The metamorphosis of the software industry

One of the obvious changes after the crazy dotcom bubble-burst is that IT buyers are much more educated and demanding. They are done signing mega contracts. Instead, they would like to pay as they realize the value of what they are buying and as they see a clear return on investment. This has created a significant move away from monolithic multimillion-dollar software contracts and increased the popularity of pay-as-you-use licensing. Some fast movers like Salesforce.com have capitalized on these new business models with great success cannibalizing the business of giants like Siebel.

The consequence of these aggressive business models and the rising success of open source is that traditional software vendors (such as SAP and Oracle) started applying steep discounts to their software licenses to get new business. During the antitrust trial in 2004, an Oracle executive admitted that they were prepared to cut prices by 70%. The way I read this personally is that those giants realized that the real money is in the recurrent revenue produced by maintenance after the customer is locked in. CIOs often report publicly as much as 70 to 80 percent of their IT budgets are consumed by maintenance. During an earnings call in 2004, Oracle CEO Larry Ellison touted the company's maintenance (which includes fees derived from product updates and support) as an "extremely high-margin business." An article published by CNET shows how maintenance revenue manifestly exceeds (and keeps growing) license revenue for large software vendors.

By now I think I have made the point that the dynamics of the software business have changed and that maintenance, once a boring and unexciting, is where the money is coming from. What does this mean for open source? I think it’s very exciting news!

This simply means that many companies that provide high quality services around open source projects or bundles could potentially become billion dollar companies. Recently, we’ve seen several of those companies getting serious venture money. I was getting bored with Linux (Novell and Red Hat) being isolated open source successes. Seeing VCs inject money into those companies is very encouraging for open-source supporters who put their careers on the line to get their companies to adopt open source platforms. What businesses want is one neck to choke, one vendor to go to for its support needs so that they can focus on what they do best instead of wasting resources maintaining code they never wrote.

Do you think that one of the effects of open source is that software will never be sold the same way again? How many multi billion open source service providers will we see in the next decade? Do you think Orbeon, Optaros, SourceLabs or Spikesource have a shot at being as successful as Red Hat?

Useless alarm clock

I couldn’t resist talking about this “gadget” even if it has nothing to do with open source. Brown University students invented an alarm clock that monitors your brain activity and only wakes you up when the body is ready to get up (the optimum moment during light sleep). At first, I thought it was cool as I tend to wake up in a cranky mood sometimes but then I thought to myself, this is one of those completely useless devices!

Next time I have an important customer meeting at 9am, I will set up my smart alarm clock at 7:30am. The alarm will go off at 9:30am because my lazy body wasn’t feeling like getting up at 7:30am. I don’t think the customer will be very happy to learn that I just didn’t feel like waking up early enough for our meeting. On the other hand, if you have nothing to get up for, why do you need an alarm clock?

Then I thought this is one of those useless geeky gadgets that will stay in a university lab. Absolutely not! This article affirms that a company by the name of Axon Sleep Research raised money and is planning to market this clock for $200. Good luck!

What do you think? Despite the smart science behind this thing, do you think there is big enough market for this gadget?

Open source in the public sector, who’s lagging?

I came across this article published in early 2005, it talks about European governments and their position vis-à-vis open source. The study conducted on 371 local authorities across 13 European countries shows some interesting results. France was the leader with 71% local authorities using open source followed by Germany with 68% and Holland with 55%. In the UK the number was much lower, only 32%.

Since the article was published, things have changed in the UK. A new government funded initiative called the Open Source Academy was created to proactively push open source. The Academy brings together a consortium of 10 founding partners who, with support from industry, will launch a program aimed at tackling each of the major obstacles to open source adoption. It aims to provide a vehicle that will actively join up public sector work on OSS with European-wide initiatives during the year of the UK's EU Presidency.

The public sector in the UK is still lagging behind other European countries/cities (such as Munich, Paris or Norway) in terms of open-source adoption, but the open source academy aims at changing that.

In another article published by CNET, Stephen Shankland seems to indicate that the U.S. public sector is moving even slower even if open source is used by the Department of Defense, the U.S. Census Bureau and a few regional governments (like the city of Austin), the significant presence of Microsoft and the desire to boost U.S. companies is an impediment to open source adoption. According to Shankland, lobbying and advocacy group such as the Initiative for Software Choice (with members like Microsoft, Intel, and EDS) strongly oppose cases in which governments mandate use of or preference for open-source software which is what EU governments are actively doing.

How do you think open source is doing in the U.S. public sector? What do you think about the Initiative for Software Choice?

Open source experience is a big plus

I read this article about IBM trying to recruit Firefox experts to build new features complimentary to their On Demand middleware stack. IBM is not the first big corporation to approach Firefox gurus. Google hired a few months ago Darin Fisher and Ben Goodger, the lead engineers for Firefox and recently added Brian Ryner. Beyond Google and IBM’s interest in hiring open source experts, I am starting to see a strong trend that makes experienced open source developers more and more desirable in the marketplace. It also works the other way around: Big companies who openly support open source projects use that “cool” image to their advantage to attract talented open source developers.

What do you think? Did you ever get a job thanks to your open source experience? Is your company interested to hire open source developers?

Google and Yahoo side-by-side

Not nearly as cool as the application I was really impressed with a couple of days ago, but this one can certainly be useful in some cases. When I run a search on Google, sometimes I wonder what results Yahoo returns for that same search. So I open up another tab on Firefox and run the same search on Yahoo. Than I switch back and forth to compare the results. I often do that to see how we're doing, I run searches on things like PresentationServer. I don't have to do this anymore. A guy from Norway by the name of Asgeir Nilsen solved this problem for me.

Say Hi to YagooHoo!gle. Definitely not a name that sticks in the mind (I would have picked a shorter name like GooHoo!). However, it was useful enough for me to bookmark it.

Do you like it? Are you going to use it occasionally?

Silicon Valley startup to piggyback on the success of Firefox

Former head of Marketing at the Mozilla Foundation Bart Decrem co-founded a company to support Firefox and offer assistance (money, technical assistance and hosting services) to add-on developers. Since its release, the open source browser Firefox has been downloaded 44 million times. "We believe that you can actually build a business on 44 million users," Decrem said.

Round Two’s short term vision seems to be the release of security and anti-virus software that is scheduled to ship in a few weeks. Longer term; Round Two plans to deliver services (such as blogging, social networking and email) as well as software that would turn Firefox into a web portal and compete with Yahoo, MSN and Google.

What do you think? Is Firefox doing fine without Round Two’s help? Do they have a shot at making money?

Open source licenses: is 58 enough?

With all the controversy around open source licensing I felt it was time to express my opinion.

Many people complain about what they call license proliferation. I went to the licenses section of the Open Source Initiative (OSI) website and found no less than 58 different licenses. My next reflex was to go the same section of the very popular sourceforge.net to find out if all these licenses were used. And numbers speak for themselves. The most popular license is the GNU General Public License (GPL) with 43051 projects and the runner up was of course the GNU Library or Lesser General Public License (LGPL) with 6965 projects. The other popular licenses including MIT, BSD, MPL and Apache (combined) are used by roughly 7000 projects. Other than these six licenses the others are used by a ridiculously low amount of projects. This begs the question; do we need all 58 of them? Is it reasonable for OSI to continue to approve additional licenses? Does it serve the open source community or is it a source of confusion?

Danese Cooper, who has been on the OSI board since 2001, says that OSI's goal was to get large corporations to participate and they have. Unfortunately they all wanted their own vanity license. In all fairness, she admits that they tried to use the Mozilla Public License but they had to re-author the license because the MPL has hard-coded references to Mozilla. The result is license proliferation and confusion...

On March 29 of 2005, I was happy to see that Intel (one of those large corporations) announced the withdrawal of their Intel Open Source License from OSI. "Intel has been studying internally the issue of license proliferation. One step Intel would like to take to reduce license proliferation is to have the "Intel Open Source License" removed from future use as an approved OSI open source license" Said Intel's attorney McCoy Smith.

At the same time I remembered that Sun (another large corp.) had submitted a new license to OSI in December of 2004 which was approved on 1/14/05. Great! We got rid of a license and another one was approved. My first reaction was that Sun’s move was stupid. So I did some homework and read Sun’s CTO Greg Papadopoulos’ post as well as the diffs between MPL and CDDL (available on Sun’s website) and began changing my mind. My understanding now is that Sun is trying to come up with a template that other vendors and project leaders can use instead of writing their own license. I will believe that when I see thousands of projects (other than OpenSolaris) on sourceforge adopting the CDDL license. I am willing to give Sun the benefit of the doubt on this one especially when big names like CA buy the template license idea.

Computer Associates is talking to Sun and IBM about creating a common commercial open source license for future projects. "We are actively looking at [Sun's] CDDL," said Sam Greenblatt, SVP with CA and in charge of open source at OSBC.

The final version will be a template license, Greenblatt said. The license should be finished by the end of the year.

Personally, I am waiting to see what IBM thinks of all this, they are the open source gorilla and the largest player of the commercial open source market. Today their position is all but clear: they are defending the GPL in court against SCO and they also have two other OSI approved open source licenses, the Common Public License and IBM Public License. Therefore, they may lean toward GPL, the CDDL template or something completely home made but I truly believe they will weigh heavily on this debate.

At Linuxworld 2005, several industry executives including CA's CEO John Swainson called for a clean up of the open source license system.

I am curious to hear where you stand on the open source licensing question. Do you see license proliferation as a problem, or does it serve a purpose? Have you experienced any frustrations either writing or complying with open-source software licenses? Do you think like me that IBM is in control in this debate?

1 + 1 = 11

Even though the focus of this blog is open source I couldn't resist sharing this application with you. This is what happens when you combine Google Maps with Craigslist.
A gentleman by the name of Paul Rademacher demonstrates the power of this combination. Cooler than cool!

Try it out!

What's OSH anyway?

We all know open source software (OSS), does OSH ring a bell? You probably guessed it. It stands for Open Source Hardware. Does it make any sense to you? Well, IBM seems to think it makes sense, check out this article, it's not a joke!

IBM's venture capital partner Juan-Antonio Carballo declared: "The open-source model is quickly extending from software to hardware, and it will provide a similar swell of collaborative innovation."

I am interested to hear what you have to say about this one; do not hesitate to post a comment.

Is Linux homeless?

In Q1 of 2002 Linus Torvalds decided to use BitKeeper to manage the complicated and global development of Linux. Torvalds declared "BitKeeper has made me more than twice as productive, and its fundamentally distributed nature allows me to work the way I prefer to work - with many different groups working independently, yet allowing for easy merging between them."

Three years later Linus decided (read his recent posting) to move away from BitKeeper and temporarily revert to a less automated system based on email. Some significant disruptions in the Linux development community are expected. Linus took a lot of heat from the open source community due to the proprietary nature of BitKeeper. Among those who criticized Linus was Richard Stallman the founder of the GNU Project. In his posting Torvalds made it clear that he was not a big fan of centralized source code repositories like CVS or Subversion, "Don't bother telling me about subversion. If you must, start reading up on Monotone", said Torvalds. He is clearly leaning towards Monotone as a successor but no final decision has been made yet.

The natural question becomes, why is Linus creating distraction for Linux developers when everything was working well? Last week BitMover (maker of BitKeeper) announced they would discontinue the free product used by the Linux community citing that they were concerned some people were reproducing the capabilities of BitKeeper to make them available for free. BitMover's decision left the Linux community with a free solution that is not powerful enough to support their needs. More on this story soon stay tuned!