The Open Road

I'm at a Red Hat channel event, listening to Toni Clayton-Hine, managing director of of The Institute for Partner Education & Development, CMP Media, talk through software acquisition in the recessionary economy, especially as it pertains to business partners (e.g., VARs, resellers, system integrators, etc.). CMP Media surveyed 250 North American partners to try to get a read on their customers' spending priorities and directions, as well as channel priorities for 2009.

The data are interesting:

• Economic uncertainty is pushing companies to prove technology before buying it, which skews toward open source, which is all about try-before-you-buy;
• Fewer trusted options - many vendors meet or exceed requirements, so buyers want to spend with brands they trust (Note: Ironically, the "try before you buy" mentality will not always mesh well with this requirement, due to conflicting licensing models);
• End-customers are planning smaller initial projects, with incremental add-ons (Advantage: open source and SaaS, since both allow vendors to start small and grow organically);
• 48 percent of end customers are looking to streamline business processes, rather than pure cost-cutting. Basically, they want to spend money more efficiently, rather than simply cutting heads;


Where End Customers Plan to Spend Budget

• 75 percent of end customers are buying some version of managed services, but the definition of "managed services" is quite broad;
• 27 percent of channel partners expect to increased their business by more than 15 percent, 40 percent expect to grow their business by five to 15 percent, and 24 percent plan no changes, suggesting that IT spending may not crater as much as expected in 2009;
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The Financial Times' Richard Waters wrote an excellent analysis of Sun's open-source strategy on Monday, and in the process reminded me of something that should have been obvious:

Open source is the very thing that has crippled Sun, yet Sun is looking to open source, to hobble its competitors and revive its future. We often talk in the technology industry about the need to cannibalize your own business before someone else does it to you. Sun may be a little late off the starting blocks, but it's fascinating to watch its race against time.

From Waters' article:

By turning to the Linux operating system, which is distributed free of charge and runs on low-cost, standardised servers, many of Sun's customers were able to free themselves from the company's more expensive proprietary servers and software.

Mr Schwartz's response: not only, belatedly, to co-opt open source himself, but to use the approach to try to subvert whole new areas of the technology business.

Having open-sourced its own Solaris operating system, Sun has now tried to corner the market in open source databases with its $1bn purchase of MySQL, the database management system. It now also has its eyes set on the storage market, with a plan to inflict the same pain on incumbents there that it has itself felt from the rise of Linux.

It's a hugely gutsy move. It remains to be seen whether it will work, but with Sun's OpenStorage business growing dramatically faster than the rest of the storage industry, it just might work.

The 451 Group's Matt Aslett has some suggestions for how to maximize Sun's open-source growth, including some improvements to its MySQL business like an open-source Business Intelligence acquisition (JasperSoft, Pentaho, or Actuate, anyone?), each of which make sense to me. The net? Now that Sun has started down the open-source path, it needs to go all the way, rather than making half-steps that end up slowing its pace.

I read this CNET interview with Microsoft CRM division general manager Brad Wilson, and it felt like I was reading an interview with SugarCRM CEO John Roberts.

No, Roberts doesn't talk about lock-in, monopoly power, and such, but then, neither does Wilson.

Instead, Wilson discusses values that are core to open source: adoption, choice, and lower cost (as well as open source!)

When asked how Microsoft CRM is going to win in the market, he said:

...[F]or us, user adoption is key. If they (the users) are not going to use the system, you are pretty much guaranteed a failed deployment.

We give you enough flexibility so that you can run the system how you want to. So I find we will beat a classic offering from your CRM vendors on end-user adoption and platform flexibility. Those factors will far outweigh the fact that other people have more prebuilt stuff [only 7 percent of which, at least in one case, actually fits without modification]....

I think the old model of 10 years ago, where you built a system that had a big slab of stuff that you had to adopt, has gone. At the same time, we will still bring out our accelerators with pre-packaged software, and more and more of them. But we release them as open source. The idea is that we just put this stuff out there and let people use it. And, if our partners use it, all the better.

Did you catch that? Instead of making its core open source, as SugarCRM does, Microsoft is going the other way, open sourcing the complements to its core. You pay for the core, but the complements are free. It's an interesting twist on the open-source model, and particularly so since it's being used by Microsoft.

We're definitely seeing convergence in the market: proprietary vendors embracing open-source complements, and open-source vendors embracing proprietary complements. This, however, is the first time I've seen Microsoft baldly identify open source as a key business strategy.

The times they are a-changin'.

I used to think that Microsoft would make a likely suitor for SugarCRM. Now it appears it decided to become SugarCRM, instead.

Disclosure: I am an adviser to SugarCRM.

Red Hat CEO Jim Whitehurst has been talking for the past year about how a vast, largely unexplored repository of great software is the enterprise, and how much value could be unlocked by open-sourcing it.

Open source creates better software, Whitehurst argues, so why not expand its value by expanding its community?

The Massachusetts Institute of Technology apparently has heard the call, opting to open-source its Mobile Web project, as reported by ReadWriteWeb. The code "offers a staff and student directory, a campus map, the shuttle schedule, an event calendar, class announcements for students, emergency information, and status updates for many of MIT's tech services."

In other words, it offers much the same functionality that every university would likely want to provide its students and faculty. Because MIT has open-sourced the code, there's the potential for a community of universities to co-develop the project further, reducing MIT's support burden for its code and enriching the code base.

It's perhaps not surprising that MIT, which has won awards for its open-source innovations in the past, is the institution behind the open-source Mobile Web project. What is surprising is that so many universities and enterprises persist in reinventing the wheel, dumping resources into writing software that is common across their market segments that could more efficiently be created or maintained by a community.

Time to follow MIT's lead. Time to embrace open source and its efficiencies.

In a post on Computerworld UK, tech writer Glyn Moody tackles the ever worsening outlook for Microsoft Vista, and comes up with an absolute gem of a thought in the process:

What's really important about this is not so much that Vista is manifestly such a dog, but that the myth of upgrade inevitability has been destroyed. Companies have realised that they do have a choice - that they can simply say "no". From there, it's but a small step to realising that they can also walk away from Windows completely, provided the alternatives offer sufficient data compatibility to make that move realistic.

Indeed. While Moody would undoubtedly like to see more of that Vista angst turn into Linux love, it's more likely that it's helping the Mac, which saw its market share jump again in November to nearly 9 percent, according to Net Applications.

For all the lame things Apple does (like fighting open-source iTunesDB to protect its DRM-heavy iTunes), and for all the great things that Microsoft has done, as Directions on Microsoft recently noted, Apple provides a viable, compelling alternative to Microsoft, and people are taking that choice.

To Moody's interest in desktop Linux, there is no reason to think that the move to the Mac will stop there. Once people have rediscovered choice, they're unlikely to trade one monopoly for another. I'm a good example: I love my Mac, but most of the applications I run on it are open source. When forced to work with an "office productivity" application, I split my time between Microsoft Office and OpenOffice (which I use almost exclusively for presentations because it has a better feature set).

That's what choice does: it doesn't mean we trade one overlord for another. It means we keep the competing overlords...competing.

If you've traveled internationally, you know that airfare is often the cheapest part of the trip. The big ticket item, oddly enough, is often roaming charges. Last year I was hit with a $1,450 bill for fewer than three hours of online time in Canada. Others have been hit with far worse.

It's therefore gratifying to read in Ars Technica that the European Commission, which has taken on Microsoft and others, has turned its attention to the abusive roaming charges that wireless carriers inflict on consumers.

According to the European Commission, citizens are charged an average price of ?0.29 for sending a text message while abroad by carriers like Vodafone and O2....The European Union announced plans in July to challenge what it called the "roaming rip-off," and the proposed caps have been set at a retail price of ?0.11 and wholesale price of ?0.04 for text messages. The proposition is now in the hands of the European Parliament; if the cap is approved, it will go into effect on July 1, 2009.

Other proposed changes include a retail cap of ?1 per roaming megabyte, as well as the introduction of an automated message that informs the user of the roaming data charges....Finally, a cap on roaming voice call prices set in 2007 could be lowered further, as the proposition seeks reduce the current ?0.46 cap on making calls to ?0.34, and the ?0.22 cap on receiving calls to ?0.10. Those changes would be in effect by July 1, 2012.

It can't come soon enough. There doesn't appear to be any credible reason to maintain sky-high roaming charges internationally. Remember when the wireless carriers insisted upon charging exorbitant domestic roaming charges? Funny that they managed to survive once they dumped those. The same should hold true for international roaming charges.

It's time to encourage a free market in mobile by removing, or at least severely limiting, roaming charges. It's good to see the European Commission taking the lead in this.

BusinessWeek talks out of both sides of its mouth on Monday, on one hand carrying an op-ed piece from Collaborative Software Initiative's Stuart Cohen arguing that the "open-source business model is broken," while on the other hand talking up how enterprises are turning to open source to save money and drive productivity in tough times.

Which is it?

It's both, of course. Cohen is referring to a bit of a straw man when he claims open source is dead, referring to support-based business models that don't add "proprietary" value beyond the base, open-source code. All successful open-source companies have always had some value-add beyond the base code itself, whether that company is Red Hat, MySQL, SugarCRM, Zimbra, or IBM. We've just become more open about calling it out.

Cohen is therefore right to declare:

Open-source code is generally great code, not requiring much support. So open-source companies that rely on support and service alone are not long for this world. The traditional open-source business model that relies solely on support and service revenue streams is failing to meet the expectations of investors.

So we need more efficient ways to monetize open source. Point taken. But customers aren't waiting. As E*Trade Financial Chief Scientist Lee Thompson tells BusinessWeek, the benefits of open source are too good to ignore, and go well beyond acquisition cost:

For some companies, the benefits of open source extend well beyond cost savings, to such areas as license management. "Your engineers spend less time on contract negotiation and more time on the technology, which is really what you want them to be doing," says E*Trade's Thompson.

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In the annals of history, November 28, 2008, is unlikely to stand out as a Big Day in Computing. What happened? Well, a group of developers ported Linux to the iPhone, setting off a wild night of Digging and backslapping.

Meanwhile, not a single person outside the geekiest of the Linux community could even muster a yawn.

One member of the iPhone Dev Team tried to posit some compelling reasons for the port, but the best it could muster was this:

...iPhone Linux will actually be of tremendous value. There will be no more need to port applications over: The applications already run on the iPhone! Also, with a familiar kernel, we can do all kinds of things I've wanted to do: doing security related work with the wi-fi for example. Plus, knowledge that we are gaining/will have gained about the iPhone hardware will be of incredible practical value to the homebrew iPhone community. We've always wanted to be able to plug in the iPhone as a simple USB mass storage device. With USB and NAND FTL drivers, we can actually implement this ourselves.

So, there you have it. Are you racing to the AT&T store to buy an iPhone that you can hack to run Linux and all of its many (?) applications? No, I didn't think so.

Look, Linux is fantastic. There's no question about that. But there also should be no question that it's not really all that useful on the iPhone. It's nice that someone proved with a science project that they can run Linux on the iPhone, but it has little practical value even for the Linux community, much less than mainstream users who just want something that works, and don't inquire into operating systems.

The Linux community has better things to do.

It's a rough market, and likely to get worse before it gets better. For those (developers or otherwise) who think they may need to be finding new employment soon, I'd highly recommend that you sign up for the Open Source Group on LinkedIn. New jobs are constantly being listed. Here are a few from today:

Open Source Jobs on LinkedIn

(Credit: LinkedIn)

The group provides other useful information and services, but given the criticality of employment, it may be the first thing that catches your eye.

Thanksgiving football and feasting has yet to begin, but I wanted to take a minute to reflect on technology's role in my life. We live in a pretty amazing time, with tremendous opportunities to use technology to resolve big problems.

Here are just a few of the reasons why I'm grateful for technology, or technologies that make my life richer:

• Air travel. The other day I flew from my home in Utah Silicon Valley to meet with customers, speak at Adobe Max, and then fly home again that same evening. Over 1,000 miles flown in a single day, splitting breakfast, lunch, and dinner between different time zones. What an amazing thing.
• Costco berries. This probably doesn't seem like a marvel of technology, but given the sophisticated logistics, farming, and transportation systems that can move blueberries from Chile (or wherever) to my refrigerator in just days, allowing me to enjoy them for days thereafter, is amazing. (And, yes, Costco really does have amazing berries.)
• MacBook Pro. Sorry, but I absolutely love my MacBook laptop. You can replace "MacBook Pro" with the the laptop of your choice, but I particularly love my Mac for its beautiful interface and elegant design, as well as the creativity software that it has: I use iMovie and iPhoto almost daily to create family videos and photo albums. My Mac makes my personal life richer.
• Social networking. Over the past years I have made some excellent hires using LinkedIn. More recently, I was able to reach out to a girl on whom I had a crush in fourth grade and catch up with friends that I haven't seen in years using Facebook. The Web truly has made the world a smaller place.
• Medical technology. My grandmother hasn't been in the best of health lately, but has recently grown stronger through technology-driven pharmaceuticals, which were prescribed after tests with high-tech medical equipment. Perhaps not as obviously rich in technology, but I'm also able to call her from wherever I am in the world to check in on her. On that note, my parents (who live in Argentina) call her every other day for roughly $0.00 using Vonage. VoIP is a blessing, too.
• Blogging. Web publishing has become extraordinarily easy thanks to WordPress, Movable Type, and other blogging software. Thank you. Most of the best technology commentary would be largely unavailable without this rich publishing software.
• The Web. It's so pervasive now, we take it for granted. But my life has changed forever because of the Web. How else would I follow the Arsenal games (over streaming audio/video)?

These are just a few technologies for which I'm grateful on this U.S. holiday. Thank you to all the engineers who have made so much possible through technology.