post. Likely just linking typos.
PPS: I should state: "The postings on this site are my own and don’t necessarily represent IBM’s positions, strategies or opinions."
Posted by Savio Rodrigues on November 13, 2007 08:44 AM
November 12, 2007 | Comments: (0)
Third in a Series: IBM Acquires Cognos
Following on the heels of two major BI acquisitions this year by Oracle and SAP, IBM has announced the acquisition of Cognos for $5 billion in cash. This is a modest premium of around 9% for Cognos, but considering all that's going on in the industry, a good outcome. It's not clear that given the other recent deals that Cognos would be viable in the long term as an independent company. It also makes sense for IBM to provide the same type of "one stop shopping" as its rivals.
While Oracle is most well-known for its acquisition strategy with such high profile deals as Siebel and PeopleSoft, IBM has acquired 23 companies since February 2006 as part of its "information on demand" strategy. Other acquisitions have included FileNet (Content Management), MicroMuse (Network Management), DataMirror (Real-Time Data Integration), Watchfire (Security), Softek Storage (Storage Management), Webify (SOA), Telelogic (Lifecycle Management), WebDialogs (Web conferencing), Novus CG (Storage Analytics) to name a few.
Posted by Zack Urlocker on November 12, 2007 10:26 AM
November 12, 2007 | Comments: (0)
Actually READING the Mozilla Financials & Notes
There have been a few stories along these lines:
"According to Mozilla's 2006 financial records...last year collected $66 million in revenue. Eighty-five percent came from a single source - Google. But, despite a pledge to use Firefox revenue to support new open-source projects, the foundation gave away less than $100,000 in grants, according to the audited statement, or $287,000, according to Mozilla, in 2006. In the same year, it paid its chief executive, Mitchell Baker, more than $500,000 in salary and benefits."
Those numbers seemed out of whack, so I read a little more on the Mozilla site and financial report. Two points to consider from the Mozilla 2006 Financial FAQ:
"We planned 2006 spending on a conservative basis to make sure the Foundation remained sustainable amid the growth and change of becoming a much larger project. This meant we planned to spend income but not the basic principal of the Foundation in 2006 and perhaps 2007, until we have a good plan for the appropriate programs to put in place, and the people make good programs happen. It turned out that our investment income was greater than budgeted in 2006 as well."
"Mitchell Baker's 2006 salary is over-stated by 20%. The amount reported in the Form 990 includes approximately $100,000 for a salary increase and one time bonus for 2005 that was not finally approved and paid until 2006."
Let's start with Mitchell's salary. Why is that a huge concern? A friend of mine works for Doctors Without Borders (MSF). He told me that his UN counterparts make more than MSF employees, but that the UN field employees deserve it. The higher pay attracts higher quality people (amongst the people who are in it to help humanity). Many CEOs make far more than Mitchell and produce far less in terms of social or financial "good" for their organizations.
Next, increasing the Mozilla Foundation's asset base by ~50% (from $52M to $74M) is a smart thing to do while their deal with Google is still in place. The deal expires next year. It's better for the Mozilla Foundation to save now and be in a position to spend later even if the Google deal becomes less lucrative, or goes away, in the future. Would it have been wiser to fund random OSS projects just because there was cash available?
Give Mozilla more credit...these guys and gals rock and do good for us all.
Posted by Savio Rodrigues on November 12, 2007 07:06 AM
November 12, 2007 | Comments: (0)
We've kicked off our annual survey of MySQL users recently on the developer zone of the MySQL site. There are some new questions and some old questions so that we can gauge trends over time. For example in last year's survey we saw that:
-40% of MySQL users also use Oracle
-50% of MySQL users are using MySQL Replication
-Over 50% of MySQL users have been using MySQL longer than 4 years
-Over 50% of MySQL users plan to increase their usage in the next year
We get lots of feedback from our users and customers and the survey is also another way to influence the roadmap and development priorities going forward. So let 'er rip!
Posted by Zack Urlocker on November 12, 2007 06:37 AM
November 09, 2007 | Comments: (0)
Last week, Hyperic hosted a gaming party at their offices, with plenty of open source people there from MySQL, MuleSource, JasperSoft and others. Ross Mason, co-founder of MuleSource, flew in all the way from Malta, just to play some Wii Tennis. (Ok, maybe he did have some other meetings in town, but I'm sure this was the highlight.)
While I was quickly eliminated in the Wii Tennis matches, I had a good time playing the latest version of Guitar Hero III. Not as good as Javier, who obviously is not busy enough given his 200 note streaks, but still respectable enough to not get booted off stage. There was an impressive amount of musical talent on display. I think we will need to graduate to RockBand when that comes out. Dave Rosenberg on drums, Barry Klawans on bass (and theramin) and Javier and me on guitar. Who knows, maybe we can be as good as Deadguy was in its heyday.
Posted by Zack Urlocker on November 9, 2007 09:26 AM
November 07, 2007 | Comments: (0)
Red Hat put out a series of announcements showing how RHEL 5.1 has better support for virtualization using the Xen kernel and how RHEL can now be purchased "in the cloud" via Amazon's EC2 service. This is a good move by both companies since it helps position Red Hat as an innovator and it shows that Amazon's EC2 service lets you use the #1 Linux, thereby reducing possible compatibility or skills issues.
Amazon's EC2 and the related S3 storage offering are both ways of having hosted, on-demand infrastructure for scale-out applications. I'm not sure if these are getting mainstream adoption from IT organizations, but if you're looking at building a startup company and don't want to invest a ton in hardware, it's a good way to get started. As it matures, I have no doubt that the cloud-based computing model will become increasingly important for IT and that we'll need to update our notion of software to run optimized in such an environment. But it may be the case that adoption of these technologies sneaks in through the back door --despite IT --rather than with IT's blessings.
As an analogy, consider how Salesforce.com and open source technology in general have made their way into the enterprise. Many sales and marketing organizations that went with salesforce.com or other on demand applications likely did so because it meant they would not have to work with their overburdened IT staff. And since the price point was low enough (well under $100 per person per month) they could just take on the expense directly. My guess is in some cases, they only told IT after the fact. Heck, maybe this is true of a lot of innovation.
So maybe Amazon and Red Hat's latest announcement will enable a similar adoption of "name brand" Linux in departmental applications. This is completely speculative, but I'm curious as to what others think... Would you consider using EC2 without involving your IT department?
Posted by Zack Urlocker on November 7, 2007 10:39 PM
November 07, 2007 | Comments: (0)
The move away from commodity boxes running Linux continues. It's nice to see Red Hat getting in front of this market trend. Very cool news about RHEL being offered through Amazon's EC2.
"The combination of Red Hat Enterprise Linux and Amazon EC2 changes the economics of computing by allowing customers to pay only for the infrastructure software services and capacity that they actually use.Base prices are $19 per month, per user and $0.21, $0.53 or $0.94 for every compute hour used on Amazon's EC2 service, depending on whether customers choose a small, large or extra-large compute instance size, plus bandwidth and storage fees."
It's in limited private beta testing, but you can ask to join the beta here.
Posted by Savio Rodrigues on November 7, 2007 02:14 PM
November 06, 2007 | Comments: (0)
Matt Asay & Larry Dignan question whether Sun can grow. Matt believes that Sun needs a stronger software story in order to grow. Sun grew 1% YTY in the most recent quarter. Yay for open sourcing everything?!?
Sun has great hardware products. Their main revenue generating software successes have come from software that is tightly linked to driving more hardware sales. Solaris and Sun’s storage software are examples of this point. Like Sun, HP has great hardware products. Sure, HP does some software, but at the end of the day, the software (like OpenView) is tightly linked to driving more hardware sales. Sun is more like HP than its willing to accept just yet.
Sun's revenues are over $3B a quarter (~$14B for the year). Sun would need an additional $300M/quarter of software business to show 10% growth. Even if Sun swallowed Red Hat tomorrow, Red Hat's ~$500M in revenue would result in 3.4% revenue growth for Sun. One could argue that additional software could drive additional server revenue for Sun. It could, but customers have decoupled their software and server purchase decisions years ago, so there is no guarantee.
The future for Sun isn't in a stronger software story. Sun has never had a strong software story. While open sourcing everything makes for great PR, OSS hasn’t and won’t drive significant (near or long term) revenue for Sun. Do the math...sorry, it had to be said.
The best advice for Sun is to focus on what they're good at. Servers and storage.
PS: I should state: "The postings on this site are my own and don’t necessarily represent IBM’s positions, strategies or opinions."
Posted by Savio Rodrigues on November 6, 2007 08:53 PM
November 06, 2007 | Comments: (0)
Jim Starkey on Relational Databases
Jim Starkey, Senior Software Architect at MySQL, is featured in an online interview over at Dr Dobb's Journal. It's a short interview, but every question reveals insight into the Jim's thoughts on the relational model, SQL, security, standards and more.
For those who don't know Jim, he is one of the pionneers of the database industry and has implemented several relational databases in his career. Jim has always been an innovator, inventing the widely accepted notion of Blobs (binary large objects) and multi-generational versioning, a key innovation of InterBase.
Jim and Ann Harrison joined MySQL from Netfrastructure, the company they founded to work on more efficient use of DBMS technology for modern web-based applications. Since then, Jim and Ann have been developing the Falcon transactional storage engine which is essentially lock-free and has been optimized for large memory, multi-core CPUs.
If you're curious about the future of database technology, Jim is one of the guys to pay attention to.
Posted by Zack Urlocker on November 6, 2007 12:37 PM
November 05, 2007 | Comments: (0)
Red Hat and Sun Collaborate on Java
Sometime rivals Red Hat and Sun are collaborating once again, this time on the open source version of Java. Ace CNet reporter Steven Shankland has the scoop, as usual. Seems like good news all around. The community gets a more open, collaborative development process on Java, which should result in faster release cycles. Sun shows it's commitment to open source and gets the benefit of innovation elsewhere. And Red Hat continues to strengthen its JBoss offering. What's not to like? Oh yeah, it would have been nicer two years earlier. But still, this is good progress.
Posted by Zack Urlocker on November 5, 2007 10:39 PM
November 05, 2007 | Comments: (0)
Open Source Drives Google's Open Handset Alliance
The platform (dubbed Android) will be Linux & Java based. Don't expect to see phones that implement the platform until 2H08 (which means late December 2008). The Android platform (software stack) will be licensed under the Apache license 2.0.
A preview of the SDK will be available on Nov. 12, 2008. Surprisingly, the NYT article states:
"A week from today, the alliance plans to make available tools for third-party programmers, called a software developers' kit, Rubin said. But the group's core technology itself will not be made available under an open-source license until it is commercially ready sometime next year, Rubin said."
Compare the latter statement to this statement from the developer section of the Open Handset Alliance website:
"We view Android as a "living" platform and look forward to working with the developer community to continuously enhance and enrich the platform."
Huh? I'll post any clarification on when the project truly becomes open for outside contributions (Nov. 12th or sometime in 2008) once I find out.
An interesting question and answer from the Android FAQ:
"Q]If the Open Handset Alliance is giving it all away for free, how will the platform be differentiated? A] Because the Apache license does not have a copyleft clause, industry players can add proprietary functionality to their products based on Android without needing to contribute anything back to the platform. As the entire platform is open, companies can remove functionality if they choose. Applications are not set in stone, and differentiation is always possible. For example, if you want to include Hotmail instead of Gmail, it will not be an issue"
Using the Apache license is a very pragmatic decision. It's hard for me to believe that all these vendors would agree to participate if the code was going to be GPL'd.
PS: I should state: "The postings on this site are my own and don’t necessarily represent IBM’s positions, strategies or opinions."
Posted by Savio Rodrigues on November 5, 2007 10:11 AM
November 02, 2007 | Comments: (0)
Google Set to Announce Mobile Phone SW & Open Handset Alliance
Tom Krazit at News.com is reporting that Google will formally announce a mobile platform dubbed "Android".
Tom writes:
"A software development kit for what's being called "a complete mobile-phone software stack" is believed to be in the works and will be released relatively soon thereafter, the sources said. It's not exactly clear what kind of software will come as part of that stack, but it's said to include everything you need to run a phone."
Google is also expected to announce the formation of the Open Handset Alliance, which includes vendors such as Qualcomm, Intel, Motorola, Intel, Spring NTT DoCoMo, and others.
It's great to see Google herding cats towards a vision of "open handsets". The apparent lack of Nokia and RIM in the Open Handset Alliance is troubling. It's difficult to see any mobile phone alliance succeeding without involvement from Nokia (#1 overall) and RIM (leader in smart phone market & expanding into consumer space). But I guess you shouldn't bet against Google...especially when Google sees future revenue coming increasingly form mobile scenarios.
Posted by Savio Rodrigues on November 2, 2007 11:04 PM
November 02, 2007 | Comments: (0)
Will the Support Business Model Survive?
A while ago Shaun Connolly at JBoss posted an entry titled "What's in a Subscription". Shaun states:
"Put simply, a Subscription is comprised of: 1. Software bits 2. Patches and updates to the bits 3. Support in the use of the bits 4. Legal assurance"
I am beginning to wonder if, in the long term, the only truly scalable business model for OSS is one that incorporates #1 & #2 on Shaun's list. When you think about it objectively, purchasing a 'subscription' to get "Software bits" and "Patches and updates to the bits" is the model the software industry has been using for decades. The only difference with OSS is that 99% of your users are doing so without paying for the product.
Heresy, yes I know.
But look at the successful OSS vendors & their products (RHEL, SLES, SugarCRM, JBoss AS, and MySQL Enterprise) in the market today. Isn't financial success driven by access and updates to (specialized) software bits? Maybe other things were important to these vendors in the past, but at this point in their maturity, the major revenue driver is (simplified) access to (specialized) products baby!
If "Support in the use of the bits" was so critical to customers then a larger % of production users would be paying customers. OSS vendors wouldn't need to direct customers to a paid subscription as a means by which to get (a specialized version) of #1 and #2.
I'm beginning to think that Support *was* the key method to get customers to the table. Now that customers are more comfortable with OSS, Support by itself is not reason enough to purchase (or renew) a Subscription.
As I discussed in a prior post, things like copyrights & patents are vendor issues and should not become customer issues.
Anywho, my (draft) thesis is that, in the long term, the only truly scalable OSS business model starts with gated access to binaries/code and the patches/upgrades to said binaries/code.
Is the enterprise software business model the future of the OSS business model?
PS: I should state: "The postings on this site are my own and don’t necessarily represent IBM’s positions, strategies or opinions."
Posted by Savio Rodrigues on November 2, 2007 06:26 PM
November 02, 2007 | Comments: (0)
First Sanjiva challenged Dave's views (repeated by yours truly) that OSS vendors should focus on competing against the enterprise gorilla in the market vs. competing with each other.
Next, BEA decided to make his prior post on "whether BEA is screwed" redundant by trying to paint itself as a Web 2.0 firm.
BTW Dave, the press release is from Oct 8th...dude, that's over a month ago, and it's just a press release. Who reads those anyway?! ;-)
Anywho, all the best with your new blog at CNet. We'll be reading with interest! It's been fun working with you here at IW and look forward to bad mouthing you now that you're gone.
PS: I should state: "The postings on this site are my own and don’t necessarily represent IBM’s positions, strategies or opinions."
Posted by Savio Rodrigues on November 2, 2007 02:40 PM
November 01, 2007 | Comments: (0)
According to SD Times, the Software Freedom Law Center (SFLC) announced that it has reached a settlement with Monsoon Multimedia over its violation of the GPL. Monsoon had been distributing software from the BusyBox open source project without fully complying with the GPL license terms.
According to the settlement, the lawsuit has now been dismissed. The original developers of BusyBox are to be compensated with an undisclosed financial settlement and Monsoon agreend to make available all of its modified source code and appoint an open source compliance officer.
Thanks to Eben Moglen and the SFLC for pursuing this. Score one for the good guys!
Posted by Zack Urlocker on November 1, 2007 06:29 AM
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