|
....What is Open Source software?
.... it's really a conglomeration of a number of things and these are kinds of things that I've drawn out.
One is it's a
collaborative development, I
think. It's a way for people
to work together to develop
products and those can be
individuals or they can also be
companies
collaborating. We'll be
talking about both of our case
studies and frequently XenSource,
we'll be talking about how that's
interesting, how competitors can
work together to create a product
that they both take advantage of
for their own competitive
pursuits – the benefits of
that and also, the
challenges. But, it is a way
for people to work together in
contrast to the old way that
things were done which is
basically, you hired a lot of
smart people, you put them in an
office at Palo Alto and they
build something on their
own. This is much more of a
worldwide phenomena than anybody
can attribute to.
From a
perspective of a lot of software
companies, it's an inexpensive
way to achieve
distribution. You put it out
there and anybody can download
it. We can use it
again. You don't have to go
tell them about it. You
don't have to convince them of
it. They find their way to
it. They pull it
down. They start using
it. So, instead of having to
go out one-by-one and finding
people to use your product, you
can really let the Internet
distribute the product for
you. You can let people
start talking about it, so it's a
great way to achieve distribution
at a lower price.
It is of
course, a threat to proprietary
software companies although many
of them still will say, "Oh no,
we don't really see software and
outsource to our competitor,"
or "It's used by small
companies,"
blah-blah-blah. It's a
competitive threat and I think
that that's becoming more and
more clear as time goes on.
It is, of course, a large investment.. Open Source is driven by the licenses that carry it and we obviously talk about that in a couple of slides, but essentially, what makes Open Source Open Source is the license that the software carries.
In contrast to
crucial proprietary licenses that
are typically custom-done most
for every deal where it's kind
of, we're going to give you this
much usage, this
many machines, this many
users. Open Source licenses
are more or less potential
software and say, it's a standard
license – these are the
conditions you can use it
under. The licenses really
discipline the way the software
can be used.
In particular,
Open Source licenses give you a
lot more freedom because it's
irrespective of the user, you can
use it pretty much any way you
want to use it. You can go
ahead and add as many machines as
you want. You can even
modify the product because the
source code is included and
that's a factor of all these Open
Source licenses. I'll talk
about this a little bit more in
terms of the business
implications for a
vendor. ....
.... a large analyst firm described Open Source as being the biggest change to the software industry in 25 years, so it's a huge, huge sea change.
....So, why are
companies turning to Open
Source? Well, from the
vendor perspective, there's the
exhaustion of the enterprise
business model. It used to
be you put those smart people in
Palo Alto, they build a product,
you get it to 1.0, you need to
hire a big, expensive
direct-sales force to go bang
down doors to get you
customers. What's really
happened over the last eight to
ten years is that model's become
exhausted. The buyers
stopped buying that way ....
For existing
companies on that model like your
Oracle or whatever, it's still a
pretty good deal, but in terms of
a start-up, it's very difficult
to try and afford that. So,
we need to find something
different as a vendor –
Open Source.
A lot of
reasons that companies look to it
is tied to market- and
competitive advantages. If
you don't have to build
something, write it yourself and
pay the expense of getting it
developed, but you can leverage
Open Source that's already out
there, you can bring your own
product to market a lot more
quickly and also you can keep
more margin than you would have
had in the past. So in the
past, if you had to license a
component…
I'll just use
one of these as an
example. If you needed an
application server and you bought
BEA, you'd be giving up some of
your margin to BEA. Given
that the market's got tougher,
people started saying, "I don't
want to give up that much
margin," and so they turned to
Open Source components as a way
of saying, "I can use software,
but not have to give up margin
– that makes it better for
me."
Really, to
reiterate the point that I was
talking about in the last slide
– the ability to achieve
distribution and adoption with
different time-cost
constraints. I mean, you can
reach people with your product
that you never would have been
able to reach before. You
can get to them much earlier than
you would have been able to
before. You can get
different geographies that maybe
you wouldn't have gotten to for
three or five years....
For the
perspective of users which is the
flipside, why are they interested
in Open Source? Why are they
willing to use Open
Source? Why are they
interested in Open Source
companies? First and
foremost, probably
cost. Essentially, it costs
a lot less to be going with Open
Source. There isn't a big
license fee upfront and that's
very, very attractive.
It's also
because of the lack of lock-in
and there's not a of bit coercion
– in other words, you've
got to give me a lot of money to
get access to the bits and the
products. Once you've done
that, you're locked to me because
I'm the company you can get that
product, updates and support
from. Open Source was not
ready for model. The
products that are out there
– you don't have to pay for
that. You can either come to
the company for support or not,
if you don't want to and if the
company doesn't do a good job,
you're not locked-in...
Opportunity for
customization – I was
talking to a pharmaceutical
company. This was just a
little bird, a bioinformatics
company and any real challenge in
that, they're big companies, but
bioinformatics isn't that large a
market and so, the vendors who
sell software into that market
typically don't have great
products because they don't make
enough to really invest enough to
keep it up to date – put in
new functionality. So,
they're very frustrated as users.
So, they came
to me and said, "What we'd like
to do here is put together a
consortium of
bioinformatics-using companies to
build our own products because we
feel that we can take Open Source
components, customize them and
get a better solution for
us." So, the opportunity to
take that source code and do
something with it – very
attractive.
Then, the
collaboration of the community
– Open Source is sort of,
inherently associated with the
community. The other people
are using it and many people were
developing it. It's a
fountain of wisdom. It's a
great way to get
information. It's a great
way to co-develop and as an
end-user, the ability to turn to
other people and say, "Gosh, I'm
running into this problem with
this product," and have them say,
"Oh, I had that problem, too
– here's how you can solve
it," is just a great resource.....
So, this is what's driving people to begin looking to Open Source.
.... Well,
one of the things you have to do
is ensure that Open Source you
use is managed properly and this
is true whether you're creating
an Open Source product from
scratch that you're delivering
like a XenSource or an Adaptive
Planning, or if you're
incorporating Open Source
components within your own
product. You have to be very
certain about the licensing
you're using....
It's also
important because there's a
movement around Open Source and
you want to rely on the goodwill
of that movement. If you're
seen as not complying with the
licenses, you're going to have
problems with your business
strategy trying to appeal to
those folks....
You can use
Open Source to get great
distribution, to piggyback on it,
but if you're not aligned with
the license, you're always going
to be at cross-purposes and have
a really difficult time with your
business strategy....
You have to
make sure that your business
model aligns with Open Source
realities, but first and
foremost, can you build a
community? That is
absolutely fundamentally crucial
to Open Source products being
successful. Can you build a
pool of people who are using it,
involved with it, willing to
interact with you, willing to
contribute to it and willing to
work with other members of the
community?
Are you really
being transparent? This is a
real challenge for many, many
companies, particularly companies
that say, "I'm now proprietary
– I want to go Open Source."
First and foremost, your code's transparent ....
But, beyond just the code itself which is clear from the license, there's an expectation that you're going to be more open about things like your product plans. You're going to need more room to engage with people about product plans....
Then finally,
your product has to make sense as
Open Source. In other words,
it has to be something that
people want to adopt, download,
use, experiment with and
contribute, and there are certain
products that we can thumb-sense
that way and certain ones that
don't.
An area that Open Source hasn't done a lot in yet is vertical applications. Those don't seem to have really caught fire....
|
