IBM asks Oracle customers why pay more for less value

The open core business model has its roots in the traditional software business model. Open source vendors have learned what works in the traditional software business model and applied it to the open core business model. This learning has not been a one way street. This is the first in a series of posts discussing how open source and traditional software vendors are, or should be, learning from each other.

A few weeks ago the IBM WebSphere marketing team wanted to launch a competitive marketing campaign to coincide with Oracle OpenWorld. After some discussion we settled on “more for less” or said differently, a focus on value and price as the key message for the campaign.

Simply offering a lower price than Oracle WebLogic Server (WLS) doesn’t tell the customer enough to select WebSphere Application Server (WAS). That’s why the “value” message is important. In this case, the value of additional programming models and standards such as service component architecture (SCA), session initiation protocol (SIP) and communications enabled applications (CEA). Or the value of an integrated web cache and not having to pay for backup servers or unused CPUs on a virtualized server.

I’ve seen too many open source vendors simply beating the “lower cost” drum. At times they also highlight “not proprietary” as if this is a highly valuable feature; compelling enough to choose product X over a proprietary product Y. I don’t see value in “non proprietary” for at least two reasons. First, with open standards, the risk of lock-in is reduced not with the availability of source code, but the availability of multiple implementations of the open standard. Second, since the large majority of open source vendors are adopting an open core model, the product for sale can be just as closed source and proprietary as traditional software.

To reach CIOs hearts and wallets, open source vendors should rethink their messaging to move beyond just cost to talk about the “more” that they are providing for “less”. Note that “more” can actually be less, as in less complex. For instance, MySQL clearly provides a “lower cost for higher value”, in terms of less complex and fewer administrators required, than Oracle DB for certain use cases. This is why Oracle continues to value MySQL as part of the pending Sun acquisition.

There’s also a longer term reason to focus on higher value for lower cost than lower cost alone. The latter paints the vendor into the low cost corner. Going forward it’ll be difficult to increase prices as the vendor increases value delivered to the customer.

“More for less” certainly resonates in today’s market. This is true for IBM as much as any open source vendor.

Follow me on twitter at: SavioRodrigues

PS: I should state: “The postings on this site are my own and don’t necessarily represent IBM’s positions, strategies or opinions.”

 

What to expect from Microsoft & IBM keynotes at JavaOne

While the future of JavaOne is anybody’s guess, it’s interesting to note that Microsoft and IBM are both delivering keynotes at JavaOne this year.  This is Microsoft’s first JavaOne keynote and IBM’s first in at least 2 years.

Microsoft’s Dan’l Lewin will be discussing .NET and Java interoperability.  It’s great to see .NET and Java interoperability get more industry attention.  For all the .NET vs. Java hype, at least one-third of customers (an old Gartner stat) have both .NET and Java.  In fact, I spoke to two customers in the last month who are interested in the WebSphere CEA feature pack and have a .NET front end speaking to a Java back end.  Good thing we designed for interopability from day one.

It seems there may be a cloud angle to the Sun & Microsoft announcement.  I’d hazard a guess that Sun and Microsoft will announce support for “Java Services” on Microsoft’s Azure Cloud, similar to the .NET Services currently supported.  It’s always seemed awkward to me that Azure would be a Windows/.NET centric (only) cloud.  Why would Microsoft choose not to address the one-third of customers that have .NET and Java in their shop?  I have to believe that Sheila Gulati, Steven Martin, Sam Ramji, Robert Duffner, Bill Hilf and others at Microsoft are thinking along these lines.

IBM’s Craig Hayman, will be discussing Extreme Transaction Processing (XTP) and Elasticity, two hot trends in the enterprise Java arena.  As core business applications built with Java face exponential user and transaction growth, enterprises can’t really rely on a “Fail whale” strategy.  Elasticity and XTP work hand in hand to address this growth with an eye on reducing costs across peaks and valleys.  Craig will also cover how IBM’s efforts in the open community, both through open standards, and open source, are driving developer productivity and innovtion.

I would have liked to attend JavaOne this year, but we’re taking wee Isaac to visit family in Ireland.  If he fares well on this 6 hr flight, the ~20hr trip to India is up next!  Clouds, Java, .NET and XTP will surely be waiting we get back.

 

Your applications need a dose of CEA – Peer to Peer Scenario

In my previous post I mentioned that the WAS V7 Feature Pack for CEA Beta can help you create some pretty awesome user experiences for multi-modal online interactions.  Well, what does that really mean?  I’ve already covered the Contact Center scenario.  Now, let’s discuss a Peer to Peer scenario.

Your loyal customers, Savio and Hilary, always use your travel planning website to decide on itineraries and book travel.

Savio is away at IMPACT for a week.  This leaves Hilary alone with their two month old.  Erik, Savio’s wise friend suggests Savio take Hilary on a vacation as a “thanks for putting up with me and rearing our child while I travel”.  Hilary loves to be involved in vacation planning.  But Savio’s in Vegas and Hilary’s in Toronto (See P.S. below).  Savio IM’s Hilary and proposes the vacation idea.  She’s in.   Now the tough part.  Deciding where, which flight, hotel and car.  It’s made tougher by the fact that their multi-modal interaction is not linked in any way.

If Savio and Hilary continue the interaction over IM, they’re forced to send URLs back and forth to keep track of the itinerary item that the other person is looking at.  But then, they’d also have to type “flight #348 will get us in on time” and similar information into the IM application.  But switching over from IM to the phone is no better because they still have to describe which page each person is on, (spelling out a URL over the phone…FUN!?!?), and which flight they are looking at etc.  Savio and Hilary are in for a poor user interaction no matter how you slice it.

We designed the WAS V7 Feature Pack for CEA Beta to address a scenario of two users trying to jointly make a decision through a multi-modal interaction.

Peer to Peer Cobrowsing
Let’s start the same scenario off with a Peer to Peer Cobrowsing Web Widget that is delivered in the WAS V7 Feature Pack for CEA Beta.  Savio would click on the “Invitation Link” button on your website and IM it to Hilary.  Once Hilary clicks the link, Savio and Hilary would be in a shared session together. There’s not software for Savio or Hilary to install to enable this shared session.  In fact, Savio and Hilary have individual sessions with WebSphere Application Server, so there’s an added layer of security.  Calling this feature Peer to WebSphere Application Server to Peer, while perfectly okay with the IBM Naming Police, seemed cumbersome.  Ease of use and security? Check.

With this shared session both Savio & Hilary can take control and direct what is shown on the other person’s browser window.  Both can highlight elements on the page for the other person to see.  Vastly improved user experience? Check.

And of course, if either needs more information before deciding, they could use the Click to Call feature enabled by the WAS V7 Feature Pack for CEA and enter into a joint session with one of your customer service representatives.  I described this scenario before.

Want to learn more?
Get the WAS V7 Feature Pack for CEA Beta here and the Getting Started guide, part of the Library materials, here. Also, here’s a good description of the widgets from Erik. Finally, if you need a copy of WAS V7, you can get a trial here.

Let us know what you think!

P.S.: Hilary and I planned our last trip sitting beside each other, with our individual laptops scouring Expedia for info. It was painful to keep track of the itinerary item that the other person was suggesting. So, while the scenario above describes two geographically separated users, I’m certain it’ll apply to two users sitting beside each other on a couch! What that says for our society is a different story ;-)

Follow me on twitter at: SavioRodrigues

 

Your applications need a dose of CEA – Contact Center Scenario

In my previous post I mentioned that the WAS V7 Feature Pack for CEA Beta can help you create some pretty awesome user experiences for multi-modal online interactions.  Well, what does that really mean?  Let’s start with a common scenario.

While searching for a life insurance policy online a user might want to call a customer service representative (CSR) about discounts since her mortgage is held by the bank.  More often than naught, the CSR wants to point the user to more information on the bank’s website.  But here’s the dilemma.  The user and CSR are involved in a multi-modal interaction, but there’s no synchronization between the two modes of communication.  If the CSR wants to direct the user to a specific page on the site, he must tell the user “okay, go to the homepage, on the left navigation bar, click Other Offers and then scroll half way down the page, look for a link that says….” Agreed, that’s an ugly interaction.

When the user decides to purchase life insurance, the interaction is no prettier.  While the user and CSR are speaking on the phone and both have browser windows open, there is no linkage between the two modes of communication.  The user still has to speak certain information which the CSR must transcribe into the application form.  There’s no visual way for the user to verify that the CSR has transcribed the spoken information properly.  Try saying “Savio Rodrigues” and the person on the other end of the phone not transcribe “Fabio Rodriguez” or “Flavio Rodriguez” or “Sabio Rodriguez”.  Not cool.

We designed the WAS V7 Feature Pack for CEA Beta to address a scenario in which a user and CSR are involved in a multi-modal interaction prior to the user making a decision.

Click to Call
Let’s consider the same scenario with a Click to Call Web Widget that you can embed in existing and new web applications.

Unlike third party hosted Click to Call offerings, the Click to Call feature in the WAS V7 Feature Pack for CEA Beta can be completely integrated into your application.  No need to spawn another browser window or advertise your hosted provider’s service.  Integrated and consistent user experience? Check.

Next, our Web Widget is integrated with your telephony infrastructure (so far, Cisco & Nortel).  Why pay a third party Click to Call hosted provider per minute fees for calls when you can leverage your existing telephony infrastructure?  Lower costs and driving higher utilization of existing resources? Check.

Finally, any information that you want to share between the user and the CSR through the Click to Call session, such as login information or account numbers, does not have to go through a third party.  Increased privacy & security? Check.

Contact Center Cobrowsing
Okay, you added a Click to Call widget to your application, now what?  Well, your customer enters her phone number and clicks on “Connect”.  The result is a shared session between the user and the CSR (through WebSphere Application Server).  Oh, and there is no software for the user or CSR to install. Security and ease of use? Check.

With this shared session both the CSR and the user can take control and direct what is shown on the other person’s browser window.  Both can highlight elements on the page for the other person to see.  No more having to say “scroll half way down the page and look for the link to the right of the picture of a monkey”.  Improved user experience? Check.

Two Way Forms
Next up, the dreaded filling out of forms over the phone.  But have no fear. Since you have a shared session between the user and CSR, there’s no reason that the form can’t be displayed to both parties.  But why stop there?  The Two Way Forms feature of the WAS V7 Feature Pack for CEA Beta lets both parties enter data into various elements of the form.  You can even restrict the data shown in a form field between the CSR and user.  For example, the user could type in and see their full credit card or social security number, while the CSR would only see the last 3 digits.  The user can even click to confirm that individual form field data was transcribed correctly by the CSR. Fewer frustrated users? Check.

Want to learn more?
Get the WAS V7 Feature Pack for CEA Beta here and the Getting Started guide, part of the Library materials, here.  Also, here’s a good description of the widgets from Erik.  Finally, if you need a copy of WAS V7, you can get a trial here.

Let us know what you think!

Follow me on twitter at: SavioRodrigues

 

Your applications need a dose of CEA

As Erik posted on Friday, the IBM WebSphere Application Server V7.0 Feature Pack for Communications Enabled Applications Beta (WAS V7 Feature Pack for CEA Beta) is now live.

Why should developers care?

Skills Reuse, Improved User Experiences, Lower Costs:
Well, with your existing Java skills, the WAS V7 Feature Pack for CEA can help you create some pretty awesome user experiences that improve the effectiveness of multi-modal online interactions and reduce costs. The WAS V7 CEA Feature Pack targets scenarios where users are interacting with each other through multiple modes of communications.

We’ve all been on a website, or for that matter, any web-based application, trying to find the right information before making a (purchase) decision. Often, multiple modes of communications (i.e. phone & website; instant messaging & website, etc.) are needed to obtain the information and make the decision.

Over the next two posts (here & here) I’ll discuss two key scenarios where the WAS V7 feature pack for CEA Beta shines. Saddle up…

Follow me on twitter at: SavioRodrigues

 

Transparent software products

Matt Aslett wrote a short but interesting post about transparency in the software industry.  He writes:

“Transparency has become one of the main buzzwords this year and I believe is critically important for traditional proprietary vendors as they attempt to participate with open source in order to reduce costs and benefit from collaborative development projects.”

I was set to agree with Matt’s assertion that transparency is important in our industry.  But I wouldn’t limit transparency to the open source sandbox, nor would I associate transparency with simply making code available (neither did Matt).

For instance, I believe that established vendors can learn from their open source inspired competitors who make project/product roadmaps publicly available.  I was more than a little surprised when IBM’s Projectzero.org team decided to externally host their roadmap, and all development activities, including design discussions and decisions.  Speaking to colleagues on the team, the user feedback has been extremely positive (save for the initial comments that the product was not open source, a conscious decision by IBM).

As a product manager, I would love to get ongoing feedback on new features or product improvement requests.  I know that customers want to provide this information; there simply isn’t a scalable way for customers to do so.  Established vendors get this form of product information from high-touch, non-scalable, interactions with their largest/loudest customers.  Putting a product roadmap in the community, openly asking for feedback and then delivering against the feedback could drive efficiency and happiness in the product planning, delivery and usage cycle.  Open source vendors know this and encourage users to get involved with product planning using low-touch techniques (i.e. a wiki).

Encouraging established vendors to open up aspects of their development process will be a key contribution from OSS to the software industry.

 

Sun Cloud – aka not a story about Sun & IBM

As much as I’d like to write about the rumored IBM acquisition of Sun, it’s probably best to leave that to others, for now.  I have no knowledge of any real or purported talks between the two companies.  I do know that if the deal goes through, I and many, many, many others will be impacted by it.  Hence, it’s best not to write something on the spur of the moment.

Instead, I’ll talk about Sun’s other reason for being in the news today; their Sun Cloud announcement at CommunityOne.  Aside from the catchy product name, how long did the marketing team work on that one ;-), I’m happy to see Sun move in this direction.  Sun is completely bang on with its vision of:

“a world of many clouds, both public and private, that are open and compatible.”

Sun Cloud won’t GA until later in the summer, so for now, we’re making predictions based on a marketing pitch, and arguably, a demo at CommunityOne (which I am not at).  Sun is promising to do much of what Amazon does today.  Sun believes that its Virtual Data Center (VDC) capabilities will differentiate it from Amazon. According to Sun:

“VDC offers developers a single management interface for staging an application running on OpenSolaris, Linux, and Windows. A drag-and-drop method is used for provisioning compute, storage, and networking resources via a Web browser.”

It’s also interesting that Sun chose to use a Creative Commons license for their Cloud APIs.  However, Glyn Moody tweets:

“Sun’s use of CC’d APIs to create an open ecosystem is interesting; doesn’t mean it’ll succeed, of course…”

I have to agree with Glyn.  With the future of Sun up in the air, it’s difficult for me to see a mass of developers or customers seeking Cloud services turning their back on AWS for Sun.  But, by the time the Sun Cloud becomes available, I suspect/hope Sun’s future as an independent company is more certain. Until then…

Follow me on twitter at: SavioRodrigues

 

Open source’s role in the recent software layoffs

By now, news of layoffs at IBM and Microsoft are being reported far and wide.  Some may take this opportunity to predict victory for open source.  However, I’m hard pressed to reach this conclusion.  Indeed, as an IBM Software employee, I have a biased view.  But hear me out.

IBM reported a 10.5% YTY increase in 2008 Software revenue to $22.1B.  Microsoft’s Server & Tools business grew 15% YTY in Q2-FY09 to $3.74B.  I call out the Microsoft Server & Tools business division because the majority of Microsoft’s products that compete against open source (Windows Server, SQL Server, and Visual Studio) reside in the Server & Tools division.  Yes, you could argue that Linux on the desktop was the driver behind the 8% YTY quarterly decline in Microsoft’s Client division.  But, it’s more likely, as InfoWorld’s Tom Sullivan points out, that Vista’s issues drove the decline in Microsoft’s Client division business.

None the less, when you look at the growth rates from IBM and Microsoft’s divisions that could compete against open source, 10.5% and 15% are very healthy growth rates.  This is doubly true when the size of the revenue (tens of billions) is taken into account.  So it’s difficult for me to see open source as the driver behind the layoffs.

I do however fear that these layoffs are a precursor to similar actions we’ll see from open source companies.  It’s been argued that open source will do better during the belt tightening due to lower initial costs.  However, what’s lower than $0?  I’ve had three discussions with friends whose companies have made the choice to go with open source solutions for projects that they’ve typically used commercial products.  These companies have decided to save costs by asking their internal developers to shoulder the cost of supporting the open source products.  So, while commercial vendors were kept out of these three deals, so too were open source vendors.  Clearly, three isolated examples don’t make a trend.  But I fear that we’ll see a lot more of this in 2009.

What are you seeing out there?

 

Change that matters

A few days ago James Governor linked to Tim O’Reilly’s earlier comments about the things startups should work on:

“Tim mentioned earlier this week during tough times it’s important to work on things that matter.”

A few minutes before reading the post, I had finished reading Sam Palmisano’s email to IBMers about “A Smarter Planet” vision.  Sam’s vision isn’t a roadmap for IBM’s business.  Rather, it’s a roadmap for every company, government and individual.  It is unequivocally about “working on things that matter”.  Sam asks us to consider:

Energy waste: Losses of electrical energy because grid systems are not “smart” range as high as 40 to 70 percent around the world.

Impact of gridlocked cities: Congested roadways in the U.S. cost $78 billion annually, in the form of 4.2 billion lost hours and 2.9 billion gallons of wasted gas – and that’s not even counting the impact on our air quality.

Antiquated healthcare systems: In truth, it isn’t a “system” at all. It doesn’t link from diagnosis, to drug discovery, to healthcare deliverers, to insurers, to employers. Meanwhile, personal expenditures on health now push more than 100 million people worldwide below the poverty line each year.Inefficient supply chains: Consumer product and retail industries lose about $40 billion annually, or 3.5 percent of their sales, due to supply chain inefficiencies.

How our planet’s water supply is drying up: Global water usage has increased six-fold since the 1900s, twice the rate of human population growth. 1 in 5 people lack access to safe drinking water, and half the world’s population does not have adequate sanitation.

These are wicked problems to tackle to be sure.  But these are problems that each of us in the IT industry can help address.  Sam explains why we can attack these problems now:

First, our world is becoming instrumented: The transistor, invented 60 years ago, is the basic building block of the digital age. Now, consider a world in which there are a billion transistors per human, each one costing one ten-millionth of a cent. We’ll have that by 2010. There will likely be 4 billion mobile phone subscribers by the end of this year… and 30 billion Radio Frequency Identification tags produced globally within two years. Sensors are being embedded across entire ecosystems – supply-chains, healthcare networks, cities… even natural systems like rivers.

Second, our world is becoming interconnected: Very soon there will be 2 billion people on the Internet. But in an instrumented world, systems and objects can now “speak” to one another, too. Think about the prospect of a trillion connected and intelligent things – cars, appliances, cameras, roadways, pipelines… even pharmaceuticals and livestock. The amount of information produced by the interaction of all those things will be unprecedented.

Third, all things are becoming intelligent: New computing models can handle the proliferation of end-user devices, sensors and actuators and connect them with back-end systems. Combined with advanced analytics, those supercomputers can turn mountains of data into intelligence that can be translated into action, making our systems, processes and infrastructures more efficient, more productive and responsive – in a word, smarter.

Some early examples of success:

Stockholm’s smart traffic system has resulted in 20 percent less traffic, a 12 percent drop in emissions

Smart food systems – such as one now running in the Nordics – can use RFID technology to trace meat and poultry from the farm through the supply chain to supermarket shelves.

Smart healthcare can lower the cost of therapy by as much as 90 percent – as ActiveCare Network is doing for more than 2 million patients in 38 states, whom it monitors for the proper delivery of their injections and vaccines.

James has a great post linking Sam’s initiatives to those from president elect Obama.  However, the linkage is fortunate, yet coincidental. Democrat or Republican, the problems we face need everyone’s efforts. My favorite quote from James’ post:

“Sometimes IBM’s obsessive desire to work on the toughest problems seems wrong-headed, and leads to complexity. But this time around I feel things could be different. Why? Because IBM is choosing to work on exactly the right problems”

I encourage you to listen to the speech here.

Most days I’m happy to be an IBMer.  Days like today, I’m proud to be an IBMer.

 

Microsoft and open source: Choosing wisely

I have long written about the opportunity for Microsoft and Open Source.  Heck, I even suggested that Microsoft should buy Red Hat (fat chance…but just imagine the possibilities ;-).  Over the past two years, Microsoft has continued to embrace open source.  Is Microsoft anywhere close to the position that IBM or Sun have achieved in the hearts and minds of open source proponents?  Nope, nowhere close.  Will that change?  That’s difficult to say.  I’m sure that Microsoft will adopt open source into their business model as much as IBM has (maybe not to the degree of Sun – because, to me that doesn’t make business sense…if you ask me).  But will “the community” give Microsoft the kudos for adopting open source more wholly?

InfoWorld has a great interview with Horacio Gutierrez, Microsoft vice president and deputy general counsel for Intellectual Property and Licensing.  I suggest reading the whole interview, but here’s a piece that really caught my eye.  It’s proof that Microsoft “gets it” when choosing between Open Source and Closed Source software. Mr Gutierrez is quoted:

“For example, it is harder and harder to continue to define the world of software as a world divided between open source companies and proprietary companies. The truth is that today we’re all mixed source companies. Every company that traditionally comes from an open source background has over time moved to the middle after realizing that in addition to the open source foundation, they also need proprietary offerings that will differentiate their services from others and therefore will enable them to build a viable business.”

Clearly, when faced with choosing A or B, Microsoft is realizing, much like IBM did over a decade ago, that A along with B is a much better option.