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So, how many
people here work at companies
that Open Source is a
significant part of their
strategy and how many people
are at companies that are
starting to think about using
Open Source as a part of
their strategy? How many
people came just because they
were serving pizza?
Alright, we're
going to talk tonight about
Open Source software –
the new software paradigm and
what is interesting about
Open Source, what's driving
it, what the interesting
challenge points are for it
and so forth.
Now of course, the first thing I start with is the fountain of all knowledge technical – Dilbert.
Can anybody in the back read this? Okay, nice. This is great eye chart stuff.
So,
essentially, the pinheaded
boss has found out about Open
Source and says, "I want to
use Open Source for
everything because it's
free." Then, we
essentially have to reel him
in, of course, as they do
with everything.
Really, beyond
that fact that Dilbert's a
fun cartoon and so forth,
what this really strikes me
is Open Source is hitting the
mainstream. Dilbert's
making fun of it to an
audience that's pretty
mainstream. Open Source
is getting there.
So with that, let's start off and talk about Open Source.
What is Open Source software?
The reason the
elephant's up there is I hark
it back to this fable I guess
it is, for six blind Indian
men who were brought to an
elephant and asked, "Please
describe it." One
grabbed the tail and said,
"Oh, it's thick and
long. An elephant is
like a rope." Another
one felt its legs and said,
"Oh, they're huge and
strong. This must be
like a big
tree." Another one felt
the ears and said, "Oh, this
is wavy and flappy. It
must be some kind of, like a
bat." Then, one felt the
tusk and said, "Oh, it's
sharp, long and
pointed. It must be like
a spear." The point of
that is that Open Source has
a lot of different opinions
about what it's about, and
many people look at things
and say, "This is what it
is." But, 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.
Then,
according to some people, it
is the only software solution
on the planet. There are
ideologues associated with
Open Source for free software
because this is the only way
that software should
be. I mean, there are
people in the room who sort
of say, "Intellectual
property is theft." So,
you will run into that, as
well.
That's an
interesting perspective, but
it's all of those things and
really, as you conglomerate
all those, what it is, it's a
huge change to the software
industry as we know it
– a huge change to the
IT industry as we know it.
IEC which is 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.
Alright, let's put in the next slide.
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. They got tired of
the pace. They got tired
of having sales people come
and maybe, characterize their
products to be more capable
than it was. What
happened was, from the
perspective of the vendors
and also from the funders, it
just got too expensive to
build those kind of
companies. You had to
pour too much money into that
for what you get. So,
that model has really gotten
very troubling and very
exhaustive.
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. Those people can
find your product, begin
using it, like it a lot, call
you up and say, "I want to
enter into a business
relationship," whereas if
you've started with the old
model, you never would have
gotten your products in and
you wouldn't have been able
to in-turn your financial
transactions. So, it's
very attractive from that
perspective.
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. You can
walk away. You can find
someone else to support you,
so lack of lock-in is a big
reason.
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.
Oh I
forget. The first time I
built an Open Source space
system, our group was working
on one piece and another
group was working with a
proprietary product. We
ran into problems and we'd
post something to a mailing
list. Twenty minutes
later, we had answers from
all over the
world. "Here's how you
do it, I did
it," "Here's some code I
did," and so forth. The
people using the proprietary
product for their part of
their project called up the
support group and basically
had somebody who knew less
about the product than they
did.
It's a huge difference - the opportunity to collaborate with the community is a great thing.
So, this is what's driving people to begin looking to Open Source.
In terms of
building a business strategy
around it, what do you have
to do? Let's go on to
the next slide. 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. Remember those
licenses I talked about come
with certain kinds of
conditions and you have to
abide by them all. If
you don't, typically you're
not going to get sued, but
somebody is going to come to
you and say, "You really need
to comply with these license
requirements – you
either need to change your
product to come into
compliance with this or you
need to remove it," so this
is a really big
deal. So, meeting
compliance with the license
is really important.
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 have to
make sure that your business
model aligns with the
licenses. If the license
calls for the product to be
available in a certain way or
that something can begin with
the product and your business
model doesn't align with
that, you're going to be in
real conflict.
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, not
to mention difficulty with
your community that's built
up around it.
I should say
that being Open Source is not
enough to guarantee
success. I've seen a lot
of companies that source and
said, "Oh, our product's not
doing so well – we'll
make it Open Source and
that'll solve
everything." I kind of
call that the Tom Sawyer
strategy. It's kind of
like, would all of you out
there mind coming over and
mind painting my fence
– would you mind taking
care of my product that I
don't want to deal with?
Open Source is
not enough to make the
product successful. You
have to do all the things
surrounding Open Source to
make it successful. I'm
talking about that in just a
minute here.
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. There's
nowhere to hide. You
can't put out kind of, junky
products and hope that nobody
will really know because
everybody can read the code,
so your engineering group has
to become less egotistical or
maybe, less defensive about
their code because people
will look at it and comment
on it.
I was working
with one company that created
an Open Source product for
their own hardware product,
right? So, they had
their own hardware
product. They wrote a
code to go with it. They
turned the code to the main
Open Source projects and the
person there started to
comment back to them and
said, "Oh, I've rewritten
your code, so it's better,"
so you see what kind of
transparency you want.
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. The old
model of, here, we're showing
up. Here's my slide
deck. We're going to
tell you what the world's
going to look like. This
shows the dog food you need
to be ready to eat. That
doesn't work in this kind of
a world, so you've got to be
a lot more transparent, a lot
more willing to engage.
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.
We've seen
applications go Open Source
like CRM and stuff like
that. That seems like it
is maybe getting some
traction. Of course,
infrastructure makes a ton of
sense as Open Source.
So, you've got
to have the right business to
wraparound Open
Source. Otherwise, it's
not going to generate the
kind of energy, distribution
and so forth that you need.
With that, I think that's it.
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