Over the last decade Open Source technologies have made major strides in maturity and presented a credible alternative to the proprietary software vendors. Just as they make inroads into various aspects of enterprise IT landscape, we have started seeing a spate of acquisitions of those open source companies by those very “nasty” commercial software vendors.
In all these acquisitions, all the focus and noise by press, bloggers have been on the wretched intent of proprietary vendors in acquiring open source projects. “Oracle is acquiring Sun to kill MySQL” – being the classic. As much as I am not a proprietary software person and a self-professed open source evangelist, makes me wonder about those open source companies and their intent.
Open Source represented this sense of anti-establishment, which made people sacrifice their personal time and energy to join the community and contribute to something larger than anything they could have done by themselves. But with increasing number of open source project owners seeking to cash out by selling the project to a commercial vendor I can see things getting a little crazy as we go forward.
- People who spend a lot of time on open source projects to contribute only to see the project owner cashing out might have second thoughts spending more time.
- With each of these acquisitions, invariably, we see multiple forks of the open source projects getting spawned. This will just prove to be a distraction to progress of the software. Not to mention the headaches the consumer of that software now has to deal with.
If you look at the open source landscape, there are two key equally opposite trends at play here.
Commercial vendors going Open Source
On the one hand we see increasing number of commercial projects going open source. Let us check some vendors have open sourced their products
- Open Solaris by Sun
- Java from Sun
- Ingres from CA
- OpenFlex from Adobe
- Foxpro from Microsoft (you may question if this noteworthy?)
Open Source vendors getting acquired by Proprietary vendors
Let us look at some of the open source project acquired by proprietary vendors
- Gluecode by IBM
- XenSource by Citrix
- JBoss by Red Hat
- Berkeley DB by Oracle
- MySQL by Sun and now by Oracle
- SuSe linux IP by Microsoft
Look below the hood and you will see two key drivers here
- All the commercial companies that are open sourcing their products are mostly products that have reached a stage where they are not the dominant force and their existence is in question. Yes, this includes Java. Much as I like Java it has not helped its own cause with the complexity. The balancing of the interests of Sun and other constituents of JCP has not helped either. PHP, Python, Ruby on Rails, CakePHP, Force.com, Google AppEngine and .NET all gaining traction at the expense of java. If you look at the large software vendors – only IBM and Oracle are behind java and IBM is making up its mind to be a full-fledged software company.
- Companies that have failed in the market not able to support their product with resource and financial commitment, decide to open source it. Ingres is a classic example. It seems nothing but a last ditch attempt to hold onto a product nobody wants and get some marketing mileage.
Now if you look at the open source projects being acquired by commercial vendors they are done by large vendors who are trying to either
- stop the advances of a vibrant open source project encroaching their customer base.
- trying to replace their own lousy product with a better open source project.
For example: Oracle after long trying to create its own version of mobile/light weight database without success acquired Berkeley DB. In the process it got a much better product and eliminated the distraction to the team creating the “Dreamliner” Oracle 10g or 11g.
Going back to my question of what is the real (hidden) business model behind these Open Source companies.
At the outset I am not a big fan of the Open Source business model (while I continue to love those products). Majority of the open source companies usually play a bait-and-switch game. They put out a free community edition and then once they hook the customer, charge for the real product – the “enterprise version”. The balance between the two flavors is always in question.
As a company spending the R&D dollars to build a product, there is no way you can support your business by giving away the source code – especially in these times of commodity support (Think Rimini Street supporting SAP). And consider VCs putting money behind a open source company where the only source of revenue is service and the code is open. Does it really work? If you look at the companies that have chosen this route, very few would be counted amongst the companies doing very well, right about now.
Alternatively, if you are going Open Source from the get go, all you are telling me is that you are not willing to put money where your mouth is. You are banking on community as a substitute for a paid R&D organization. Or resorting to cheap gimmick of making a “Going Open Source” announcement.
So given the trend of community owners milking the goodwill of people and eventually cashing out continues, there will be serious questions asked of the open source projects. If you go by Dana Blankenhorn’s explanation of how to acquire Open Source, we might see expansion of GPL or the other flavors of Open Source license to include the ownership of copyright to the community and not to the individual who might have just started it.
A final thought: I am sure, as you go through the post, I might sound a tad bit against open source movement. I want to clarify, I am not against the open source movement itself. It has great virtues like reducing overall cost of ownership, better interoperability and better quality of code thanks to the community governing itself. I personally use a lot of open source software – Ubuntu, MySQL, WordPress, Drupal. I love all of them. They are better than anything else their proprietary counterparts have to offer. But the general open source business model itself seems to be flawed.
About Subraya Mallya
Subraya Mallya is a technology executive, entrepreneur involved in conceiving, building software businesses. In this blog, he focusses on business and technology strategies around Business Model, Product Development and Marketing. Connect with me on Twitter - @subrayamallya
May 22nd, 2009 at 1:28 AM
“Open Source represented this sense of anti-establishment which made people sacrifice their personal time and energy to contribute to something larger than anything they could do otherwise.”
This is simply not true. First of all open source was never anti-
establishment. It was a competing model, where the contributions and
contributors *collaborated* in public – the process and the result
had a democratic, public and transparant “purification” ( aka
quality check ) which benefited (again) the public.
On the tone of the word “sacrifice” – yes there is time invested, but
it was mutually beneficial – the cotributor ( who spends time ) sees
open source to be a “creative outlet”. I don’t think they see as big
or small – I’d rather go with the small but again small droplets
form an ocean.
“Now with more and more open source project owners seeking to cash in their paychecks by selling the project to a commercial vendor it begs the question, is Open Source software model an easy way to use people with false pretense only to further your own interests”
On “cash in” – well. Open source is about “open” processes. Now
company A could see their business objectives taken care, while
working “with” the open source community and processes. Note that I
keep repeating the word “process” (GPL)as there is a process which
has good divisions and directions towards “personal” and “commercial”
use.
On your question and the implicit FUD that it raises about “false
pretence” – that’s fundementally not true. Open source is not about
helping one to con other. Infact its the opposite. The processes as
the contributions are as open as it could ever be. You take your cup
of cake – you could market it as Louis XIV’s snack or work toward
enhancing the taste in a collaborated manner.
“Much as I like Java it has not helped its own cause with the complexity that is built into the JCP process and the technology itself. It is at crossroads with PHP, Python, Ruby on Rails, CakePHP, Force.com, Google AppEngine and the good old re-invigorated .NET all gaining traction at the expense of java.”
On the 1st part about Java and JCP – I’m not if you’re talking about
problems with Java or JCP. But on the 2nd part – I doubt .NET to be
a compelling force – atleast the searches and job doesn’t reflect
that…
http://www.google.com/trends?q=.net%2C+java%2C+php%2C+ruby&ctab=0&geo=all&date=all&sort=0
http://www.odinjobs.com/Odin/marketstatcompare?id=134&q=java+vs+.net
“If you look at the open source projects being acquired by commercial vendors they are done by large vendors who are trying to either stop the advances of a vibrant open source project or trying to replace their own competitive product which is languishing with a better open source project.”
On the 1st part, what’s wrong in that. After all its “business”.
Their objective is to take competition out of the way or compete
to win. Now that’s principle. Open source has absolutely no baring
on a company which is doing “give and take” and find itself that
it has a compeling product and gets bought or bought to be
destroyed. That is “that particular companies” decision or destiny,
not open source process’.
On the 2nd point of company finding their product to be inferior
than that’s out there – that’s the inevitable power of and the
beauty of an openly, collaborated “open source process”.
“To me the whole strategy about going Open Source in questionable. If you look at the companies that throw their code open there are just doing lip service. They put out a free community edition and then there is the real product – being the enterprise version. The balance between the two is always in question.”
On the 1st point – couldn’t agree more, but to be clear, its about
the companies decision, not really a problem with the process. Not
only companies do a lip-service, but its a buzz word as well.
On the 2nd point – The balance is upto the eye of the beholder.
Redhat with RHEL and Fedora is in fact a success story for this.
“If you really spend the R&D dollars to build a product, there is no way you can support your business by giving away the source code – especially in these times of commodity support (Think Rimini Street supporting SAP). If you take it a little further, think of VCs putting money behind a open source company where the only source of revenue is service and the code is open. Does it really work?”
Yes it does and ( as always ) there is more to explore. Ubuntu is
a good example of how companies adopt for their dev platform and
having to pay Ubuntu for services. It is real and it is happening.
“Alternatively, if you are going Open Source from the get go you are telling me that you are not willing to put money where your mouth is. You are banking on community as a substitute for a paid R&D organization.”
On substitution, that’s fundementally wrong. The keyword is
collaboration and the point being that you have this brain power
in abundance instead of having to look at it as a mutually exclusive
process. Examples are IBM’s researchers on Linux, Yahoo’s
contributions towards Hadoop among others.
May 22nd, 2009 at 5:15 AM
Shankar
Thanks for the detailed comment presenting an alternate view point. I can see the passion that it generates in people who despise the proprietary gated-walls software approach. My only concern is about all the goodwill people have and the investment they make in terms of time & resources only to see the selfish motive of the founder who cashes in and the actual contributors left to feel like suckers.