The Keene View on Web 2.0, Ajax and SaaS

Open source companies live or die by the health of their communities. WaveMaker's proudest achievement last year was creating a passionate and rapidly growing community.

Thinking back, probably our most important decision affecting community health was made early in the year, when we decided to dump our AGPL license in favor of Apache.

Although we had never gotten direct feedback that the community didn't like AGPL, we had more forum posts than we thought was healthy that asked pointed questions about our licensing. This let us know that people were confused, and if there was any doubt in our minds, the licensing debacle at Ext js convinced us that Keep-It-Simple-Stupid is the only way to go here.

Once community developers felt confident that they could do what they wanted to do with our Community edition without somehow triggering a commercial fee down the road, the community literally exploded. Together, here is what we accomplished in 2009:

• Stunning community growth: 18 months after our product launch, the number of registered developers for WaveMaker (15,00) is about one third the size of the Spring community (49,000)!
• Profitability: WaveMaker closed 2009 as a profitable company and saw revenue growth of 53% in our last 3 months!
• Gartner recognition: WaveMaker was featured in 9 different Gartner reports last year, including one which identified WaveMaker as the only open source platform for cloud development!

Why the tidal wave of support for WaveMaker? That's easy - WaveMaker makes it ridiculously easy to build great-looking, standards-based Java applications.

• Web 2.0 enabler: at companies like Macy's, National City Bank and Pioneer Energy, WaveMaker enables non-Java developers to create Java apps with minimal training.
• Productivity multipier: at ISVs and systems integrators, WaveMaker reduces development costs for Java and Web 2.0 applications by over 75%.

Labels: Community, open source, WaveMaker

Platform as a Service (PaaS) offers a way to build and deploy applications entirely in the cloud. This market was pioneered by SalesForce and their Force.com PaaS offering.

PaaS offers the potential to democratize web development by enabling anyone who can use a browser to assemble and extend web-based applications. Yet early PaaS players, including Force.com, Bungee Labs, Google AppEngine and Microsoft's Azure, have introduced PaaS solutions that are remarkably proprietary.

A proprietary PaaS solution introduces high switching costs to move data or logic from one PaaS provider to another. For example, moving an application from the recently deceased Coghead to AppEngine would require a wholesale rewrite of an application written on one proprietary framework to another.

In short, customers adopting PaaS gain access to powerful new technical capabilities but at the cost of stepping back to the proprietary business models of 20 years ago. Surely the same market forces that have driven greater transparency in the enterprise software world will also prevail in the brave new world of cloud computing!


In talking with customers and analysts, WaveMaker has introduced the term Open PaaS to describe what the next generation of cloud development tools should look like. In our definition, Open PaaS solutions have four characteristics:

1. Portable - customers must be able to run applications built using PaaS tools on multiple cloud offerings. PaaS offerings based on proprietary languages (e.g., SalesForce, Bungee, Coghead) lock customers into a single cloud provider.
2. Based on open standards - customers must be able to leverage existing skills such as Java and Javascript to build applications using a PaaS tool. Offerings that are based on proprietary software stacks (e.g., Google AppEngine, Microsoft Azure) lock customers into a single cloud infrastructure.
3. Available as open source - customers must be able to run applications created with PaaS in their own data center in an open source environment . SugarCRM pioneered the attractive concept of letting the customer "take their ball and go home." For PaaS vendors, it is even more important that customers be able to move a cloud app from the cloud to behind their firewall.
4. Mobile-aware - increasingly, web enablement reaches beyond the desktop browser to smartphones from companies like Apple, RIM and Palm. Customers need PaaS tools that can deliver device-appropriate content and functionality. Effectively, this is an update of the old Java "write once run anywhere" mantra.

As the cloud evolves, it is inevitable that customers will demand more flexibility. With that in mind, WaveMaker recently became a supporter of the Open Cloud Manifesto, a very timely effort spearheaded by Reuven Cohen, CTO of Enomaly.

You can read the Open Cloud Manifesto here, but here is my take on the 6 principles of the Open Cloud Manifesto (the bold titles and italic comments are mine):

1. Commit to cloud interoperability: Cloud providers should collaborate to solve standard problems (e.g., security, interoperability) in a standard way. At a minimum, this requires publishing the APIs needed to build interoperable security and other services across cloud providers.
2. Eschew vendor lockin: Cloud providers must not use their market position to lock customers into their particular platforms. This goes to the heart of the problem. If you are at the head of the pack, why slow down and let others catch you? The answer can only be because doing so gives you access to a much bigger market, of which you are still at the head of the pack but with a smaller lead!
3. Adopt existing standards aggressively: Cloud providers must use and adopt existing standards wherever appropriate. This will be much easier for new cloud vendors, who are starting from scratch, than existing cloud vendors, who built out their infrastructure before many of these standards existed.
4. Minimize proliferation of new standards: When new standards are needed, Cloud vendors must be judicious to avoid creating too many standards. We must ensure that standards promote innovation and do not inhibit it. This shows great wisdom in the ways of the world. What are most standards bodies anyway but the effect to gain or preserve market share by non-market driven means?
5. Focus new standards on actual customer needs: Any community effort around the open cloud should be driven by customer needs. This is another swipe at the self-serving approaches of many standards bodies. From a cynical perspective, we will know cloud computing is successful when its standards bodies become just as opaque and non-customer focused as other entrenched standards like Java ;-)
6. Cooperate between standards groups: Cloud computing standards organizations, advocacy groups, and communities should work together and stay coordinated, making sure that efforts do not conflict or overlap. This is well-intentioned, but also seems to be saying "thou shalt have no cloud advocacy groups before me" (shouldn't that be commandment I?)

Just like that large collection of tubes called the Internet, this notion of Open Cloud and Open Platforms is here to stay!

Labels: cloud computing, open source

The open source world has been very, very good to WaveMaker. We have a thriving online community, and through our community we have attracted customers like Cisco and Macy's, along with partners like IBM and KANA.

The open source world thrives on transparency and trust - a potent combination.

Yet every so often we get tempted to go back to the bad old proprietary world where decisions are made based on opacity and who you know.

With jaw-dropping naivete, I paid $1,100 to an organization called the Software Information Industry Association (www.siia.com) in order to participate in their Codies awards contest.

I was snowed by the idea that the SIIA's crack panel of judges performs thorough evaluations on scores of software products to glean "the best of the best." Unfortunately, the reality was much more mundane.

I don't know what process the winners go through, but I have detailed knowledge of the process for Codie losers. To help you save over $1,000 ($850 membership + $250 contest fee), I will share this process with you:

Process For Losing the Codie Awards [Guaranteed to Work]

1. Pay $1,100 (very important!)
2. Get assigned a judge (up to you to set up a meeting!)
3. Set up a meeting
4. Reschedule meeting when judge fails to show up for meeting
5. Repeat steps 3-5 until contest is over
   
6. Receive written evaluation from judge which demonstrates that they make up in chutzpah what they lack in integrity

In our case, the "judge" was Paul Cohen, who certainly didn't take off any time from his job at the Beverly Hills public schools on our behalf. His evaluation was that WaveMaker is a "very pricey set of web controls." It doesn't take great technical expertise to observe that this is an odd description of an open source, web-base IDE.

Ah, I thought. The Codie awards manager, Lisa Mitchell will help! After all, she helped arrange the meeting with the judge and knows that the promised meeting never happened. Not surprisingly, she has become as difficult to reach as our judget.

But then there is that ultimate arbiter of justice, the CEO of the SIIA, Ken Wasch. Surely when he sees how egregious our case is, he will at least agree to have another judge at least look at our product. After an initial friendly call, I have heard nothing from him either.

The process for losing the Codies is very transparent. The process for winning is less so.

It's a good thing that "who you know" awards are being replaced by the voice of the open source community. Shame on me for ever doubting it!

Labels: open source, siia

I spoke on a panel at Mashup Camp this week on why Ajax Standards matter. I was quoted by Doug Henschen of Intelligent Enterprise as saying that we are locked in a struggle for the soul of the web, so I thought I would expand on that theme.

Labels: AJAX, open source, RIA

One important goal of open source software is to drive rapid adoption of a new product. Effectively, open source downloads become a marketing channel for producing qualified sales leads.

Yet there are not many metrics available by which to judge the success of an open source channel. What percent of web site visitors should download the product? What percent of downloads should register in the community? Finally, the all-important question: what percent of registered downloads should convert to paying customers?

We have been tracking downloads and conversions religiously (with lots of help from smart people like Marten Mickos at MySQL, Brian Gentile at JasperSoft, Rod Johnson at SpringSource and Andrew Aitken at the Olliance Group). I thought it would be useful to summarize what we are seeing in our community around downloads, product adoption and conversion to paying customers.

Metrics since product launch (3/08)

The punch line is that WaveMaker will have over 700 paying customers by the end of the year, both through direct community adoption and through channel partners.

• 29,261 web visitors per month
• 9,972 downloads per month (28% of visitors)
• 1,132 download registrations (e.g., new community members) per month (11% of downloads, 4% of visitors)
• 600 community postings per month (11% of downloads, 4% of visitors)
• 1,050 marketing leads per month
  
• 700 paying customers by 12/08 - including direct and channel customers (through OEMs)
  

What Drives Web visitors?

WaveMaker is an easy to use development tool for web applications. Our motto is: if you can use a browser, you can build a web app with WaveMaker. The main driver for WaveMaker web visitors is new product releases. With each new product release, the open source network springs into action via sites like SourceForge and FreshMeat, as well as specialty sites like dzone and Ajaxian.

For three weeks after a new release, we see the web site volume goes up by a factor of 5 over the previous 30 day moving average. After that, web traffic settles down to a new, higher level (typically about 20% higher than the previous moving average).

What Drives Download conversions?

The percent of web visitors who download has inched up from roughly 20% of visitors to 28% of visitors as we have gone through various iterations of our home page. As the messages have gotten simpler and the graphics more compelling, the download rates have climbed.

What Drives Community conversions?

So far, conversions from download to actually registering with the community has been our Achilles heel. One interesting metric is that the conversion rate goes down when the download volumes go up and we aren't really sure why (could be as simple as the Drupal registration engine getting backed up).

Converting Open Source Downloads to Customers

Once developers have registered with the community, they get regular newsletters and emails from our field technical people. We have found that by far the most effective marketing activity is our personal emails from field technical people to potential enterprise prospects. Instrumenting our email outreach program is another important todo for our marketing team.

These conversion numbers are pretty lumpy - a small number of channel partners can have a big impact on customer numbers, particularly at the beginning. Most of our leverage at WaveMaker has come from small systems integrators and ISVs, both of which act as channels to amplify the activity that is already being generated by our open source channel.

Summary

Converting web visitors into paying customers remains more of an art than science. What we have proven is that for enterprise software, it is possible to attract a large number of paying customers in a short time using an open source channel.

Labels: business model, marketing, metrics, open source

Larry Augustin recently wrote about the differences between how Europe and the US view the open source software market. His comments came after attending the Olliance Think Tank conference in Paris this week (tough assignment, that).

He identified a number of differences between how Europe and the US view open source. For example, he gives the primary European reason for adoption open source as wanting to avoid vendor lock-in, while the primary reason for adopting open source in the US is cost.

While recognizing the differences, I think that the open source business model is tending to converge on the dual-license approach that I outlined in the Silverado Rules for Open Source Software. So what accounts for these regional differences?

I believe the biggest single factor to explain these differences is the underlying attitude towards Microsoft. In the US, where Microsoft is seen as a successful, if aggressive, competitor, adoption open source is a business decision, that is to say based on cost and ROI.

In Europe, where Microsoft is seen as a malignant force, adoption of open source is seen as a political decision, that is to say based on and ideology that trumps business considerations. Viewed this way, the differences described by Larry between the two geographies are very consistent, particularly if you just insert the word Microsoft at strategic points.

For example, on the first observation, the primary reason for adopting open source in Europe is to avoid [Microsoft] lock-in; while the primary reason in the US is cost, as Microsoft lock-in per se is not seen as a bad thing.

At the end of the day, open source is not so much an ideology as an evolution in how software is developed and distributed. For WaveMaker, open source is a great way to accelerate adoption of our free JavaScript download for building web applications.

Labels: microsoft, olliance, open source

In the first day of our Open Source CEO shoot-out, Esther Schindler asked how companies should go about finding open source projects:

Let's say that a company is philosophically willing to use open source. How does it learn about the best software for the company's purposes?

Bob Zurek of EnterpriseDB notes that open source awareness is promoted by hiring open-source savvy IT people:

Businesses are gaining key knowledge about open source software by employing the next generation of young IT professionals who grew up using open source software like Linux, PHP, PostgreSQL or maybe MySQL.

Matt Aslett responded by referencing a report from the 451 group about what open source database vendors need to do to take on the commercial vendors. He also points out:

The selection process [for open source software] tips the balance of power much more in favour of the customer in that they are able to download the software and ensure it fits their needs before engaging in a commercial conversation with the vendor.

I noted that open source doesn't have to mean marketing impaired. Open source isn't an excuse for poor marketing, it is a strategy to reduce marketing and distribution costs.

Here is a simple test. If you are looking for a technical solution - for example a visual ajax tool - you should be able to type "visual ajax tool" into Google and get both open source and proprietary solutions (all about WaveMaker, naturally ;-).

Read the Silverado Rules for Open Source Success for more on how the open source business model is evolving.

Labels: open source

Esther Schindler of CIO Magazine is hosting an executive online briefing on Open Source in the Enterprise. She has invited me and a number of much more famous CEOs to sound off on a variety of enterprise open source and Web 2.0 topics over the next week.

I am the open-source newcomer in the group, dragged kicking and screaming from my bad old proprietary software background as CEO of Nasdaq-listed Persistence Software into this brave new world of open source.

Despite being a newcomer, I have seen first-hand both the power and limitations of the open source model. At WaveMaker, I saw our download volumes soar by a factor of 20 in two days when we launched our open source product in February - from 50 downloads a day to over 1,000 downloads a day.

At the same time, I am now sitting on the edge of my seat waiting for the revenue from all these downloads to show up. Will people really pay for a visual development tool for Web 2.0? Will they be willing to pay enough?

In short, the life of an open source CEO is full of excitement and terror!

The other illustrious open source executives in the CEO shoot-out include:

• Marten Mickos, the new Sun database czar and living proof that you can be a nice guy and a very successful open source CEO.
• Rod Johnson, the CEO SpringSource and the person who saved Java from its EJB madness.
• Brian Gentile, president and CEO of JasperSoft and one of the most influential early evangelists of Java.
• Bob Zurek, CTO at EnterpriseDB and mastermind behind their Blades partner ecosystem.
• Lila Tretikov, CIO, SugarCRM and very articulate spokesperson for the open source movement.
  
• Fabrizio Capobianco, the CEO of Funambol and a key force behind the AGPL license.
• Bob Sutor, the vice president of Standards and Open Source for the IBM Corporation.
  
• Domas Mituzas, Wikipedia's (board member, active participant in tech projects, and senior manager at MySQL).
• Jon Ferraiolo, leader of the OpenAJAX Alliance
• Mike Milinkovich, Executive Director of the Eclipse Foundation
• Joe 'Zonker' Brockmeier, Novell SUSE Evangelist.
  
• Bernard Golden, CIO blogger about open source issues.
  
• Dominic Sartorio, president of the Open Solutions Alliance.
  
• Chris Keene, CEO of WaveMaker. In past and parallel lives, I write the keeneview blog about Web 2.0 technology, used to write a much cooler SF in Paris blog about teaching entrepreneurship in France (no that is not a contradiction in terms!) and generally worry about how we can all get along on our little pebble.
• Matt Aslett, an analyst in The 451 Group's Enterprise Software group who specializes in open source software and contributes regularly to reports on the topic.
  
• Ira Heffan, legal counsel for TopCoder, who has been involved in GPL v3 and other open source licensing discussions.
  
• Ron Gula, Ron Gula, developer of Dragon IDS and the CEO of Tenable Network Security which produces the Nessus vulnerability scanner.
  

Somewhat of a cast of thousands, I will admit, but it should produce some interesting debate over the next week!

Labels: open source, oss

Of the many sins that Silicon Valley practices, none are more dangerous or prevalent than the sin of smugness.

Savio Rodrigues has a good posting entitled Microsoft will prevail in the face of Freetards. His point is that Microsoft is learning from and adapting to the open-source movement, while the open-source movement is so enamored with "free" that they are not paying enough attention to the total cost of ownership from a customer's perspective.

Let's be clear - the free part of open source is a great innovation and worthy of a few minutes of self-satisfaction. The aftermath of the Y2K bubble was the erection of enormous barriers around IT to prevent tem from trying anything new that would cost the company money.

Free provides a "frictionless" entry point for new technology products into the corporation after finance barred the door. Free also enables technology self-service across the corporation, making it possible for anyone with an internet connection and a geek gene to get as wired as they wanna be.

However, free is only worth so much. If it takes me 3 hours to get my "free" open source download working, it cost me however much I or my boss thinks my time is worth x 3 = not free. Similarly, even if an open source product (for example Dojo) is technically superior in every way to Silverlight, that superiority is of no practical value if it is easy to hire experienced Silverlight developers but next to impossible to find, let alone hire, Dojo developers.

Thinking that free is the only aspect of software that matters is freetarded. This is where Microsoft can beat the open source community in general, just as its .NET platform is beating J2EE.

Let me quote from the insanely great Fake Steve Jobs blog:

Red Hat, the single company freetards always point to when they want to prove that open source can make money, has turned inept, with nothing but bluster and bravado and a deluded belief that they're actually a thorn in Microsoft's paw. Bottom line: they're the new Borland. They're 15 years old and have been publicly traded since 1999 and last year they did all of $400 million a year in sales. Microsoft does more than $1 billion a week. That's right. Red Hat's entire fiscal year is a good three days for Microsoft.

Microsoft is onto us. Time for open source software vendors to think beyond free.

Labels: ASP.NET, DOJO, j2ee, open source, Silverlight

With the success of companies like MySQL, JBoss, Cygnus and SleepyCat, open source software has introduced major changes to the way corporate IT adopts new technology. Yet open source business practices have a long way to go before the industry as a whole is fully embraced by CIOs.
At the Open Source Think Tank, a panel of ten CIOs declared that the patchwork quilt of licenses and business practices among open-source vendors is a major barrier to enterprise adoption of open source. CIOS believe that vendor standardization on a simple and commercially attractive business model will help drive broad corporate acceptance of open source software.

After attending the Open Source Think Tank held in February, 2008 at the Silverado resort, I am convinced that a best-practices model is emerging for enterprise open-source software vendors. In honor of the think tank event, I am dubbing these practices the Silverado Rules for Open Source Success:

Open-source vendors should adopt the following best practices to optimize community participation while developing a viable commercial business:
1. Fix the last mile problem
2. Optimize for community and commercial growth
3. Play by the community rules
4. Implement role-based pricing
5. Enable on-site and on-demand deployment
6. Adopt a dual license strategy based on GPL + Commercial License
Following these rules may not lead to guaranteed business success, but ignoring them may well lead to failure!

Please feel free to enter comments and criticisms on my blog.

Fix the "last mile" problem

Open Source Software (OSS) communities are outstanding at solving hard framework problems, but not so good at producing user-friendly solutions. Once the community has solved the hard problem, it tends to lose interest in solving more mundane problems like documentation, management and monitoring.

CIOs need open-source vendors to be more like commercial vendors in "putting a bow on the package. Corporate users are looking for open source products to have commercial-grade documentation, usability, installation and support.

Optimize for commercial and community growth

The first generation of open source companies were project-driven. Companies like MySQL, JBoss and SleepyCat created large communities and then struggled to evolve business models that commercialized that community. Often, they faced significant resistance from early community members, particularly on introducing more restrictive licenses that forced users to pay for things they had previously gotten for free.

The newer, second generation of open source companies is following the opposite process. Venture-backed companies like Alfresco, Mindtouch and Wavemaker started with a commercial focus and are now working to create vibrant communities.

These second generation OSS companies have a completely different set of challenges than the first generation. They have much more control over intellectual property and choice of licensing, but much more work to do on the community-building side.

Open source companies should see themselves as part of a larger supply chain, determine how to add upstream and downstream value. At WaveMaker, we are a major consumer of open source - our product is based on Spring, Hibernate, Json, Dojo.

We get value from their communities and in turn we add value to their communities by providing an open source framework for visual AJAX web development. Our goal is to broaden the overall size of all of our communities by democratizing the development web applications - essentially an open-source version of Visual Basic.

Play by the community rules

Communities are the life-blood of open source companies. Yet the process of creating a community is still more of a black art than science. Experts in community have developed a simple set of three rules for building successful community:

1. Set the rules early: spell out the role of the community in developing, extending and supporting the product. For example, define the ideal participants of the community, and the benefits they would expect to receive to entice them into membership in the community.
2. Play by the rules: once companies set the rules for the community, they should enforce those rules scrupulously, through active community management. Hell hath no fury like an open-source community member scorned!
3. Don't change the rules: as the business of the company evolves, there will be pressure to change how the community operates. For example, companies may decide that they want to take more support business from the community. Not a good idea - see rule #2!

Community experts also agree that the most important community building task is to create heroes within the community. The most effective way to do this is through dedicated community managers who go through a lengthy process to nurture and reward active community members.

Implement role-based pricing

I have written before that David Skok feels the success of JBoss lay in their ability to give developers a free product while charging commercial IT operations for support and management tools. CEOs of open-source enterprise software companies believe that a key element of any enterprise open-source company is realizing that there are no scalable dollars in selling to developers.

The role-based pricing approach can be summarized as follows:

• Developer use open source tools for free: making a product free for developers creates a "frictionless" entry path for new technology into an organization. Small scale, "under the desktop" deployments are also free, making it easy for IT architects to prove out a technology with small pilot projects. Developers should be able to use all the development capabilities of the product without restrictions (everyone hates crippleware!)


• Administrators pay for commercial support: when a project built with an open source tool is deployed into a business-critical environment, operations people will require commercial-grade support, including updates, patches and upgrades. Operations roles will also value management and monitoring capabilities that enhance the security, reliability and performance of the deployed application.

It is important to point out that role-based pricing does not mean charging administrators for the same thing that developers get for free. It means identifying services and functionality that are of particular value to administrators and charging for those add-ons.

The revenue opportunities in enterprise open source lie in selling support and value-added functionality for operations and production. Free development tools are the on-ramp to production revenue. This also ties the vendor's success to the successful deployment of the customer - the ultimate win-win for enterprise software.

Enable on-site and on-demand deployment

Moving forward, it is likely that the open source world will continue to migrate towards on-demand offerings, even for enterprise development platforms. Software as a service (SaaS) pricing is easier for business applications like Sugar CRM, but it will increasingly make sense for infrastructure software as well.

There are three drivers for this movement:

1. Low start-up cost for customer: with nothing to deploy on site, customer adoption is as easy as creating an online login.


2. Higher rate of conversion to paying customers: for vendors, SaaS customers often convert more quickly paying customers, a big improvement over the single digit conversion rates more common to traditional open-source communities.


3. Business model fit: subscription payments for on-demand services fit naturally with the existing open-source subscription licensing model.

Enterprise development software has traditionally been delivered on site. In the future, it is very likely that corporations will at a minimum want an option to deploy applications on-site or on demand (a feature already supported by WaveMaker Software, among others).

Adopt a dual license strategy

Over the last ten years, the open-source community has matured greatly. Although the GPL remains the most popular open source license (~70% of open source projects use GPL, according to Freshmeat), the most commonly used version was released in 1991. Much has changed since then, and to reflect these changes, the new Gnu Public License (GPL) v3 offers- among other things - greater compatibility with the Apache license while ensuring that open source contributors receive public acknowledgement for their contributions.

There are a number of other popular open source licenses, each with its strengths and drawbacks. For example, Apache allows big companies to "expropriate" the work of smaller open-source companies without even acknowledging that contribution, making many open-source startups are leary of adopting the Apache license.

In addition, traditional licenses like GPL v2 and Apache do not provide explicitly for SaaS distribution. To get SaaS companies to participate in the open source movement, the best solution today is to adopt the newer GPL v3 license with the Affero extension for SaaS usage.

The combination of GPL v3 with the Affero extension is new, but seems to have momentum. I spoke with a dozen CEOs at the Open Source Think Tank conference who indicated that they would be adopting this license over the next year.

WaveMaker Case Study

WaveMaker is an open-source framework for visual AJAX web development. WaveMaker uses drag and drop assembly to create database-driven web applications. WaveMaker applications are pure Java WAR files based on standard open-source components, including Spring, Hibernate, JSON and Dojo.

WaveMaker Software has adopted a dual-license model: open source users are free to use the GPL license; while commercial users who want support can use the subscription-based license. This allows WaveMaker faces to build a vibrant open-source community while simultaneously establishing a viable commercial business.

The WaveMaker download is available here.

Summary

For new open-source companies who do not have an existing user community, there is a great deal of flexibility in setting up the licensing model. For these companies, a dual license model along the lines pioneered by companies like MySQL, JBoss and SleepyCat is emerging as the standard business model.

I take full responsibility for any bad ideas in this document, but I also want to acknowledge the contributions of the following people who helped me evolve my thinking: Larry Augustin, Brian Gentile of Jaspersoft, Clint Oram of SugarCRM, Neelan Choksi of SpringSource and Raven Zachary of the 451 Group

Labels: affero, gplv3, olliance, open source, WaveMaker

At the Open Source Think Tank conference in Napa, one of the CIO attendees described "transparency" as a major value open source providers give him. His sense was that open source vendors are on his "team," not adversaries.

Every CIO knows that the software they are acquiring has bugs. The question is: how closely will the vendor work with me to resolve the bugs I find?

For proprietary software vendors, the incentive is to hide or minimize those bugs and pin the blame on some other vendor's product. If I am an open source software vendor, I know you have access to my source, so it does me no good to hide my warts.

The net result is that CIOs see a greater alignment of interests when they work with open source vendors.

Labels: open source

I am attending the 451 Group Conference in Boston this week. Raven Zachary, the Open Source analyst for the 451 Group, led a session on the future of open source.

One issue Raven raised was the difficulty of scaling a successful open source project once it has become successful. The hallmark of a successful open source project is that the lead contributors hit the trade show circuit while big players like IBM cherry pick key project contributors to bolster their own offerings.

Raven gave the example of the Tomcat team, where a number of key contributors have been hired away, leaving the team roughly the same size it was 5 years ago, despite vastly higher usage and community needs. The solution would seem to be a model where the contributors could make enough money to keep working on the project as it becomes more successful (aka the JBoss model).

For long-term success, it may be that an open source project must be financially successful enough to cherry pick its own best contributors. Ruby on Rails may be the anti-example to this strategy, so it will be interesting to see how they handle their own success long term.

A related problem is that once an open source project is successful, its contributors can command significant consulting fees for doing work that others could do if the product had better documentation or usability. There is an odd negative incentive here, where making an open source product more user-friendly could cost the core contributors money. In the worst case, the incentive is to add cool but half-baked features so you have more stuff to talk about at conferences.

Some other interesting points from Raven's talk:

• Simplest definition: open source is community supported software that is freely available on the internet and which has minimal restrictions on redistribution. A more complete definition is here. Many popular open source products don't exactly fit this definition, so open source is at some level a business positioning as well as a development and distribution model.
• Support and services model is most accepted: customers are loathe to pay license fees to "upgrade" a supposedly free thing. I'm not so sure this is the whole story. I had a subsequent discussion with David Skok at the conference, and he felt the key to JBoss' success had been their ability to upsell management software to JBoss users on a subscription basis, taking their ASP from $10K to $50K.
• Vendor opportunity to reduce stack complexity: customers are struggling with how to manage 15 different open source vendors, each with its own licensing and support community. A related issue is how to handle integration issues between these products, an area being addressed by companies like Red Hat and SpikeSource. Our own WaveMaker product integrates over two dozen open source applications, so this trend is both real and accelerating.
  

Labels: jboss, open source, WaveMaker