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Content Tagged with SourceLabs + open
Customers Buy Solutions, Not Concepts
SourceLabs is often lumped into a category that the media refers to as Open Source stack providers, a designation we find curious as it doesn't represent how customers view the world at all. Customers buy solutions. Examples of solutions include: grid infrastructure to squeeze more capacity out of existing computing investments, CRM software to make sure the ball doesn't get dropped on a customer interaction, or Java Middleware to provide a development and deployment platform for enterprise applications. A collection of Open Source projects (no matter how exhaustive) packaged together is a way to fill up disc space, not a solution.
Providing a solution means committing to understand specific customer environments and requirements in-depth. This kind of focus has lead SourceLabs to create unique services to meet the needs of enterprise customers who depend on Java middleware. Examples include our continuous feeds that track and alert customers to security issues and other software vulnerabilities, our triage process that uncovers and addresses software defects pro-actively, our certification of Open Source software with proprietary enterprise systems like IBM WebSphere and BEA Weblogic, and the stress and configuration testing that we use to shake out and repair software defects during our certification process.
Just as there is not a market for "proprietary software stack providers" there is not a market for "Open Source stack providers." What there are markets for is Open Source solutions. Customers recognize that one size does not fit all, and that software and support for mission critical computing environments is a best of breed proposition.
While software "code" may be increasingly "commodifying", the quality of software support services (as measured by timeliness and accuracy of issue resolution) presents an opportunity to address enterprise customers' long-standing dissatisfaction with software vendors. Why should a Fortune 500 company have to wait six weeks (or even six days!) for their support issues to be resolved? SourceLabs goal is to improve software support with innovative technology, and to provide the most reliable, tested infrastructure software available anywhere.
The Continuous Support Solution is a new way to meet the dependability requirements of mission critical systems, and the best way to evaluate it is to try it out. If you're using Open Source Java middleware, contact us to set up an evaluation, and prepare to have your expectations raised.
SourceLabs Board Member Brad Silverberg de-Myths Open Source's Effect on IP
Ironically, these claims come from some of the most vocal detractors of the movement, as well as some of the leading proponents.
The detractor argument is that open source kills innovation; the proponents say open source is good because it promotes freedom, broader sharing of technology, and greater empowerment of users and customers. But is there really truth in the core premise--that the value and importance of intellectual property is dying as open source takes off?
My perspective is that intellectual property continues to be a critical driver of innovations and software businesses--and that open source is not fundamentally changing that. Yes, open source can mean that customers don't have to pay huge amounts of money for commodity software--that is, software that doesn't have highly differentiated intellectual property (IP). But there has been, and will always be, a huge market for innovations, and with or without open source, that IP will deliver superior value to customers as well as investors.
In fact, open source can lead inventors, engineers, architects and business strategists to focus on areas where software is not a commodity. This often means that open source optimizes the creation of IP to focus on the problems that pain customers the most--for instance, where customers are willing to spend the most money--rather than technology that fits a particular business plan or strategy.
There has been, and will always be, a huge market for innovations, and with or without open source, that IP will deliver superior value to customers as well as investors.
It's as if open source applies evolutionary pressure to business plans, in the Darwinian sense. Because open source eliminates whole categories of obvious commodity software plays, we in the investment community see fewer "better mousetrap" propositions that retool commodity categories and more focused and innovative plans for unserved markets.
Let's take an example from [SourceLabs], an Ignition portfolio company in the business of making software work and fixing it when it breaks. The support and maintenance business in enterprise software is sized at tens of billions of dollars. Customer satisfaction is low, and has been for years. What's more, the lack of innovation in doing better (much less well) in this market is remarkable. In the enterprise software market, support experiences have not changed for years. Really the only "innovation" from the past decade that comes to mind is putting support information and issue trackers online, which has served to reduce vendor costs, not necessarily improve customer experiences.
Surely some great technology--yes, intellectual property, in fact--can help to "break open" this market, and dramatically improve both customer satisfaction, as well as business opportunities for providers of these services.
There is a real opportunity to create IP that brings a host of innovations to bear on solving the problem of keeping systems up and running and bringing them back up from failures as quickly as possible.
The solution is a continuous support system that constantly monitors customers' production systems and automatically matches any failures against a continuously updated database of failure signatures, much in the same way that security vendors guard against virus attacks, but applied to a broader problem space.
Another example of unique IP from an Ignition portfolio company [Centeris] comes from the systems management area. Not all companies are going to jump to open source overnight, and some smart innovations can help them contain administrative and infrastructure costs during the transition. The need is to manage Linux and Windows computing resources as a single contiguous network, leveraging network services across both environments. It's a hard problem to solve, and as far from commodity technology as you can get. But its success tracks with the increased adoption of commodity infrastructure.
Open source is forcing entrepreneurs and investors to think in new ways about a new set of problems. While it has taken away some of the low-hanging fruit, it's my belief that open source will help drive a focus on improved solutions for customers--particularly in underserved markets--and that unique intellectual property will play a critical role in fueling this new engine for innovation.
Don't be a Tweener (or: "Making sense of the open source mash-up")
What gives?
Let me digress for 2 paragraphs. The last 5 years have been really really bad for 95% of all software vendors. Companies like BEA Systems, Siebel, and Borland (just to name three, but pick just about anyone) have struggled mightily. Notice I didn’t even mention Sun. The 5% who’ve done comparatively well? Oracle, IBM, Microsoft, and SAP. It’s been like a nightmarish realization of supply-side economics gone amok – the rich get richer, everyone else struggles. Why? Large companies haven’t been spending much money on software (they’ve been digesting a lot of shelfware they bought in the go-go days) and CIOs have become more and more risk adverse – a lot of money was ill-spent, and the economy as a whole hasn’t been great, so their budgets have been tight and they’ve focused on keeping costs down rather than starting new projects. (This seems to be starting to change a bit, but don’t hold your breath…) In an environment like the one we’ve had over the past few years, customers have run to safe harbors – the large software vendors and “solution providers” (a fancy term for custom software services and bundled offerings – what IBM and HP do essentially.)
This doesn’t mean, of course, that innovation and entrepreneurship have stopped. It’s been alive and well – primarily focused on “new business models,” namely software as a service and open source. Poster children: RedHat and Salesforce.com. From the ashes of any downturn new businesses are born. MySQL and JBoss are two smaller companies on similar tragectories. (There’s certainly been some excellent technical innovation as well – out of pure stubborn resistance to jump on any sort of Web 2.0 bandwagon, I’ll cite XenSource and Azul as examples.)
With this background, back to the subject at hand. If you’re a giant software or services vendor, in today’s market you know that you’re going to get a good chunk of a customer’s business, for the reasons stated above. Your goal becomes figuring out how to “grow the pie”, and how to compete with other large companies. How to go about doing that?
There are four easy rules for a huge software vendor these days:
* Make sure your software works easily with all the other software your customers are using. This increases the number of projects and customers you can work with.
* Co-opt innovation where you find it (by partnering, acquiring, or in the case of standards, simply promoting and adopting)
* Acquire small companies when they’ve established that they have something customers want, but customers clearly would prefer to buy from you. This is a super low-risk strategy that, I would argue, is behind the Oracle/Jboss combo.
* Don’t let smallish companies growing quickly get large enough to have their own momentum – beat them or buy them.
Most of the partnerships and acquisitions we’ve seen can easily be attributed to one or more of these four strategies. Moreover, most of the “low hanging fruit” – the medium sized companies like Peoplesoft, Siebel, Rational, etc. —have been gobbled up. The Larry Ellisons of the world have turned their sights on smaller fry. It’s an interesting environment where the companies that count are the largest and the smallest – and the “tweeners” get left behind.
So if these conditions stay true, what could be on the horizon? Clearly more partnerships between upstarts and large vendors. But what about our poster children? RedHat and Salesforce.com are certainly threats to the large incumbants if they continue their success. The Salesforce.com case is easy – I’d look for companies like SugarCRM to continue to land big-name partnerships until they are successful enough to be bought. RedHat is a more difficult case, but it’s certainly hard to imagine that there are calm waters ahead for the crew from North Carolina.