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The Consequences of Being an Open Source Company
No Matt, my brain definitely wasn't idle.. I've been thinking about these problems for the better part of the last decade. And it seems like I`m not the only one who wants this discussion.
Dries told me that as a follow up to my previous post I should write a post with solutions to the problem. Difficult as I don't have the solutions yet.. If I had them .. well :)
Fact is that different types of opensource products might require different approaches Alfresco to my knowledge has little to no contributing community , Linux distributions tend to have a big one, if not just in the form of the different open source projects they pacakge. The MySQL community is more one of documentation, helping out and bugsquashing. So my ideas aren't valuable for everybody, which is maybe why Matt Asay can't understand me, he might be looking at only one side of the picture.
There are some little things that I can suggest however.
Open Source works because of people contributing to projects, Open Source companies should recognize that and figure out a way to return more business the partners that also contribute to their code , this way they can contribute both on commercial and financial level. If you keep sending business to non contributing partners at the loss of the ones that actually commit code, some people will be unhappy. Those contributing shops might not be bringing the big revenue for the vendors, but they sure are contributing.
The other part is in the support model, Matt somehow thinks I`m in the "everything must be free" camp. Wrong, I`m in the right price for the right product/service camp.
Which means that if I`m escalating a support issue of a customer of mine to a vendor, my time must also be paid for. However that's a difficult sale, my client already paid for his support contract , to the software vendor.
So my suggestion, back when RedHat came to the Bemelux, was to have different types of support contracts, a customer could get a direct contract with a vendor where no integrator could log the calls. Then with another contract type if the a partner actually logs a call for his customer he must get some kind of kickback for that...
One of the advantages there are that more first line calls can be tackled by local partners, partners that might know their customers better.. but they still have a backup if they can't solve the problem. Therefore less investments are to be made in a support organization by the vendor.
And last but not least , don't tell your partners what they can't do. They should be listening to their customers, if their customers choose for the open source version it's the customers choice, and the partner should be able to help his customer, the last thing you need to do is punish them for listening to their customers needs rather than the vendors. This is how the proprietary world works.
Oh and Matt, next time you are in Belgium, let's do another round of Buytaert vs Asay :)
Maybe we come up with some better ideas than the above ones.
MySQL licensing redux
After all the fuss it appears that MySQL will be remaining open source after all. As Kaj Arno and Monty Widenius report, Marten Mickos announced at CommunityOne that the MySQL Server will stay open source, as well as the forthcoming encryption and compression backup features, which MySQL had considered making available only to paying customers.
“The change comes from MySQL now being part of Sun Microsystems. Our initial plans were made for a company considering an IPO, but made less sense in the context of Sun, a large company with a whole family of complementary open source software and hardware products,” writes Kaj.
“My hope is that the experiment when it comes to closed source extensions developed by Sun is now ended. As far as I know, there is no existing plans for any closed source extensions to the MySQL server,” adds Monty.
While that seems pretty clear cut, there is still room for a little confusion. Kaj writes: “To financially support MySQL?s free and open source platform, we have a business model which allows both community and commercial add-ons, and we remain committed to it.”
Monty clarifies: “I interpret this, in the context of Mårten’s and Jonathan’s announcements, that we will continue to support and make available commercial addons to the MySQL server from third party, like the Infobright storage engine. Things that we develop ourselves at Sun, at least on the server, will continue to be open source.”
UPDATE - The phrase “at least on the server” is revealing, however. Matt Asay points out that MySQL will continue to develop commercial add-ons above the server, which is the direction as I understand it, and - as I noted two weeks ago - has been the direction for some time. - UPDATE
While we’re on the subject of MySQL (again) it’s also worth taking a look at the slides (PDF) from Monty Widenius’s “Future Design Hurdles to Tackle in the MySQL Server” presentation at the recent MySQL Conference and Expo.
The slides provide a fascinating insight into the technical challenges Sun and MySQL face in positioning MySQL for wider adoption, as well as evidence of the intention to be more open, both about the nature of the challenges and in accepting more contributions from outside the company.
As slide 18 states, the fact that the MySQL community is not currently contributing to development means that the project is not benefiting from the experience of real-world users and that the user base is growing slowly.
The suggested solution is to open up the development process to give outside developers commit and decision rights and to learn from how PostgreSQL is developed. I previously wrote that “if MySQL does choose to develop closed source extensions to the GPL code it will probably have to find some way of balancing that with providing more value to the community.”
It would appear that the development of close source extensions is no longer an issue, but that providing more value to the user community remains a priority. Sun has gained a lot in acquiring MySQL, but one thing it hasn’t gained is an understanding of building a wider developer community. In fact, MySQL has a lot to learn from Sun in that regard - both its successes and its failures.
Doesn't Matt Asay want Open Source integrators to earn a living ?
Or, why the Inuits won't partner on selling Ice from Alfresco unless they change their strategy.
I usually agree with lot of the things Matt Asay writes but today in Closing an open-source deal trough your systems integrator , he thinks the way to work with partners in an opensource environment is to force them to sell the commercial solutions of your products.
He also thinks you should block them from starting an implementation before the end customer has signed a purchase order.
Whew.. this must be the most stupid idea he had since he started his opensource career. The sad part is that I haven't seen a commercially backer of an opensource project dealing correctly with its contributing partners. He isn't solving the problem , he is creating a bigger one :(
Integrators and consultants are often the bigger contributors to a project because they are integrating new features for their customers, You know, their local , we speak your language , customers. So now Matt wants to force them not to sell services around GPL software anymore but sell the commercial versions ?
As lots of commercial opensource versions do not allow you to make changes to the code if you don't want to loose support your hands are tied again. And yes I have been in this situation before multiple times, a situation where , a commercially backed opensource project, required a couple of small changes to fit with a customer, because of these changes the commercial vendor would drop support , so the customer decided not to buy the license. Should a local integrator capable of helping such customer loose that deal because of a partnership ? Off course not .. It's perfectly understandable that a software vendor can't support every different patch. Shouldn't an integrator have the freedom to assist a customer in making these choices, and give him valuable advise ?
Forcing the integrator to sell the commercial version brings them back to the proprietary software vendor situation , where they couldn't solve issues either.
Mind this is a Category "C" user ,(an organization that has more money than time), which should be an easy win for the commercial opensource vendors.
Then there is the issue of Paying twice where a customer both pays for the time the integrator spends on solving his issue and the support contract. I`m stil looking for a solution for this one.
In the past we invested in different partnerships , some requiring certification, with different Open source vendors before, never got a dime back from these investments.
While our shop was a small but specialist expert knowledge center most deals that those other vendors had in our area went to the incompetent boxmovers that did volume, often totally screwing up the actual implementation. Whether we had contributed to the project, or in the case of Linux distributions were probably equally skilled to support the environment as the vendor itself didn't matter.
We didn't sell enough boxes , so we never got any deals back. Our business is advising people on how to implement open source , implement it for them and support them. We are working with both type A,B and C customers. But the commercial opensource vendors want to force us to go back to the old proprietary boxmoving model, sell licenses, don't sell solutions, Oh and No you can't fix that .. you'll have to wait for the next commercial release or lose support.
So how many of the opensource benefits should the customer give up ?
No Matt, this time your idea stinks,
This way skilled consultants that care about open source and contribute to the community are being punished for doing so, whereas they should actually be getting business back from the vendors, so they can earn money and contribute more on your product you force them to waste more time on the sales side. While the people that just move boxes, don't care if its an open source application or a proprietary package gain more. For them its just business as usual .. selling boxen.
It just doesn't make sense
This concept is just bad for opensource in general, motivated people will stop contributing to products they implement, as they see that their efforts aren't appreciated by the vendors.
Jonathan Schwartz has the last word on MySQL
It is perhaps fitting that the last word on the recent MySQL licensing row should belong to Sun’s CEO, Jonathan Schwartz. In a twitter Q&A with Web 2.0 Expo attendees, courtesy of Tim O’Reilly, he states that:
“we have no plans whatever of ‘hiding the ball,’ of keeping any technology from the community. Everything Sun delivers will be freely available, via a free and open license (either GPL, LGPL or Mozilla/CDDL), to the community.
Everything.
No exception.”
Which would appear to be pretty conclusive, despite his additional claim that “leaders at Sun have the autonomy to do what they think is right to maximize their business value - so long as they remember their responsibility to the corporation and all of its communities (from shareholders to developers). Not just their silo.”
Jonathan also revealed that “the MySQL team just closed the single largest deal in the history of MySQL, a $10m deal to a global technology company”. So expect some positive spin on the deal from Sun’s earning announcement later this week.
Trying to keep the customer satisfied
I was just reading Fabrizio Capobanco’s take on the MySQL excitement (”this move is clearly into the right direction”) when it occurred to me that the situation is related to the comments recently made by the former CTO of Kaplan Test, Jon Williams, at the recent OSBC conference.
As I wrote at the time: “Another point Jon made was that the subscription model helps keep open source vendors on their toes as every year he gets to decide whether they will received another payment.”
In other words, as Matt Asay put it: “the more happy he is with his commercial open-source software, the less likely he will be to pay for it. Why? Because his developers will acquire the expertise over time to support themselves and because the product will mature to the point that support will be less necessary.?
Is this the challenge that MySQL faces? A lot of attention is placed on its circa 1:1,000 conversion rate from Community users to Enterprise subscribers, but I wouldn’t mind betting MySQL and Sun are more concerned about retaining that one existing paying customer than they are chasing the 999 who will most likely never pay.
That does not mean the company should - or can afford to - turn its back on its Community users, of course, but it does make it hard to balance the two communities. Ultimately I believe that a lot of the really negative reaction has been based on a misunderstanding that the company was going to remove features from the open source version, which is clearly not the case.
The company needs to move quickly to decide and explain how exactly it is going to license the new functionality. Once it has everyone can make up their own minds and get on with (or without) it. Until then, the confusion is likely to grow.
MySQL?s storage engine program picks up steam
The solidDB for MySQL database engine for MySQL may have lost its sponsor following IBM’s acquisition of Solid Info Tech but events at this week’s MySQL Conference and Expo prove the certified engines program is alive and well.
Not only has Oracle announced that its Innobase subsidiary has updated InnoDB transactional storage engine, but there is also a new member of the certified enginesprogram.
Kickfire has recently emerged from stealth mode with its data warehousing appliance based on MySQL, column-store software, data compression, and a proprietary SQL processor.
Additionally, another potential new storage engine partner emerged in the form of ScaleDB, which is promising to deliver its new scalable storage engine for MySQL in the fourth quarter of this year.
Then of course there will be MySQL’s own Falcon engine, which entered beta testing in March and will be available with MySQL 6.0.
Broken Promises Behind BT CEO Exit
In 2006 I had traveled to London to meet British Telecom (BT) CEO Ben Verwaayen and his team, hoping to get a first hand look at how Verwaayen and his team were trying to overhaul the company well known for its iconic phone booths.
They had put in place a strategy to diversify into IP services, build a brand-new 21st CN (UK broadband network) and, to cap it all, plans to become the carrier of choice for large multinationals. It ended up as a long feature in the August 2006 issue of Business 2.0.
The 56-year-old former Lucent executive Verwaayen resigned earlier this week after six years at the head of BT. He is being replaced by 43-year-old Ian Livingston, who until recently ran BT Retail and was seen as the maverick to make BT Retail a force to reckon with.
Livingston, before joining BT, was group finance director at electrical retailer Dixons and had helped set up Internet service provider Freeserve, now part of Orange. Livingston was part of Verwaayen’s attempt to hire folks from outside of telecom industry and bring some consumer-savvyness to a stodgy company struggling to stay competitive with pesky upstarts. He will have his work cut out for him — the company is still too big, too lumbering and too bureaucratic. The 21CN is still nowhere close to delivering its promise. At the same time, BT is facing increased competition from upstart broadband providers like Carphone Warehouse and Virgin. The company has no consumer mobile service, and it continues to lose consumer lines.
Those were the very same issues that put Verwaayen on the hot seat. On his watch, BT had a mixed record. A lot of promises were made, but never fully realized. The only stand out was the Global IT services business. It now accounts for about 40 percent of BT’s total revenue. But that’s about the end of it.
Fierce Telecom points out that “Verwaayen’s decision to leave comes not long after BT reported poor financial results for the fourth quarter and full year of 2007.” In recent months, several executives have left and there are questions about “execution and expense of its 21st Century Network project,” FT goes on to say.
So what’s next? Job cuts, according to some analysts who point to Livingston’s track record. I wonder if one of those will be company CTO Matt Bross, who came to BT at the urging of Verwaayen.
What are your thoughts on BT and its future?
Additional reporting by Irina Haltsonen, who is spending the summer with the GigaOM team.
Code modification: the open source database straw man
It is interesting to read RedmondDeveloper News’s take on Oracle’s attitude to open source this morning, especially this paragraph quoting Monica Kumar, Oracle’s senior director for Linux and open source product marketing:
“”We haven’t seen our customers asking for open source databases,” she told me. “Not many customers are interested in looking into the code and mucking around with it, and making changes to it. All they care about is ‘give me the best support, give me the lowest price of entry’.” For that Kumar pointed to Oracle Express.”
It is difficult to disagree with the second part of Monica’s statement. Cost savings are routinely cited as the biggest driver for open source database adoption, while the lack of robust support is the biggest barrier to open source adoption.
Certainly these were the findings of our survey of executives responsible for database purchasing, details of which were published in our recent CAOS report “Turning the Tables? ? The impact of open source on the enterprise database market” (more details here).
However, the first part of Monica’s statement is a straw man that we also addressed in the report - specifically in Section 5.6 “Who wants access to code anyway?”:
“The open source database vendors themselves admit that few customers actually want to view or modify the code,” we stated. “It is worth noting, however, that the third most important reason for deploying open source databases, according to the survey results, was avoiding vendor lock-in.
“This freedom from lock-in is a benefit of open source that the Express products cannot replicate,” we added. “In fact, they could actually be seen to do the opposite…. Proprietary vendors insist that this is not the case, and that the Express products provide freedom and flexibility equal to that of the open source products. They are advised to invest in articulating the relative benefits and use cases of the Express products.”
I also tackled this issue back in December, noting that for customers that understand the value of open source, access to code is important whether they want to modify it or not, for the following reasons:
* Open source adopters understand that it the open source model creates, at least in theory, a contestable model for support and services, freeing them from lock-in.
* They also understand that open source code increases the potential for innovation. Even if they don?t want to modify the code themselves, they can pay someone to do so to make it better suit their requirements.
* They are also reassured that should the vendor in question go belly-up or be acquired, the code will live on an continue to be developed by the community.
One of the key findings of our report was that open source database adoption has been widespread but shallow (the “glass half empty” finding). However, we also noted that open source database adoption will continue to grow, and that “the Internet application space… has been more or less ceded to the open source databases”.
It is no wonder Oracle hasn’t seen customers asking for open source databases - it has been busy looking the other way. We also advised that proprietary vendors need (among other things) to be aware of the open source competition, pay close attention to the service and value they provide to existing customers, and avoid arrogance. The last of those could be the most difficult.
On the Road This Weekend
Companies Can Make Money With Widget Ads
Selling advertising on entertainment-focused widgets such as Scrabulous or Zombies is about as easy as spinning straw into gold, yet there are plenty of people trying. And there are ways of generating revenue through specially focused widgets designed solely to sell rather than toss sheep. Brand and comparison advertising done through ad-focused widgets is emerging as a viable way of using the ubiquitous applications. Widgets’ interactive features, their ability to be virally distributed and potentially be placed on a target’s own page makes the creations appealing to advertisers.
Where that leaves startups such as RockYou and Slide, which develop entertainment widgets, and the ad networks that cater to those applications, is still unclear. I’m waiting to see if enough users buy into ads shown on their fun widgets or click through enough transactional widgets to make a viable business. However, existing online ad networks and possibly a few new widget creation and advertising firms are already proving that widgets aren’t just fun and games.
WidgetBucks is one such widget-creation/ad network company making money with this approach. CEO and Chairman Matt Hulett says the company sees click-through rates of 0.5 percent to 1 percent with its ads, which resemble interactive, dynamic banner ads. The company expects to pull in $10 million in sales this year. The company’s approach, however, has come with its share of drama, as some publishers have complained about WidgetBucks’ rates and practices.
When it comes to making his widgets a success for advertisers, Hulett based his design on the theory that people using widgets for fun aren’t expecting to be engaged in commerce, but people in other venues (such as those reading a product blog, for example) might welcome widget advertising that shows the latest deals on a device.
“It’s kind of like pre-roll advertising,” Hulett said. “It’s really hard when the context is around having fun. People do not like monetization in front of those platforms and the CPMs are awful.”
A similar approach to using a widget as a more interactive ad rather than entertainment is Toyota’s new campaign for its Scion vehicles, which launched on Tuesday. This is an example of widgets as brand advertisement, which can be spread virally around the Internet. The idea is that consumers use the widgets on social media sites as an identification of their aspirations, much like one might wear a Nike shirt.
Adrian Si, an interactive marketing manager for Scion, says the firm is using widgets as an extension of the rich media banner ads it runs through Interpolls. Si is hoping to achieve the same 1 percent to 2 percent click-through rate Scion sees using Interpolls’ rich media banners. That translates to a 4 percent to 5 percent engagement rate. Scion will measure both click-throughs as well as the number of times the widget is installed on someone’s site.
“This could be more valuable [than banner ads],” says Si. “Obviously, it shows they have a lot of interest in the brand. On their MySpace pages they can put a whole bunch of stuff, so it must have meaning to them. It’s also an opportunity to get our brand in front of them every day.”
Listening to these two companies I realized that widgets aren’t a new business, but rather a new form of advertising and entertainment. Those focused on advertising are making money; the question is, will the ones focused on entertainment do so, too?
