January 2007


When this launches in June, Jazz.net is going to be quite cool!

Jazz is an open source project, kicked off by IBM, focused on providing tools that promote development for geographically distributed teams. (Remember, you have to wait until June to get your hands on it). IBM intends to open source a framework for geographically distributed team development, and 3rd parties will be able to provide extensions (like the Eclipse model). The software will work with Eclipse & Visual Studio. Here’s Danny Sabbah (IBM Rational GM) quoting a feature that sounds really cool and useful:

“or example, Jazz software will allow a programmer to send an instant message to a colleague with source code. Rather than see static text, the receiver could click to see where the code fits into the application, the original requirements and relevant tests.”

Not sure how they’re going to decide between features that sit in the open source product vs. those that are in the for-fee Rational product. Let’s hope that the Rational folks err on the side of including more value inside of the open source product. The strategy has been quite successful in growing the use of Eclipse, which in turn provides Rational (and other vendors) a larger customer base to sell higher-value offerings. Give more to get more.

Matt Aslett writes that Oracle may be considering Unbreakable Support for MySQL and that MySQL Co. is likely to IPO later this year.

When MySQL files for IPO, we’ll get to view their financials. We’ll get to compare their performance metrics against Red Hat (which, until now, has been the only pure-play OSS player with public financials) and traditional vendors. I’m willing to bet that their metrics will be (surprisingly) close to metrics from traditional software vendors.

BTW, in case we’re keeping score, yes, Oracle is already distributing MySQL with their Linux distro. But, Oracle isn’t providing support for the copy of MySQL that you get with Oracle’s Linux distro. Here’s my take on the Oracle support rumor (which could just have been a passing threat in an Oracle/MySQL meeting).

Unbreakable Support for MySQL is likely the first step towards an acquisition:
There’s really little long-term benefit from Oracle providing support to a competitor’s database. In doing so, you’re validating the competitor, and not really doing anything to “bury the competition”. With the Oracle Unbreakable Support for Linux, they’re going after a related market, and failure doesn’t have any direct competitive consequence. Sure failure means that Red Hat gets bigger, but that’s not a big deal (until/unless Red Hat acquires a leading open source database support provider). But failure with the MySQL support would result in a much stronger direct competitor (MySQL Co.).

The more likely option here is for Oracle to buy MySQL. After the acquisition, if Oracle tried to move the user base onto Oracle DB products, add restrictive support conditions, raise prices, etc. then an alternative support provider would have room to grow. Otherwise, MySQL customers would likely continue to get support for MySQL through Oracle. Oracle would need to consider the impact of the MySQL product set on the Oracle DB portfolio. Issues like, customer confusion, pricing, customer negotiation tactics, etc. However, I think Oracle could deal with these issues.

Worried about cannibalization? It’s going to happen to a certain degree, but the alternative is losing business to a competitor without a fight. Oracle can respond by giving customers choice. Cannibalization that occurs will be much, much, smaller than the potential revenue that Oracle can drive using a mixture of open source & traditional software. IBM took this approach with the WebSphere Application Server business (with great success) and Oracle could do the same with their database business.

The result would be two database platforms (MySQL & Oracle DB), which get closer over time, but likely don’t merge (at least for the next 5 years). Customers can choose (remember, choice is good) to use the light-weight MySQL product for a good portion of their needs, and the high-end Oracle DB products for other projects. Let’s not forget that the majority of Oracle DB customers will stick with Oracle DB for products that are already running today (i.e. “if it ain’t broke, don’t fix it”). And when these customers want to use something more light-weight, simpler to use, Oracle has an offering for them. Leave no customer behind!

After the acquisition, Oracle cold shift some of their development efforts away from Oracle DB (except in the high end product category) and put those resources into the Oracle Applications business which is where they want to grow revenue. MySQL products would deliver support stream revenue; very much in keeping with Oracle’s huge maintenance revenue.

Less focus on selling new Oracle DB licenses, and more on selling Oracle DB & MySQL (after acquisition) support would be a big win with Wall Street which looks for steady and continuous revenue. Forget the upfront license cost, and just pay for support & maintenance. Move some development resources to the higher-value offerings. Neutralize a competitor by providing customer choice (with something that a customer wants; not just a crappy offering under the guise of choice). It all sounds interesting. Let’s see how this plays out!

[The image is from flickr user net_efekt – it made me laugh and seemed to be a good way to represent the worry of cannibalization in the face of a serious competitor.]

They say you shouldn’t start with a quote, but this one really got my attention:

“It’s easy to miss when you’re writing about open source; it’s impossible to miss when you’re selling it/making a living from it.”

That’s a comment Matt Asay left on Dana’s blog.  Matt wrote of his belief that anything but open source software is a bad vendor move.  Dana pointed out that while enterprise open source usage is growing, open source is having more difficulty in the consumer market.

Matt then said:

“It just takes an itch (“I really need an app to rip movies to my hard drive – what is available? Oh, and I’d like it to be free.”) and then Google helps you scratch it (Handbrake, in this case).”

What is telling is the fact that he didn’t mention “and the software should be open source” as a criteria. I believe that for the typical tech-savvy consumer, free matters more than open source.  But, for a typical non-tech-savvy user, cost is just one part of the decision criteria.

From a non-tech-savvy consumer, when it comes to replacing consumer software XYZ that I’ve been using with consumer software ABC, I’d suggest that Skills, Cost and Requirements are amongst the most important factors.

Skills:
Remember, most consumers aren’t like the folks that talk about software development methodologies, or why the open source business model is good/bad/etc.  They’re like my parents, friends, cousins.  They know how to use certain software packages.  They’ve spent time and energy getting proficient with the software they have today. You want them to use something different, even a little different, then there better be huge advantages on the other 2 criteria.  And often, there aren’t such benefits.

Cost:
Most consumers get software pre-loaded on their computer, through work (legally) or  from “a friend who forgot to take the install disk home so I figured I’d better make sure it works before I throw the CD out”.  Usually, the cost of consumer software you have installed is too low to justify the time in learning to use a cheaper alternative product (i.e. Even though OpenOffice isn’t wholly different than MS Office for the tasks an average consumer needs, consumers aren’t leaving MS Office behind in the millions).

Requirements:
Since the average consumer doesn’t use more than 25% of the features (i.e. 80/20 rule) within a consumer package they’re using today, it’s unlikely that their requirements aren’t going to be met with their current software.  In some cases, your current software may prevent you from doing something you want (i.e. rip a backup of your DVDs or use multiple iPods with the same iTunes library).  In these situations, you’ll balance the cost and skills required to use an alternative product.  In most situations, consumers just grin and bear it, maybe because they don’t know about alternatives.  Mostly because the alternative is viewed as a hurdle vs. what they’re using today.

I’d say that the above is true for “an average consumer”, so the dynamic will evolve as a larger portion of consumers become more technically inclined.

PS: Yes, these 3 criteria also play a prominent role in enterprise software purchases – that’s for another day. Gotta run.

Matt points to an interesting article about using an open business model.

Not sure if the author, Henry Chesbrough mentioned that IBM made significantly more than $100m/yr in revenue as a result of its Linux investments, whether through increased hardware or services sales. And, we continued to drive revenue to AIX. This last point isn’t often covered, but the AIX business didn’t die.

Very few customers take a one-size-fits-all approach to their IT needs. So, yes, you may need AIX or Solaris or a System z for some of your applications. But you’ll also need some RHEL, SLES or Windows for other parts of your infrastructure.

Customers want choice. So when a new option in a given software category becomes available that saves money, time, is easier to use, etc., customers will pay attention. If IBM had tried to ignore Linux, customers would have satisfied their curiosity (initially) and desire for Linux with another vendor. At the same time, these customers wanted to know how Linux fits into their current infrastructure (i.e. technology integration & skills reuse). Having an answer which included AIX and other parts of IBM’s offerings helped. Far from being a hindrance (i.e. related products that needed to be protected at all costs), these related products gave IBM the ability to speak to customer needs for the given project and other projects with different needs.

The same thing is happening in the application server space. When JBoss started popping up on customer’s radars, the traditional app server vendors didn’t pay attention (maybe to the degree they should have – depending on who you ask). But, customers satisfied their needs none the less and JBoss downloads and revenue grew.

Lucky for IBM, JBoss started out by targeting customers from other application server vendors. That’s when we made the move to purchase Gluecode Software Co. (a key member of the Geronimo community) and throw our support behind the Apache Geronimo open source application server. We delivered a paid support offering for Geronimo. We also came out with WAS Community Edition (WAS CE), a free product built on Geronimo that developers, customers, and partners could use without support or with paid support.

At the end of the day, customers want choice. And while the WebSphere Application Server (WAS) portfolio is broad, it didn’t give customers a free, light-weight and open source offering, some of the things that were attracting attention to JBoss. We filled that portfolio gap and our revenue continues to surpass market rates. Ensuring a strong tie between these offerings and the rest of the WebSphere portfolio has been a tremendous selling point because customers have different needs for different projects and want to take advantage of the skills they have.

Do we see JBoss in more deals? Yep. Do we lose some? Sure, that’s the software business for you. Do we win a lot more than we would have if we didn’t have the Geronimo Support or WAS CE? Absolutely.

Do you have a point that summarizes this long post? Yeah, thanks for asking: Don’t view open source competition as something to ignore. Get into the ‘game’, give customers the choice they seek and explore how your higher-value offerings (the ones you think you need to protect) can be an asset to your business.

Should we have made the move to support Geronimo earlier? Yeah. But our WAS revenue was growing so fast and our sales teams weren’t running into open source competition, so maybe we became a little complacent. It happens. I have one possible explanation for why, but that’s for another post. BTW, please read my disclaimer here.

[The pic is from Flickr user jawcey]

Alex Fletcher posted about Eclipse needing to establish a better/standardized web delivery strategy for the vast number of Eclipse plugins and Eclipse technology.

His post made me think about the Geronimo Plugin Model. It does a lot of what Alex is looking for from Eclipse, except it’s for Geronimo ;-)

The Geronimo Plugin Model makes it really simple to get plugins (i.e. extensions, new features, samples, things that work with Geronimo, etc.). These plugins are easily installed, pulling down required dependencies and all without having to restart the server (in most cases – See here). You can also copy the plugins from your development server over to your production server(s) or any other server(s). Use the Geronimo console to get plugins, or download the plugin initially through Geronimoplugins.com and then use the console to install the plugin. There are a lot more Geronimo plugins than I’d last seen about 6 months ago. Keep ’em coming!

[The pic is from Flickr user dAVIDb1]

A NetworkWorld article quotes Google’s GM of Enterprise Business as saying:

“insane complexity of technology is leading companies to spend 75% to 80% of IT budgets simply maintaining the systems they have already.”

The 75%-80% figure is a little higher than the 60%-70% figure I’d seen in customer research we did a few years back. But the issue I have with the quote is the suggestion that spending on systems you have already is a waste of money or time.

Very few companies have the luxury of implementing greenfield applications. Most of the time, your new app has to integrate with a large number of your old apps. And that may require some tweaks to your old apps. Or maybe your company changed or added a new business process, so you’ll need to make some modifications to your existing apps. That’s not waste, that’s a normal business expense. The alternative would be to throw out the existing app that needs to be modified and start again; to me, that’s waste.

If you tell me that SOA or loosely coupled web services are the answer. I’ll agree, to a a certain degree. But now, instead of modifying existing app “XYZ”, you’re going to modify existing component/service “YZA”.

On the topic of innovation, here’s a good article from Business Review Online about customers using Open Source as a means to drive innovation. Interesting that OpenLogic is seeing customers that either want to save money or open up technical innovation. I’m surprised that customers don’t want to do both.

We found that customers that adopted Apache Geronimo (support from IBM) or WAS Community Edition (WAS CE) were seeking to save money and build a platform that allowed their developers to write and deploy applications faster and with more flexibility. Often, they were using Apache Geronimo or WAS CE for a specific project that needed to get rolled out ASAP. But, these customers cared about how “this stuff will work with the stuff I already have”. They wanted to know what options they had if the app transformed from “a quick and dirty request to something that users relied on, would be less productive without and wanted more out of”. Cost savings, a platform for innovation and future flexibility and choice were all considerations.

Most IT folks know that applications seldom fade away quickly, they just get integrated and maintained with all the other “legacy stuff”.

The pic is from A.M. Kuchling over at Flickr

By now, you’ve probably heard about or read Mark Shuttleworth’s view on keeping free software free. Matt Asay has a take on Mark’sFree Hugs post here.

I don’t think that Mark’s basic point is “because RHEL is a closed binary, it’s proprietary” as Matt suggests. I read Mark’s point to be: “Free Software should be freely available”. So, that means, the RHEL binaries and updates should be freely available from Red Hat and freely distributable (you can already get the RHEL source freely from Red Hat).

Mark is not suggesting that a thoroughly tested, widely certified and secure RHEL product should not be available. (He actually says these are requirements). He’s suggesting that such a rock-solid product (binaries) should be available for free and customers who want to pay for support around it, should do so. Those who want that same rock-solid platform (binaries) without support should be able to get it for free.

So, to Matt’s groceries/entree scenario. Mark suggests that the groceries are already free (i.e. kernel.org, Fedora, etc). He’d like the entree (i.e. RHEL) to be free for pickup if you’re going to eat it at home. But if you want to eat at the restaurant, hear the nice music, ask the chef some questions or impress your date, then you’re going to have to pay for that service/support. So the entree is no different whether you decide to eat it at home (i.e. RHEL for free without support) or in the restaurant (i.e. RHEL with paid support).

NOTE: This is my take on Mark’s post, and the pragmatic “me” doesn’t totally buy into it. I don’t think that Red Hat, or other vendor, would be able to fund the same level of product development if some (significant) portion of today’s paying customers were to stop paying. There would be a direct link from:

<grammar_OFF>

reduced revenue
to reduced development funds
to reduced functionality
to reduced customer satisfaction
to reduced users
to further reduced revenue (repeat cycle)

</ grammar_OFF>

Unless you just have a chunk of cash you can throw at the effort without worrying about meeting investor expectations. But since we all have bills and beer to pay for, things like revenue and profit require some consideration.

PS: The pic for freehugscampaign.org made me laugh, so I wanted to use it.

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