Community: Needing to Be Needed

I just finished Charlotte Bronte's Jane Eyre, and have been reflecting on one of the closing dialogues between the protagonist, Jane Eyre, and her unlikely anti-hero, Mr. Rochester. (For those inclined to read the book - and you should (though you can largely skip 50% of the verbiage in the book - Bronte goes on and on and on with 2000-3000 words when 20-30 would do...a bit like me, I suppose :-) - you should skip this next section, as it gives everything away.

Jane Eyre, previously engaged to marry Rochester, had left him when she found out he was already married (to a lunatic wife that lived in his attic and occasionally set fire to people or stabbed them - Bronte obviously had an active imagination). After nearly a year's absence, she returns, only to find him blind (having lost his eyesight in a fire that his lunatic wife had started) and crippled. After some discussion, he asks her:

"...Jane, will you marry me?"

"Yes, sir."

"A poor blind man, whom you will have to lead about by the hand?"

"Yes, sir."

"A crippled man, twenty years older than you, whom you will have to wait on?"

"Yes, sir."

"Truly, Jane?"

"Most truly, sir." [At this point, Matt is blubbering in his airplane seat - I'm such a softie.]

"Oh! my darling! God bless you and reward you!"

"Mr. Rochester, if ever i did a good deed in my life - if ever I thought a good thought - if ever I prayed a sincere and blameless prayer - if ever I wished a righteous wish - I am rewarded now. To be your wife is, for me, to be as happy as I can be on earth."

"Because you delight in sacrifice."

"Sacrifice! What do I sacrifice? Famine for food, expectation for content. To be privileged to put my arms around what I value - to press my lips to what I love - to repose on what I trust: is that to make a sacrifice? If so, then certainly I delight in sacrifice."

"And to bear with my infirmities, Jane: to overlook my deficiencies."

"Which are none, sir, to me. I love you better now, when I can really be useful to you, than I did in your state of proud independence, when you disdained every part but that of the giver and protector." [My fellow Delta passengers are eyeing me suspiciously, wondering why a) a seemingly male personage is reading Jane Eyre and b) he is sniffling as he does so.]

"Hitherto I have hated to be helped - to be led: henceforth, I feel, I shall hate it no more. I did not like to put my hand into a hireling's, but it is pleasant to feel it circled by Jane's little fingers. I preferred utter loneliness to the constant attendance of servants; but Jane's soft ministry will be a perpetual joy. Jane suits me: do I suit her?"

"To the finest fibre of my nature, sir."

"The case being so, we have nothing in the world to wait for: we must be married instantly."

And so (nearly) concludes an excellent novel. And so, in turn, the novel reflects a great truth about people, generally, and open source software, specifically.

The best open source projects are those that invite and facilitate community. I've talked before about the right mechanics for facilitating communities, but one of the key ingredients - perhaps the key ingredient, is a sense of community within a project. People must feel that they belong. As with the TV show Cheers, "You want to be where everybody knows your name."

Lest this be passed off as a trite or easy-to-accomplish task, let me give some examples of how open source companies (including mine) routinely get this wrong.

1. Coding in private. It is a natural human tendency to want to keep our work private until we feel it suitably presentable to share. At Alfresco, we've fallen into this error several times. In one case, we were working on an integration with SugarCRM. Customers and partners kept asking for integration between the two, and we kept promising "We're working on it, and will be releasing it soon." But what they really wanted was both visibility into the project - they wanted to be able to go to our forge, or Sugar's, and see the work in progress - as well as the ability to participate in the project. We ultimately rectified this and posted the ongoing work, but we should have opened it up from the start. Perhaps, had we done so even before we started coding, a partner or customer would have taken up the project on their own, allowing us to spend our development resources elsewhere.
   
   Open source companies shouldn't behave like this. Our strength is in permeability. Roadmaps, pricing, code, etc. should be open, so that they can be forked or augmented in the best directions. Yes, there will undoubtedly be times when we develop initial betas of features/technology/products outside the public eye for competitive reasons, but generally, the inclination should be toward openness.
   
   
2. Investment in a community engenders devotion to that community. This seems intuitively wrong. One would think that those organizations which require least of us are those we'll prize most, but the inverse is actually true. Not to wax religious, but if you look at the fastest growing religions in the world, they're generally those that demand the most time, resources, etc. of their members. John F. Kennedy is famous for telling the American people not to ask what the country can do for them, but what they can do for the country. Parenthood is the same: it's absolutely insane that I have four children, since I'm one of the most selfish people on the planet when it comes to my time. The more they demand of me, however, the more I appreciate them. The principle seems clear: we want to give to those things that need us (or that we believe need us - my daughter, Greta, seems to do just fine without me :-).
   
   Now, in software, I'm not suggesting that CIOs will drop boatloads of cash on projects that are "needy." Not at all. Rather, I'm saying that there will be more psychological connection to software that allows us, even encourages us, to give to it. I can much more easily walk away from a failed financial investment than I can an investment of my time, reputation, and interest. Norm was never going to go to a different bar, not with how much Sam, Woody, Cliff, and the rest needed him.
   
   
3. Open source communities, then, will be strongest when they actively court new entrants. Related to #1 above, it's easy to structure a "community" as a gated community that allows only the privileged few (usually a company's employees and partners). This is no community at all.
   
   To encourage community, code needs to be modular (to make it easier to contribute in small doses - most third-party open source development is what I call "drive-by development"), forums need to be open and well-maintained (SugarCRM, which does commercial community better than anyone else I've seen, made its best investment in Clint, one of its founders, who actively works with its community to make it a welcoming place, and to ensure questions are answered), documentation needs to be solid (to make it easier to grok the code and get started), and it must quickly become community-maintained, if company-led (If the vast majority of the most active members remain the company's development team after the first 6-12 months, you're doing something wrong).
   
   
4. The company must be willing to relinquish (some) control. Related to the above, at some point the company must be willing to be forked. On its own forums. Otherwise, it doesn't feel like a community of equals, and no one likes to be subservient. I'm not arguing that a company should invite forking of its code, but rather that without a willingness to see this happen, it likely holds too strong a grip on its community, which will stifle interest in the community. Jane says it well when she alludes to her preference to be a full partner in the marriage (now that she's needed), rather than a doted on, half-servant to her husband. Strong communities take the risk of being forked (as Mambo/Joomla was in my ECM world). This is a good thing. Painful. But good.

Reading back on this, I may have taken Jane Eyre too far, but the core principle is true: one of the greatest "lock-ins" an open source company can hope to achieve is the emotional satisfaction a customer or partner has when it becomes a valued member of that project's community. Investing in the code one licenses makes for committed, happy customers. Community matters.

I'm a LinkedIn freerider

Given all my pejorative blather about open source freeriders, I figured I'd fess up to one of my many sins.

I freeride on LinkedIn.

Through LinkedIn I found my director of solutions engineering - one of the best people I've ever worked with. I'm hiring a sales engineer, technical support, and 1-2 other positions now, and I'm doing it through personal, offline connections and through LinkedIn. I tend to use LinkedIn as a talent database, and rarely use it to actually link with someone. If I know a person's company, I can figure out their email address. No need for LinkedIn to help me connect.

As an attempt at penance for freeriding, however, I thought I'd offer LinkedIn a suggestion:

Charge for honest references.

The one thing that I can't get offline, but probably could get through LinkedIn, is candid commentary on people that I'd like to hire. I've thought about this before, but LinkedIn is perfectly suited for this.

It already allows me to leave endorsements for others, but what I'd really like to do is privately leave an honest appraisal of people I know. I don't want to flame them (though I'm sure this would happen within the system), but rather be able to speak openly about my experience with someone. More to the point, I'd like to see anonymous (or public, if the person leaving the comments prefers) commentary on someone I'm thinking of hiring. As mentioned, this could be abused, and I'd hate to see someone abused through the system. But I suspect that such a "rating" or commentary system would work over time, just as eBay and other systems get more accurate as more people vote on sellers, buyers, etc.

Again, I'm not interested in paying for the ability to email someone. I can do that for free. But I would dearly like to get an honest appraisal of the people I'm thinking of hiring through the LinkedIn network. Offline, you get references from someone and they're usually so incapable of saying anything negative about the prospect that it's nearly useless to talk with them. I'd rather hear the good and the bad, and make a decision accordingly.

Open source success: A question of 'trust'

In a former life, I did a Masters degree in International Conflict Analysis (a fancy way to say "International Relations"). As part of my thesis ("The End of American Empire," a discussion of the source of the United States' ideological hegemony and reasons for its imminent collapse), I read Francis Fukuyama's Trust. Basically, Fukuyama argues that high-trust societies (Germany, Japan, United States) tend to be more productive and economically prosperous than low-trust societies (Italy, France, Korea). Trust matters, and translates into cash.

Whether Fukuyama's theory matches up with the real-world economies or not, I do think it applies well to software. Jason Matusow of Microsoft once related an interesting survey that he/Microsoft had conducted. (This is public information - he related it at a conference in Toronto.) 60% of the surveyed customers felt that access to source code was very important. Of these, 95% said they would never look at the source code, and 98% said they would never modify it. So why did they care?

Trust. Or lack thereof. Not lack of trust that Microsoft had their best interests at heart (I actually think Microsoft generally does have its customers' best interests at heart, but goes about securing them in the wrong way), but just a desire to have a safety net under their relationship with the vendor.

One of the great things about open source is that it heightens product permeability - you can see what you're getting before you come to the decision point: buy or don't buy. As in a strong-trust society, the barriers to enter into contracts, associations, etc. are diminished. IT decisions are based on maximum information (perhaps too much information at times?), not marketing messages and sales guys with good hair. That's why I like this slide we use at Alfresco:

No, trust isn't unique to open source companies, and an open source company is just as capable of acting in ways harmful to trust as a proprietary software company is. But the foundation is more amenable to trust. And, if Fukuyama is right, this means that over time, trust-based software economies (open source) will trump the closed software economies.

Building revenue models in open source

At the risk of raising Larry's ire again, as the end of Alfresco's quarter draws to a close (giving me a little more time to think), I wanted to write down some additional thoughts on revenue models in open source. So, in no particular order, here are some important things to consider when building your open source revenue model:

1. Price matters. This seems obvious, but if you have an exceptional product (as an increasing number of open source companies do), there's a strong temptation to position your pricing just below, at parity, or even a little above (if you believe Microsoft) the proprietary competition. Don't. Part of the drive toward open source is price. It's not the most important part by a long stretch, but it is important. By the same token, be careful not to price your product too low. Alfresco has actually lost customer interest in a few cases (and I'm aware of other open source companies who have experienced the same thing) because the price was too low. You want to be in the same ballpark, but markedly less.
   
   
2. Open source is never 100% pull. By "pull" I'm referring to Larry Augustin's excellent discussion on this topic. I agree wholeheartedly with Larry that open source can create an inexpensive mechanism to enable pull: you create a great product, prospective customers download it, they evaluate it, they call you to buy. But this last part depends, to a large extent, on what kind of product they're downloading, and how easy it is to install, configure, and evaluate. A CRM system is, arguably, easier to evaluate than EAI or ECM or ERP. In short, some products are relatively self-evident, while other products are not.
   
   So, when do you start to push the pull? At Alfresco we get involved with companies evaluating our products early into the pull cycle - this has worked well for us. We're able to help would-be customers understand how to derive maximum value from the system, assist them with configuration, etc.
   
   As a result, however, we don't get as much of the automated sales cycle that some other open source companies do. As a tradeoff, however, we do tend to get larger deal sizes than the industry average (just as Medsphere does, an open source medical information systems company). We're still fine-tuning how we interact with open source's natural pull mechanism, but I'm generally quite pleased with the results. Open source shouldn't be about push, but it's never completely about pull, either. Not if you're looking to grow a serious company.
   
   
3. Document everything. Related to #2 above, one way to facilitate the pull phenomenon is to heavily, clearly document your product. This tends to be the last thing that open source projects think about, but it's the first thing you should do. It will dramatically lower your cost of sales, because it will mean far less "pushing the pull." This is something that I've learned the hard way - don't follow my lead on this. Document first, then worry about selling.
   
   
4. Revenues now. Every good corporation as revenue and profit as its two primary goals. I like the way Jack and Suzy Welch recently put it in their BusinessWeek column ("The Whining Game"):

   You are running a company, not a social club or a counseling service. Your No. 1 priority is to win in the marketplace so that you can continue to grow and provide opportunities for your people. Of course, you want your employees to be happy. But their happiness must stem from the company's success, not from their every need being met. When the company does well because of their performance, they will thrive, personally and professionally. Not the other way around.

   Money matters. It matters now, not two years from now.
   
   Of course, as Larry wisely suggests, you don't want to ramrod sales conversions from downloads - if you try, you'll fail in the short term (would-be customers will walk away) and the long term (you'll find yourself more sales-focused than product-focused, and will lose your price and product advantages). But you need to be thinking about how to convert downloads into dollars every second of every day - it should be second only to creating an exceptional product (and directly correlated with how you'll serve/support customers).
   
   Red Hat isn't the company it is today because it made a lot of friends gifting great technology to the world (and people happily paid for the brand), as Bob Young once implied. Red Hat became the most successful open source company on the planet (ranking #2 on Business 2.0's 100 Fastest Growing Tech Companies list) out of dire necessity: it went public on hype and bubble-esque thinking, and then had to hunker down to justify its (then) bloated valuation. In the process it quickly discovered that the we-give-things-away-and-people-pay-us-for-our-brand model simply didn't work (sorry, Bob). It had to find some way to push all that pull, and came up with an ingenious business model.
   
   (Incidentally, on that note, it's strange to me that very few open source companies have followed Red Hat's business/revenue model. There are at least two reasons for this, I suspect: 1) It's hard to fully let go and believe that customers will buy a tested, certified (that third-party apps will work with it), supported product. But they do. (Alfresco recently made the move to 100% open source and it has been an unqualified success for us.) 2) The model has been hard to understand, because there are some legal nuances to it that aren't immediately self-evident. But once you grok it, it's a thing of beauty. These are just two reasons - I'm sure there are others (including potentially better business models). But I think Red Hat's success is directly tied to its model - something worth studying.)
   
   
5. Be open and permeable. By this I don't mean your source code. I mean the company itself. Put your pricing, business model, product information, forums, etc. online. Accessible to all. Including competitors (especially them, actually - it will strike holy fear into them when they see customers leaving them in droves with the ability to see exactly why their customers are deserting them, and not being able to do anything about it). You want to lower the bar to doing business with you. No one should have to wonder about your pricing or anything else. John Powell, Alfresco's CEO, often laughs when we sign mutual NDAs - "Matt, be sure to keep secret what you learn about the other company. They already know everything there is to know about us." That's the way an open source company should be: open.

That's all for now. Of course, there are various other questions to be answered (Per-user or per-CPU/server pricing? Banded pricing or unit pricing? etc.). But many of these are only answerable in the context of your product/business.

Enjoy!

Web 2.0 nonsense and the mob justice

I stopped by Bryce's house on a walk with my youngest yesterday, only to find out that the world was crucifying one of the advisors to his venture fund (Tim O'Reilly) who, as near as I can tell, is both innocent and also stranded on vacation without a cell phone, unable to defend himself from the libel/slander/mindnumbing ignorance that is spewing his way in his absence.

Missed the uproar?

Nick Carr captures it well. You may not remember this, but there was a time when everyone and her dog didn't blather on about Web 2.0. Then Tim crowned it real, a business partner sought trademark on the term (remember: back then few talked about Web 2.0 - it was Tim who got the meme rolling, which Paul Kedrosky, not being a lawyer or a historian, seems to have forgotten), and lately his business partner (CMP Media/MediaLive!) on the O'Reilly Web 2.0 Conference sought to enjoin an Irish company from putting on its own Web 2.0 conference.

Rudimentary trademark law 101, you think? Mostly.

In this ruckus, those who are personally attacking Tim can be ignored - they're buffoons.

For the rest, I think the real problem is not that Tim's business partner is seeking to enforce a trademark, but rather that it has not sought to do so before now. I think, in other words, that the real problem here is that O'Reilly (the company, not Tim, the person) has been inconsistent. Had O'Reilly aggressively slapped at TM on every use of Web 2.0, no one would be complaining now. But they didn't. Because O'Reilly isn't that sort of company. Now they're being castigated for not being IP fiends (though the mob is dressing it up as if they are IP fiends).

It is clear (to me, at least) that Tim largely invented Web 2.0. Not that he coined the term first (though he may have), but that he was the first to really centralize discussion around the topic. I think it's therefore still reasonable for his company and its partners to want to hold some exclusive right to put on a conference that deals with the meme.

At some point, however, it will have to become open. Like open source. I co-founded the Open Source Business Conference. It never occurred to me to try to trademark "open source," though we definitely trademarked "open source business conference." Open source is simply too generic. It may well be that "Web 2.0" is now too generic to hold claim to legitimate trademark.

If so, it is through the good graces of Tim and company. People should remember that before they grease up the guillotine.

Open sourcing Java creates an incompatibility risk?

Thus spake Simon Phipps, in this eWeek article. Perhaps I'm being naive, but I think the answer is relatively simple: GPL it. Not one of those newfangled modern corporate-created licenses. The stubborn old GPL.

Yes, from the GPL you still get various flavors of Linux. Ubuntu. Red Hat. Gentoo. Etc.

But the differences between these are more in the assembly of packages than anything else - they're much more similar than they are different.

So, GPL it, Sun. Set Java free.

Bob Young is Lulu

John Heilemann has a great profile of Red Hat founder Bob Young and his publishing startup, Lulu, in June 2006's edition of Business 2.0. Bob and I spoke at an open source conference together 2-3 years ago in Toronto, and I remember my reaction when he told me about Lulu. It was, as best I can remember:

"Huh? He left Red Hat for this?"

Today Lulu is doing $1M each month, and it's clear that his open source publishing business has got legs (36,000 - 91,000 book sales/legs per month, to be exact). The whole user-generated content hoopla largely leaves me unmoved, but there's something to Bob's idea.

"We're trying to empower this exchange of content between creators and consumers, so we think of ourselves more like being the eBay of digital content.

A big aspiration, but Bob has never thought small.

There's something to it. I'm with Nick Carr on most things - "expert" content is probably best handled by experts. But in the world of fiction, I'm not sure I trust the editors and publishers to find the best literature. At least, not always. Yes, they've given me Mark Twain, Flannery O'Connor, and Fyodor Dostoevsky, but they've also given me (well, you - I refuse to read him) Dan Brown and those Fabio "novels."

I'm sure Lulu will churn out its share of Dan Brown-esque rubbish, but if it can find even one Dreiser or Trollope for me, it's worth it. (And what genius to not actually print the book until someone pays. I might even put together a collection of blog posts and essays, or perhaps my Masters thesis - I'm not out anything if no one cares, and maybe I'll make a few dollars....)

Why Mozilla is still not enterprise-sanctioned

If you live in the 21st century, you stopped using Internet Explorer some time ago. It's ugly, invites unwanted malware, and has been behind the innovation curve for years.

All of which makes it the more frustrating that corporate IT generally shackles users to the ugly old IE beast, as CNET notes. The article quotes Mitchell Baker, head of Mozilla, who gives two reasons for corporate IT's silly adherence to an outdated technology:

While many IT directors do allow the open-source browser to be used on company time, those who don't are often held back by the proprietary technologies employed on their intranets.

"Enterprises have intranets that only work with (Microsoft's) IE," Baker said. "We can't fix their intranet."

Another hurdle Firefox must overcome is the "heartbreakingly slow" process many enterprises go through to certify the use of a tool as critical as a Web browser, according to Baker.

It's this need to comply with proprietary technology--as well as general quality issues--which, Baker claims, keeps IT departments from going with client-side open-source applications, not merely the fact they're open source.

I remember this poignantly from my Novell days - we used Concur for expense reporting. Even when the company went to Linux desktops, we still had to use Crossover Office for IE support, because Concur only supports Internet Explorer. When a knuckleheaded decision by an ISV (to only support IE) forces a company to spend wads of cash on otherwise unnecessary products (either buy Crossover or maintain a Windows desktop, as I did, solely to do expense reports), that knuckleheaded ISV should ceremoniously tossed out of the enterprise.

Off my soapbox.

Note: A great friend of mine, Bryce Roberts, who sent this to me, still uses a VCR. Kind of ironic....

News: Nokia open sources its browser (Mostly yawn)

So, Nokia is open sourcing its mobile browser. I might think this bigger news if I had ever used a Nokia phone in my mortal existence, but I haven't, and I can't find any information on the browser to make me think it's a big deal. (Besides, I'd much rather use Mozilla's Minimo browser, if they ever support a real mobile operating system.)

The real trick is not in the browser, anyway. It's in the HTML/code that goes into mobile websites. It's nice to have a browser, but useless (or nearly so) if the websites it's rendering are written for the fat web. (dotMobi is a step in the right direction, but it, too, does nothing more than register mobilized websites - it doesn't actually write them. People do. The best solution I've seen to the mobile Internet is a company called Volantis.)

Anyway, here's what Nokia has to say for itself:

Nokia designed the browser for its S60 line of phones using the same open-source frameworks used by Apple Computer for its Safari browser, and adding enhancements designed to improve mobile browsing. Mobile phone makers or operators can now access the engine that runs the Nokia-developed browser and customize it for their own needs.

"We want to reduce the fragmentation currently in place in mobile browsing," said Lee Epting, vice president of Forum Nokia, Nokia’s software development support program. [ASAY: By further fragmenting the mobile browser market? How polite. :-) ]....

Features of the browser include the capability to work well in low-memory situations, a mouse pointer for a similar navigation experience as on the desktop, and support for dynamic HTML and Ajax. Developers will be able to create their own user interface for the browser, a key way for them to differentiate their products, Epting said.

OK. So there are some cool things about this. First off, they're licensing it under the BSD, so they're completely relinquishing control (though not the fragmentation/forking that may well occur).

Second, I like the Ajax support. I'm not a Web 2.0 worshipper (far from it), but I do think mobile is one place where Ajax makes a huge amount of sense, because mobile is a world where people are not (yet) married to fat-client apps. Ajax on mobile could actually be useful, whereas on the fat web it's mostly just eye candy.

The Mysterious "Danruss"

I had a funny "customer win" last week that reminded me (and the new customer) that signing on with an open source company can be much more than a passive relationship....

Let me explain.

The customer was looking to cluster Alfresco in a way that we don't currently support. "We," meaning Alfresco. But they told me that "Danruss" was working on the code solution to the problem, and would have it by July.

"Danruss?" I queried. "Who the heck is Danruss? We don't have anyone by that name working for us."

"He's all over your forums," they replied. "He told us he's backlogged right now, but will be issuing a beta by July 1."

I couldn't figure out what (or, rather, whom) they were talking about. But then it hit me:

Russ Danner.

Russ is with The Christian Science Monitor, and has proven to me once and for all that open source enables a highly interactive, dramatically innovative way of developing software. No, Russ doesn't work at or for Alfresco. He works for The Christian Science Monitor. But he definitely works with Alfresco, and in a way that proprietary software has never been able to replicate.

So, Russ, you won't be getting a paycheck from us, but you will be getting (and giving) exceptional software. Thanks to you. To Alfresco. To all of us. That's the power of open source.

Strong competitors = great opportunity

Jose Mourinho is quoted today about how pleased he is that the best striker on this planet - Thierry Henry - turned down two record offers of nearly $90M from Barcelona and Real Madrid to stay with Arsenal. Why would the coach of the world's most competitive team (in the transfer market, anyway) be happy that Arsenal will be stronger next year?

Because competition is good.

Who cares if Chelsea wins if they have no competition? Indeed, Mourinho has bemoaned this fact lately - no one takes him seriously as a coach since he has billions to spend on buying up every good player on the planet.

It's the same in the open source world. First, it's becoming a bit distressing to me that the proprietary players have come up with such anemic rationales for why IT buyers should choose them. Innovation? Open source has that in spades. Or how about this one from Microsoft, arguing that open source is not reliable or dependable? I think Redmond has failed to notice the mass exodus away from its rainy shores for stable, reliable, dependable open source in the form of Linux, MySQL, Apache, etc. etc. etc.

In short, I hope the proprietary vendors learn to put up a real fight. Right now, they're looking pathetic.

Of equal importance to me is that open source breeds an increasing number of quality projects. We need more, not fewer, Alfrescos, SugarCRMs, MySQLs, etc. Too often we think that because one has been funded or grown in popularity, that it's time to move on. The proprietary world doesn't think that way - why should the open world fall into this trap? Where would Oracle be without DB2? And Sybase, Ingres, etc.?

Competition is good. Lots of competition is better. Even for you, Jose "Big Bucks" Mourinho.



P.S. My picks for the World Cup are England or France. Fabrizio's Italy is a minor roadbump on the way to victory.... :-)

News: Enomalism hits beta

First off, let it be known that Enomaly is one of the most interesting open source SIs on the planet. Reuven and his team have hacked Alfresco, Zimbra, Plone, Typo3, and virtually every piece of open source software ever conceived. Now they're tying them all together in cool ways.

In the latest salvo from its open source arsenal, Enomaly just released Enomalism, a pre-packaged virtualization infrastructure solution based on Xen 3.0 and available under the LGPL open source license. The Enomalism Virtualized Management Console (VMC) is a web-based systems administrator management tool for XEN hypervisor that enables the management of multiple isolated Virtual Private Servers (VPS) to be managed from a central web based interface.

So what, you say? Well, Enomalism offers the performance, stability, security and openness of the Xen hypervisor while simultaneously making it super easy to use, deploy, and manage. So, enterprises will tend to get higher server utilization and lower costs without having to be uber-geeks to do so. Nice.

Check out the download here.

The Future of Lock-in

If I seem dismissive about ODF and Microsoft Office generally, it's because I am. Over the past 2-3 years I've watched Microsoft build a new, growing bastion of lock-in.

The battle is no longer being fought at the file level. It's being fought at the network level.

The network of files, that is, within an organization. People in the open source world make a fetish out of defeating .doc, .xls, and .ppt with .odf. Fine. But in Microsoft's new world, even ODF documents would be locked into its network. Of which network am I speaking?

SharePoint.

I first encountered SharePoint at Novell, where Microsoft was using it to nudge Linux out of organizations. See, SharePoint is insidious. The basic version of it (Services) comes free with every Windows 2003 server. It costs departments nothing to deploy it. Given a taste (it's a decent, though not great product), a significant number upgrade to SharePoint Portal, start storing their content in this SharePoint repository, and kiss their freedom goodbye.

This is the same for any proprietary content repository. Documentum, Vignette, etc. have been locking in customers for years with their respective repositories. But Microsoft is more dangerous, because SharePoint is integrated with Office, Windows, SQL Server, and every other Microsoft product. Once you get a taste for SharePoint you have to keep buying more and more Microsoft product to leverage it, and the more content you store in the repository, the less likely you will ever get it out.

You're locked in.

This is one reason that companies should be extremely wary about using SharePoint, in particular. It is your content, not Microsoft's. If you want to keep it yours, you need to keep it in a secure but open place.

There are a range of great open source repositories out there (Alfresco (Truth in advertising - I work for Alfresco), Apache's Jackrabbit, Plone, etc.). This is where you want your content stored, because each of these offers easy ways to get the content in and, more importantly, out.

So, yes, I am a bit blase about file formats. That is yesterday's battle - an important one, but an old one. Today's battle is being fought in the network of files. You may not realize it now - though companies like Novell are already waging a fierce battle on this front - but you will. Get your data/content out now.

Not ashamed to say it: open source costs less

I've been having a discussion with a group of friends on the advisability of calling out the fact that open source is cheaper. With other benefits (Flexibility. Open standards. Performance. Quality of code. Etc.) arguably trumping cost, I decided to ask the only person that matters in the debate:

A customer.

This particular (Alfresco) customer vetted various proprietary ECM solutions before going with Alfresco. The price for Alfresco's top competitor in the deal was 20 times Alfresco's. 20 times. They eventually discounted it so that it was only 10 times more expensive. We sold them a similar system for under $30K (one that actually performs better, is easier to use, and won't lock the customer's data into Alfresco).

You do the math.

Now, if I'm a CIO, I'd better have a darn good reason for not choosing Alfresco in this scenario. (And if I'm that other vendor, I'd better be buying indulgences or something to assuage my guilt for over-charging so much for a relatively simple ECM requirement.) Is open source primarily about lower cost? Absolutely not. But should buyers care about cost? Of course they should. And they do.

Price may not be a long-term competitive barrier, but it sure is an excellent short-term opportunity for open source. Use it.

The downside of choice

I figure I might as well maintain my status as Resident Inquisitor of Open Source Myths with a discussion on the value of choice. A friend at a Fortune 500 company recently set me to thinking on the problems (and opportunities) that open source affords vis-a-vis choice. (I've opined on open source choice before, in case you're interested.)

I'm very fond of telling enterprises that open source maximizes their choice. I often use one of Larry's graphics to illustrate how much better off they are:


Look at all that choice the CIO now has! She can spend her money in a variety of different ways.

Oddly enough, that can be a problem. In many ways, it's easier to be forced into a decision: if I only have $10 to spend, in some ways I'm glad to have $9.95 in Arsenal tickets staring at me. My choice is made. No need to worry about spending $2 to send condolences to the Barca fans. :-)

However, there's a much more difficult angle on choice for CIOs: how to figure out what to choose in the first place. My friend tells me that it can be hugely time consuming to download and try out open source software. Vendors like MySQL and Alfresco take it as a matter of course that our would-be buyers will first download, test, and evaluate our software, and then opt to buy it. However, what if they go through all that effort only to find out the product is rubbish? Lots of man hours on the road less traveled...and it will have made all the (negative) difference.

Oddly enough, in the commercial world, the buyer gets the product largely "site-unseen" and then has the pleasure of beating up the vendor to get them to make it work. They paid big money for it, so they're a) not going to recognize the sunk cost and move on and b) have given the vendor a strong incentive to fix the problems or face a battering in the word-of-mouth press.

For many, they would prefer to throw down the cash and pray it works. For others, they'd prefer to invest their time/money in experimenting toward a good fit (though, let's face it, the process for winnowing down a universe of products/projects to a small group for a bake-off is the same - IT buyers are always going to talk to peers, read what the media has to say, etc., as I've noted before).

Over time, I think it will become increasingly easy to find good open source software. So, some of the "cost of choice" will be removed for my friend. But for now, there are real costs associated with choosing open source. Worthwhile costs, yes. But costs, nonetheless.

Sun moving toward open source Java

eWeek has a good overview of Sun's announcements this week (Operating System Distributor's License, for example).

One announcement that it didn't make? That it's open sourcing Java. My friend Dave Rosenberg gave a great line in this regard (must have taken him days to think of it): "I applaud Sun's philosophy to open-source all of its software, but the community is asking for Java. Until Sun open-sources Java, their open-source credibility flag will still fly at half-mast."

However, the company did say that it's "not a question of whether it will open source Java, but how." I can answer that: "Very soon, with minimal restrictions." You're welcome.

The World Wants ODF!!! (Not)

Jason Matusow (former shared source king at Microsoft, now shared standards king at Microsoft) has a good post today about customer demand for ODF. Tim Bray and others have hounded Microsoft to open up and support ODF.

Jason's response? We're customer-driven, and few customers care about ODF. He provides a little data to support this:

To try to put some kind of weight behind my statement about the demand, the following data comes from the March timeframe, and falls into the world of blog data (meaning it would be great to see some neutral party do this type of research so that it could be verified and substantiated). I received this from a friend of mine who did some Google research. He found that of the non HTM or HTML files on the internet, ~70% are .pdf, Office formats represent ~17%, .txt ~7%, StarOffice (including swx, sxi, sxc) about .03%, and OpenOffice not registering with only ~1000 documents surfacing (including .odt, .ods, .odp). This data comes from a total set of ~446 million documents. So - I'm not completely in dream land Tim, just not in alignment with your company's goals on ODF and the sale of your products and services.

Whatever your open source politics, I think it's fair to say that Jason is right on this one. We can argue that the world would appreciate open document standards if they were just given them (i.e., people are too ignorant to know what would be good for them). But I think it's a specious argument to say that hordes of people are clamoring for ODF today.

They're not.

I, as a vendor who manages Microsoft Office content, would be very happy to see ODF succeed, because it would make my job easier. But I'm not sure that's a good reason to hound Microsoft to give up its competitive advantage, no matter how much I might prefer that they do so.

Besides, the kinds of content that increasingly matter in today's world make .doc increasingly irrelevant. Email. HTML. PDF. I care about these. Microsoft Office formats are increasingly 'furniture' for me. My most important data aren't there. So why fixate on yesterday's battleground?

Larry Augustin on 'Natural Revenue Growth'

Yes, that does sound like a line from half the spam I get, but in this case it's actually an astute observation from Larry Augustin, the source of the email on which I commented late last week.

Larry raises some great points, both in his initial "rant" (his word, not mine) and in the follow up. I definitely concur, for example, that sometimes (in any business) VC money causes the startup to do things that natural, organic growth would never countenance.

I'm not a big fan of huge piles of VC cash, because I think they skew the right business mentality for long-term success: impatient for profit, patient for growth (in Clayton Christensen's words). In other words, entrepreneurs must have every incentive to operate sensibly today with a prudent growth plan that doesn't trade near-term profit for long-term inanity.

However, I disagree with Larry's implication that all open source startups are alike. I think a middleware company is different from an applications company, and that bigger ticket items will have a different (however slight) sales model than a business that thrives on smaller transactions. Not all startups are alike.

It's too soon to settle on any one model. I suspect that it will always be too soon for such. This is one reason that we need continued, open dialogue like this: to help figure out what is the best for vendors and, more importantly, what is the best for customers.

Along that path, Stephen, don't worry about "picking on Matt." Having truth on my side always makes me feel amply armed. ;-)

InfoWorld: "How I work" series

Over at the InfoWorld Open Sources blog, Dave and I are profiling how various open sourcerors work. (If you're interested in participating, just ping one of us with your answers to the questions below.) So far we have Mike Olson (Sleepycat, Oracle), Brian Aker (MySQL), Dave, and me. We just started, but I'm enjoying reading them. Here's mine:

What is your role? Vice President of Business Development at Alfresco, an open source Enterprise Content Management company. I'm responsible for US sales, partnerships, marketing, legal, and just about everything else. We're a startup. So everyone is responsible for everything. :-)

What is your computer setup? PowerBook G4 (PPC, not Intel). I converted to the Mac in my first year at Novell, when a Mac-freak boss nudged me to do so (when my ThinkPad was backordered). It took two weeks to get comfortable with it, and now I'd never consider going back.

Since I work from home (as I have for 6+ years), I use Comcast broadband with a Netgear wireless router (I won't use anything but Netgear). I have a wireless D-Link printer gateway for my HP 6MP (need to upgrade this soon, but the HP just keeps going and going and going - it's fantastic). I also use an Epson scanner as my fax machine (in conjunction with eFax). On this last point, I'd prefer to use a real fax machine, but I can't remember what a normal phone line looks like anymore. :-)

What desktop software applications do you use daily? Entourage (for email - it's the Mac equivalent of Outlook. Oh, and I use the excellent SpamSieve to make sure I read real email, and not spam), Google/Safari web browser (Use Camino for my SugarCRM, as it's sometimes flaky in Safari), iChat and Skype for IM, NetNewsWire (RSS), and Microsoft Office (PowerPoint and Word most often).

What websites do you visit every day? Google, primarily. Delta.com, Marriott.com, and Hertz.com for travel (which I do far too much). Zions.com, Chase.com, and AmericanExpress.com for finance (expense reports for all that travel). I also spend time on my three blog sites and my SugarCRM application. Lastly, I go to SoccerTV.net to see what I could be doing besides work. I'm sometimes tempted.

As you can see, I don't really use site/service aggregators (like Orbitz for travel): I prefer to go directly to the source of the service and pick up my information/service from it. However, for news I use NetNewsWire to aggregate my RSS feeds (1/3 of which are Arsenal related....

What mobile device or cell phone do you use? Treo 650. It's just about perfect for what I need (Email in a pinch, though not as a primary email device).

Do you use IM? More than I use a phone or email. I love IM. It's the best way to get hold of me. I have it on my Treo, in addition to my laptop, and use it as the fastest path to getting an update from someone. I use AIM primarily, but Alfresco uses Skype internally, and that is becoming a close second.

Do you use a VoIP phone? I do. Vonage. I also have an IPEVO Skype phone which I use more and more. I do keep a POTS line, but use it maybe once/day.

Do you have a personal organization theory? Not sure what this means, but I'm hyper-organized. I've always been anal retentive, and almost never let an email go unanswered on the day I receive it. I use a task list and my email inbox to tell me what I should be working on.

Since coming to Alfresco, I have sales responsibilities which means that any customer, at any time, that hits my voice mail or email inbox has immediate priority over everything else. In work, I prioritize as follows: Customer, Partner, Alfresco. I've gone for several days without answering calls from fellow Alfrescans, but I won't go more than two rings for a customer.

Beyond work, family is my top priority, though I'm sometimes not very good at behaving this way. Of late I've been getting better, and a field trip or soccer game will take precedence, unless simply not possible or deleterious to Alfresco, over my Alfresco work.

Anything else? I think it's important to read a lot, and to read great literature, and not waste time in front of the TV (or computer - I have problems with this last one). I travel constantly, which affords me a convenient time to read. I'm into Thomas Hardy, Charles Dickens, and other great English writers at present. I'll probably go back to Dostoevsky, Tolstoy, and these Russian writers next. I did my BA in English, so it's easy for me to care about books. But I get my best ideas from reading things completely unrelated to open source, software, and technology. I've yet to have any meaningful insight into my life after reading anything off the New York Times business best seller list (except Clayton Christensen's The Innovator's Dilemma).

SugarCRM's virtuous cycle

Ever since Alfresco went 100% open source, friends from the open source community have been calling. One of these, John Roberts, talked with me by phone today.

John said one thing, in particular, that really struck me. SugarCRM's model, in case you don't know, is to offer tiered versions of its product: Professional and Enterprise being commercially-licensed (open source without redistribution rights). John mentioned the fact that even the most ardent open sourcers among Sugar's development/user community recognize the value of these tiers - some of whom started negative on the model, but have since become converts.

Why? Because Professional and Enterprise pay for development of the core SugarCRM system (and many of these features migrate down into the Community product, anyway). Community users "pay" through using the system (and finding and reporting bugs), and extending it in cool ways. It's a self-reinforcing ecosystem. There are no parasites in the SugarCRM world - just customers that pay value in different currencies.

This is a mature, sophisticated understanding of open source. It's one that is sometimes difficult to accept (as 1-2 of my recent blog entries evince - hey! I'm trying to make quota ;-), but in the long run, it's right.

Next question: When is Alfresco going to upgrade from Professional to Enterprise? I've been asking for this for weeks. Guess it's time to take matters into my own hands: John (Roberts), please switch on Enterprise in our hosted deployment. You can send the bill to our office in Maidenhead. SugarCRM is awesome.

Wise words against my views on open source sales and marketing

I received an email back from a good friend about my recent post on open source sales and marketing. He strongly disagrees with my view. I'm going to include some of his comments here, because I think they reveal the depth of his experience and accumulated wisdom. They also point to an optimal way to start an open source company.

He suggested some ways to build an open source business:

1. Fire everyone in sales.
   
   (Asay: This is difficult for a company like Alfresco, as we don't actually have anyone in sales besides an inside sales person, and he's kicking tail. I'd never consider firing someone who paid for himself in the first month on the job.)
   
   
2. Set revenue expectations for the next 12 months to zero.
   
   (Asay: I think this is very wise counsel, but it's hard for any venture-backed open source company to actually do. I don't know any VCs that are patient enough to wait the 5-10 years for a JBoss, Red Hat, or MySQL to develop. I speak from some experience, having tried to raise money to build a business around Apache Cocoon. There have been a few VCs who had the foresight to invest early in these projects, but few to none that did so before there was serious community traction. My friend is essentially suggesting that the community should come before VC cash, and this is excellent counsel. It's just not practical for most would-be startups.)
   
   
3. Sales for the next 12 months should be handled only by the CEO and VP business development, and should be limited by their bandwidth to handle incoming inquiries.
   
   (Asay: Again, excellent counsel, and almost precisely what we're doing today. Back to his comment....)
   
   Steps 1-3 are designed to make sure you are focused on building the product that the market wants and will come to you for, and not about pushing software. (It's about pull!) The limited bandwidth of the CEO and VP Business development to handle sales inquiries will cause you to focus only on the highest likelihood accounts. i.e those you can close quickly.
   
   (Asay: Great advice. The difficulty for Alfresco has been that we have quickly been pulled into large, Fortune 500 accounts. It's a good problem, but I readily admit that it can be a problem. Larger deals require customer handholding. No one pays $100K without talking to someone, no matter how good the software is (and ours is exeptionally good). Ask MySQL, Red Hat, etc. if their experiences have been different. They haven't.)
   
   
4. For the next 12 months focus solely on building a product that is downloaded for free and that is installed and actively used. Your goal during this period is to drive up the installed base of active, useful internal installations of the product. It is NOT to close revenue and sign up customers. REVENUE IS THE WRONG METRIC TO TRACK DURING THIS INITIAL PERIOD. Tracking revenue too soon will cause you to push software sales too early, and you won't develop the pull model that will give you huge leverage 12 to 24 months out.
   
   (Asay: Good counsel, but see #2 and #3 above. It's hard to set revenue expectations to zero when customers want to pay for it today. Alfresco isn't alone in this. Mule, the leading open source ESB/EAI platform, is being used in big installations today, as is Xen (XenSource). I think it would be hard to tell Peter Levine (XenSource) and the Mule people to turn that cash down. :-)

My friend had other comments, but these are enough. Excellent counsel. They don't apply in all cases, but they're generally true. If you can afford to spend a year working for free, or know a VC that will fund you to take that time, you will do well with the counsel above. I believe, however, that SugarCRM has illustrated that a commercial open source community is possible, and can start first with venture money and an excellent product and drive near-term revenues.

Open source is a marathon, not a sprint, but I think it's a marathon that can be run at a brisk pace.

Alfresco + SugarCRM = SWEET!

A new project - reasonably far along - just popped up on the SugarForge: Alfresco/SugarCRM integration. I've been looking forward to this for some time: the best of open source CRM combined with the best of open source ECM.

We have a few mutual partners working on the project now. I'd highly recommend you take a look, and hopefully get involved.

The open source sales cycle

I was ordering Mother's Day flowers tonight to the tune of Ozzy Osbourne's "Waiting for Darkness." (Don't ask.) I haven't heard it for years, and I started to smirk at the lyrics. Like most song lyrics, they're lame.

Playing with fire
But they're screaming
When they're burned
Out of the sunlight
Hasn't anybody learned

Before the smirk set in, the head was banging. Great music. In my more lucid moments, I smirk. The rest of the time, I just enjoy.

The myths around open source are much the same. I've heard them so often that I rarely take time to critically evaluate what is being said. Heck, I'm as often as not the one regurgitating them. Open source developers and vendors mime the words, singing along to the catchy tune, because it serves their interests. Anything that smacks of a contrarian opinion is hounded out of the room.

The more time I spend with IT buyers, however, the more I realize they just want objective information. They like open source, in part, because they don't need a sales guy to tell them why a product is great - they can immediately download it and see its strengths and weaknesses for themselves. This doesn't necessarily lead to quick sales, however, as I note below. Open source, as I've said before, is a marathon and not a sprint. A download might take months to germinate into a sale - or it might wither on the vine.

This fact, incidentally, calls into question one of the great myths about open source business. The rhyme goes something like this: "Open source drives down sales and marketing costs, because customers download the product, love it, and then gladly throw money at the author of the code. They just set up an online cashier to collect the mountains of cash."

The only problem with this line is that nearly everything in it is untrue.

in my experience, it is true that open source has lower sales and marketing costs. But not forever. At some point, as Red Hat continues to hire direct field salespeople, it will be as bloated as IBM, Novell, or Microsoft in its sales force. But it was much cheaper to start, when cheap matters most.

Where my experience diverges from the myth is in the trial-to-buy process. I think it is absolutely true of small deals: SugarCRM has, in addition to the larger deals it does (and it's doing an increasing, healthy number of these), a fantastic base of small deals that make up a very broad, healthy revenue base. Not "clumpy" at all. Alfresco has those, but we also sell a lot of big deals, more akin to ActiveGrid and SourceLabs' revenues than MySQL's traditional revenues (though MySQL is seeing bigger and bigger deals in the past year).

Guess what? No one pays $50-100K over the web. They almost never pay without meeting you. In other words, these big deals always cost more money to close, open source or proprietary.

One other hitch in the story is the idea that permeability of source code makes for quick sales. Sometimes, sure. But just as often it either turns off the buyer ("This product stinks!") or slows them down, as they get to see all the warts upfront. If I'm buying Siebel, I really don't get to see it until I've signed the check. All the warts become horribly apparent at that point, but not really until then. Until then, I'm trusting an untrustworthy sales guy to tell me the truth. What choice do I have? :-)

In open source, then, the trial/pilot cycle is almost definitionally longer than in the proprietary world. (I must hasten to say, however, that open source dramatically shortcuts other aspects of the trial process, like actually getting one's hand on code in the first place.) It's all for the better, in my view, because when a buyer does sign up, they know exactly what they're getting and are able to look past the problem areas. They're able to quantify the risk and make an intelligent decision. A better decision. But it's not necessarily a quick decision.

So, if you're getting into open source and your deal size is expected to be north of, say, $15,000, you need to learn patience in the sales cycle. A download doesn't mean immediate intent to buy. And even when it does, the intent will generally be well out in front of the action to do so.

I frankly am still experimenting with the best way to qualify interest post-download, and would love to hear others' experience on the matter.

Less money, more source?

Bernard Golden has an interesting post at CIO.com today. I don't agree with a few of his points, but I think it's a well-reasoned argument. Here's a snippet:

“Will software be a business that generates a lot of profit in the future? Is open source essentially a disruption that will cause the software business to be less profitable? ”

-- Steve Ballmer, addressing an audience of financial analysts, July, 2004

Let me end the suspense, Steve, and offer the answer: "Yes." The software business will be less profitable in the future -- much less profitable.

The enterprise software business is changing dramatically and tomorrow's industry will look very different to today's. The converging impacts of slowing growth, competitive pressures, and more demanding customers will cause a splintering of today's monolithic industry offerings -- and in a surprising turn of events, the software industry of the future will look much more like the open source software industry of today. But what will that mean for you, the software user?

Read the article to see the silver lining. :-)

The downside of open source (business)

A friend from a large enterprise (buy side of open source) sent me an email today. I had asked for his opinion on how to improve the Open Source Business Conference, a show I and a few friends founded a few years back. He said something in the course of his email that I found very interesting, if difficult to deliver:

[You need to show] [h]ow to decide which OpenSource product is really cool and does what it says on the tin and which is vapourware\aspirational.

What Open Source products have my competitors used? Successfully. And unsuccessfully....

I like the panels - especially when they disagree. One of the things I find a bit discomfiting at conferences is when all the shiny, happy people on a panel agree...

... the core thing that I try and get through to my senior, senior management is the understanding that Open Source is NOT a panacea; is not totally free; and can sometimes be complete [junk]. I think that representing that as a truth would gain a lot of credibility among IT professionals.

In short? He wants to see the reality of open source, and not the shimmering, sparkly side that we vendors constantly trumpet (myself definitely included).

So, what's the biggest downside to open source (for vendors)? Its inefficiency at converting usage into revenues.

For many of you (especially those on the development side), this is a hollow whine. After all, many of you primarily are concerned with seeing your product used and people benefiting from it. Fair enough.

For those responsible for turning your work into your salary, however, and by this I mean the greedy, narrow-minded pointy-haired boss salespeople (like me :-), "use" is not always as happy a thing as one would suppose. It is brutally difficult to see, as I did today, for example, a Fortune 500 company eagerly, happily using your software.

And not paying you a dime, franc, or ruble. Nada.

Get enough of these customers, and you neither have a business nor a means to fund the development of more code.

Ask Red Hat now if they are fine with Google using their distribution without paying for more than one copy (as the folklore goes - which folklore I believe was true as of a few years ago, though it might have changed since), and I'm sure they'd say, "Of course! It's a testament to the code we certify/test/etc. that such a great company would use ours as a starting point."

When I sat in a room in 2002 and heard that question asked of a senior Red Hat executive, however, he grimaced and didn't respond.

The difference? Red Hat today can afford "leakage," and, funny enough, gets less of it now that its brand commands respect which commands cash. Red Hat back then could scarcely afford salaries (unprofitable as it was), much less leakage.

Lest you take this wrong, let me state clearly: I believe in open source software. I believe great businesses have been built with it and will continue to be so (my own, included, I hope).

But it is not for the faint of heart. You have to be prepared to watch would-be customers, big and small, derive immense value from your software without paying you. Value that they'd gladly pay for in a proprietary world. Value that they would have to pay for.

Why do they freeload? Not because they're evil, but because they can. Their business is making money while spending as little as they can. Who can fault them for using free software whenever they can?

And, if you're honest with yourself, you'll recognize that you probably use a lot of free software, too. In Alfresco's case, we richly benefit from Lucene, the Spring Framework, and various other open source components. All software that we didn't have to write, and for which we don't pay anyone.

How do you prevent leakage and make open source more "sales-efficient" in the short-term? I've discovered a few means, and would love to hear yours, as well:

1. "Proprietary" Incentive. You must have a hook that convinces would-be customers to buy, and not merely use. Free downloads invite use, but only some proprietary (pardon the word) hook effectively closes sales. For MySQL (which, I believe, derives a massive percentage of its revenues from OEM/embedded sales), this means that it offers a clean way out of the GPL. For SugarCRM, it's the additional functionality that is commercially licensed. For Red Hat (and Alfresco now, too), it's the testing, packaging, third-party application certification, etc. that only comes with the Enterprise product.
   
   If you lack a hook, you may well get many users, but it will be extraordinarily difficult to beg and cajole users into becoming buyers. You don't want that fight. You want an appreciable difference between your "community" product and your "professional" product, whether that difference is in functionality, stability, or whatever.
   
   
2. Source of Code. You must have control over the code. I don't mean copyright here, but rather developers. Source of code rather than source code. Customers buy from those that write the software.
   
   
3. Partner Alignment. You must have your partners aligned with your vision. Systems integrators and others who make their money on professional services - in the proprietary and open worlds - always have an incentive to drive the cost of software to zero to make their services more appealing/less expensive. This is normal and natural. It's not, however, good for the creators of the software. Software startups don't need a huge swath of partners - they need a few hyper-committed partners with expertise and the shared vision of driving software sales (as well as their professional services engagements). The two need not be mutually exclusive. Despite #2 above, having partners support your free product erodes your ability to charge for it.
   
   
4. References. Customers talk to each other. They want to know who is paying for what. Convince one financial institution to pay and odds are that others will follow. This is not new advice - it's very much what Geoffrey Moore has been teaching for years. But it's critical in a different way in open source: you don't just want marquee buyers using your product - you want them buying your product. There's a huge difference between the two.

There are more, of course. I don't claim to have all the answers. Open source as a business is a work in progress, one that I'm very happy in which to play a part. I'd love to hear your insight.

Luddites of the world...unite!

I'm experiencing a sharp case of deja vu. Years ago, while at Lineo (embedded Linux vendor), our proprietary competitors (Microsoft, Wind River, etc.) started competing with us based on FUD about open source. Today, the embedded world would laugh off such quaint perspectives on the "dangers" of open source.

Apparently, the applications world still has a few dinosaurs, with Luddite competitors. (Keep in mind that the Luddites didn't hate technology - they just hated the technology that was putting them out of business.)

Yesterday I spent some time with a pharmaceutical company. They're looking at Alfresco as a way to manage the FDA (US Food and Drug Administration) drug approval process, as well as general corporate documents. They love Alfresco's modern architecture, low price point, ease of use, and better performance.

But the proprietary vendors heard we were being considered, and started to swarm.

"Legal risks!!!!"

Ignores the fact that we own as much or more of our code than these companies own theirs. Also, the very openness of the code contributes to its security and safety, rather than the inverse. With Proprietary Company X, I have no clue as to what's inside the black box. With an open source application, I know everything about the product.

"No pharma reference customers!"

Not true - we have one of the largest in the world - and hilarious in light of the fact that we (or, rather, the founder of Alfresco, John Newton, who also founded Documentum) basically wrote the book (Crossing the Chasm on using early adopter reference customers to cross the chasm into mainstream use.)

"How can it possibly be so cheap compared to our bloated prices???"

To this last one, the only response can be, "We don't waste money in the way you do, and we don't pillage our customers in the way you do." Open source means I don't have to spend $5-10 on Sales and Marketing for every $1 on R&D (like most proprietary companies) to obscure the fact that their products stink.

At any rate, it was one of those confirming moments for me that open source applications are well on their way. I know my friends at SugarCRM, JasperSoft, etc. have similar stories they can tell. The proprietary world still doesn't know how to respond to the open source threat.

But here's a hint: open up.

Exchange, but without all the junk that comes with it (like Microsoft :-)

So, I've been following a cool startup called AppTran for nearly a year now, but a few months ago the company (which had been in stealth mode) dropped completely off the map. The premise behind the company? An Exchange server that runs on Linux, runs better than Exchange, and looks/feels like Exchange (without Microsoft, Exchange administration headaches, etc.). It's what EnterpriseDB is to Oracle databases: a drop-in replacement at a fraction of the cost (and administration nightmares).

So, it was a very pleasant surprise when Duncan Greatwood, the CEO (and someone I knew back in my Lineo days), pinged me to announce that, in fact, AppTran is not dead. It's just been busy. It's got a new name (PostPath, but the same game plan: give companies all that's great about Exchange without all the hassle that comes with it.

Keep in mind that most enterprises can't use Exchange alternatives because existing alternatives are not drop-in compatible. To achieve drop-in compatibility, an email server alternative must have network protocol compatibility (like Samba has for Windows file and print).

Everyone assumed that this was impossible for Exchange - but PostPath has done it and made it work. Let's just say that there must have been one heck of a lot of packet-sniffing going on in the PostPath labs (a bit like glue-sniffing, but with better effects).

This is the sort of compatibility that Alfresco has achieved with Windows CIFS (file system) - which even Microsoft SharePoint lacks (same company, different planet) - I can tell you from our experience: this is not a feat for the weak of heart and it's a huge barrier to entry, because there's no easy way to achieve this kind of compatibility. It's a ton of work.

How compatible is PostPath with Exchange? It's real:

1. Full Outlook functionality with no plug-ins;
   
2. Use Active Directory tools to manage and migrate users;
   
3. Compatible with ecosystem apps like Blackberry/Sharepoint;
   
4. Server-to-server compatibility so new systems co-exist with the old.

In short, it's cool. It's useful. I'd buy it.

To the best of my knowledge, no one has ever done this before - those that appear to do so use client-side plug-ins, which don't solve the compatibility-lock problem for enterprises with a lot of Microsoft desktops and infrastructure.

Beyond simple cloning of existing Exchange technology (which is cool in and of itself for those who don't want to be forced to live in a Microsoft universe, even if they choose to do so), PostPath offers some cool, innovative features. Like the fact that it stores data in the file system, uses open systems for backup restore, archiving, redundancy and replication. Oh, and it's 5x as fast as Exchange. (Translation: More email in less time - maybe this isn't a good thing.... :-)

For something this cool, you should pay big money, right? Yes, you should, but being the generous souls that they are, PostPath allows enterprises to divide "hard" costs associated with Exchange by 4. (I was an English major, but I think that means it's 75% cheaper than Exchange. :-)

Other cool features? LIke Zimbra, it has a nice AJAX web-client (also included for non-Outlook uses). I haven't seen the client yet, and I suspect it will be hard to match Zimbra's web client, but the real value in PostPath isn't in the web client. It's in the server. Perhaps Zimbra + PostPath partnership would be a match made in heaven?

At any rate, this is one of the coolest companies to emerge from the Valley for some time. Not because it's sexy to look at, but because it takes a very big pain-point (Exchange costs, from administration to license to support) and solves it at a huge performance, support, stability, and cost savings boost. What's not to love?

Off-topic: What matters most

A good friend of mine just had a terrible tragedy in his family. Suddenly, his life has been turned upside down - life was stable on Friday, and destroyed on Saturday.

At times like these, I'm more grateful than ever for my faith. I'm also mindful of how little software (indeed, just about everything) matters compared to family. I hope we'll spend a little less time this week on work, and a little bit more with our families (whatever shape or size they may be). You lose your job or miss a quarter, and life goes on (perhaps painfully for a time, but it does go on). You lose a child, spouse, or parent, and life comes to a debilitating halt, and limps along for some time thereafter.

Invest in those areas that pay the biggest returns. For me, that's Jen, Scout, Isaac, Greta, and Lily. I've still got to hit my quota at Alfresco - no question. But based on my friend's experience, I'm going to be much more careful about how I do it. John Powell, my CEO, can't chase me down for my quota when I die; contrarily, my faith is such that I'm sure little Greta will be hounding me for eons to come. :-)

Best to keep on her good side.

Service for survival, service for success

I just listened to my voice mail. Two messages from Orbitz. I've never used Orbitz before - I generally buy direct from Delta or whatever airline I'm flying. Now I know what I've been missing.

The messages? The first was to tell me that my flight was on time. The second? To tell me it had been delayed 15 minutes. Valuable information. Useful information.

Information that I've never received from Delta, despite flying 100K miles with the company for most of the last 8 years.

All of which has me thinking. Orbitz may have to innovate in customer services like this because it doesn't own the planes, employ the pilots, etc. It has no product beyond an easy way to book flights and an easy way to ensure people make their flights.

In like manner, perhaps one of open source's greatest assets is a liberation of code by any one entity. That is, perhaps Linux works so well because Red Hat and Novell don't own Linux, and so must scrap it out in the service/support world. (No, I'm not a fool - I know that the way both companies package their support arguably makes neither look like a support contract.) JBoss owns its code, but has basically eliminated its ability to directly profit from it. And so there's just support and services left. Not a great business model for a vendor, but it's a great model for a buyer to tap into.

I had lunch today with a health care provider that manages government healthcare recipients (i.e., Medicaid, in this case). Their benefit? More efficiently managing costs associated with providing Medicaid. The poor - the primary recipients of Medicaid - benefit because they get better care. The governments benefit because they save money. And this company benefits because it makes a decent profit. But the only way it does so is by offering superior service: it doesn't employ the doctors or nurses. It doesn't own the hospitals or other facilities. The only thing it has is service, and service does well for it.

I'm enough of a capitalist pig to still believe it's important to maintain some element of control - some hook that provides strong incentive for a customer to pay, over and beyond a feel-good desire to be charitable. But I really like, for example, how my company, Alfresco, went 100% open source, thereby removing our proprietary safety net and forcing us to be even more service-oriented. It has made our marketing/sales message that much cleaner and clearer: buy from us because we're best able to support the code, and not because we're best able to write licenses to force you to do so.

Not to worry: Gates will keep Google honest

The fox is in the henhouse, but not to worry: according to this ZDnet story, Bill Gates has proclaimed:

"We will keep [Google] honest, in the sense of being able to do better in a number of areas."

I'm glad Gates qualified honesty in that way, because Microsoft doesn't have the best track record of honesty in the more traditional sense of the word (you know, telling the truth and playing fairly). :-)

That said (and tongue out of cheek), I dearly hope that Microsoft will do just what Gates suggests: Google needs competition.

[Gates] also gave credit to his rival, saying Google has "done a great job on search and what they've done with advertising." But, he reiterated his position that search today is still too much of a treasure hunt and promised that better things are in store.

Absolutely agree. And I'd go one further: Google's innovation has stalled. Outside search and a killer business model, Google has given the market little.

In this, it has given us much. But for a company with its money and ambition, I hold it to a higher standard. "Much" isn't good enough. Nearly every product beyond search has failed (though I must admit I love Google on my Treo - it's excellent, including the texting functionality and mobile web search). Even where Google could make lots of money, and a truly useful product (like genealogy, Google has been MIA.

So, yes, Mr. Gates, I'm actually rooting for you on this one. By all means, keep Google honest. We'll rely on the Justice Department to do the same for you.

Never been a better time

I'm on the phone with a company that is soon to open source the core of their technology, technology that touches most of us every day. I continue to be amazed at how pervasive open source has become, and is becoming. If you're a proprietary software (or hardware) vendor trying to compete in the 21st Century, you're going to lose. Period. The momentum is too strong, and the rationale behind open source too strong.

This particular company interests me so much because it's taking open source in a completely new direction. Just as Jonathan Schwartz's move to open source Sun's hardware design/reference implementation for one of its new chips is revolutionary (wait 5 years - all chips will be that way), so is this company's. And as Sun, this company, Alfresco, SugarCRM, Red Hat, etc. etc. open source more and more core, compelling technology, it's staggering to think of the immense value of software which will be open and freely available.

So much to do, and so much to do it with. There has never been a better time to be in technology.

Open Solaris at Linux's expense?

There's an article in Information Week today suggesting that Sun's Solaris 10 may be a Linux killer, or, rather, that it will help Linux stop killing it. I'm not sure I buy that.

Why? Well, I spent the day on Wall Street, and talked with several financial institutions, which have historically been big Solaris shops. While I did hear from one that Sun's open sourcing of Solaris had given pause to the "dump Solaris" campaign there, the rest all said the move to Linux is aggressive and unstoppable. At this point, one said, Solaris is "legacy" and no amount of source code is going to change that perception.

Perception is reality. Perception: Solaris is old, in Wall Street's minds. Ergo, bye buy, Solaris.

This jibes well with an eWeek article suggesting that Red Hat's expansion on Wall Street is only accelerating. (It also explains why my friend at Large Financial Institution X was meeting with the Red Hat executive team right after his meeting with me, despite his suggestion that Solaris was slowing his company's move to Linux. :-)

Am I suggesting that IT buyers can be as trendy as consumers? Of course. After all, they're the same people, just at different times of the day. I saw this at Novell, where NetWare continues to be a great product, but one that lost (long ago) its sex appeal. Ergo, continued declines in NetWare market share.

At this point, I think Sun needs to expand its business to new products, and not hope to resuscitate Solaris revenues, just as Novell needs new products, not new names for old products. Once a brand is tarnished ("legacy," "non-standard") as somehow unpopular, its shelf-life will be short. So move on.

Self-congratulatory news: Alfresco goes 100% open source

For those who didn't see this elsewhere...

Alfresco Enterprise Edition Goes 100% Open Source; Alfresco Removes Closed Source Risk for Governments and Major Corporations

LONDON--(BUSINESS WIRE)--May 1, 2006--Alfresco Software Inc., the first provider of an open source enterprise content management solution, today announced that 100 percent of the Alfresco Enterprise Edition will be open source. Governments and non-profits turn to open source, in large part, to ensure their investments in technology are protected for long-term viability. The rapid success of Alfresco in becoming the open source enterprise content management system of choice has enabled the company to communicate with governments and corporations at a high-level on open source strategies. Now Alfresco meets their needs by making the source code of all product functionality freely available.

Across the board, from governments to major corporations and not-for-profits, organizations are updating their purchasing models to get the benefit of open source. The major drivers are cost and the use of an open architecture and standards. Major organizations such as these do not want to purchase extra functionality from "advanced editions" and then lose the flexibility to change strategy in the future and switch back to an unsupported open source model.

The model leading commercial open source companies are using is to offer the same functionality across all product lines. This gives the customer the option of purchasing, not extra functionality, but support, consulting, integration and training. This approach enables the customer to get the benefit of open source in the short-term--low-risk trial with easy access to source code, product details and roadmap--and also in the long-term by having the flexibility to stay with enterprise support or move to a community model with no loss of functionality and no code change requirements.

Alfresco offers two functionally similar product lines - Enterprise and Community. The Alfresco Enterprise Network offers:

-- Certified Stacks

-- Maintenance, Updates and Patch Support

-- Customer Support - Problem Resolution, Compatibility and Migration Advice

-- Customer Portal - Information, Bug Tracking and Case Tracking

-- Performance Tuning Advice

-- Indemnity and Warranty

"Alfresco has been downloaded more than 200,000 times and is used, for example, by leading governments, military departments, telecommunications companies, banks and not-for-profit organizations," said John Powell, CEO Alfresco. "Governments and major corporations see open source as a long-term strategy. Our approach gives the customer the benefit and flexibility for both the short and long-term."

About Alfresco Software Inc.

Alfresco is the leading open source alternative for enterprise content management. It is the first company to bring the power of open source to the enterprise content management market, enabling unprecedented scale and a much lower total cost of ownership than proprietary systems. Founded by a team of content management veterans that includes the co-founder of Documentum, John Newton and former COO of Business Objects, John Powell. Alfresco is based in London. For more information, visit www.alfresco.com.

Sipping rather than gulping down your IT

Over the past few months with Alfresco, I've met with dozens of enterprises to talk about open source content management. Yesterday, one of these companies said something very interesting:

"For us, open source lowers the bar to ROI."

"ROI," of course, means return on investment. The higher the investment, the bigger the return must be. Open source turns the traditional software ROI equation on its head: instead of imposing a huge upfront cost on an enterprise, open source allows the enterprise to ingest smaller increments of software. Sips, rather than gulps. As in the real world of food, "don't wolf down your IT" is an appropriate, accurate metaphor for healthy IT buying.

Not only is it better because open source won't break the bank, but open source is better because enterprises tend not to have enterprise-wide IT requirements that they can easily gulp down all at once. I'm not saying enterprises don't have enterprise-wide problems that IT can fix. They do. I'm arguing, rather, that trying to fix them all at once tends not to work well. Besides, IT needs tend to grow organically, one department/person at a time. Much better, than, to invest in IT that more easily scales in this way.

In my world, you can't get into one of the big proprietary vendors for less than six-figures. Yet most IT problems can be fixed with a much smaller dose of CRM, ECM, etc.

In talking with a large financial institution today, they remarked on their general experience with big IT investments: most never get implemented, or get incompletely implemented. Two years into the failed project, the champion of that project leaves the company to take a job elsewhere, and the project dies. Or, in the ECM space, you pay Documentum/FileNet/etc. $1M for your system, another $3-4M for consultants to make it work and set up workflow, and 6 months after your business processes change and no one can afford to re-invest in the consultants to make the system work again. So the system falls into disuse, and that ROI is -$4-5M. What a waste. Serious indigestion.

Don't believe this happens in the real world? It happens all the time. One company I've worked with has spent nearly $1M on a system that they haven't been able to get working, despite two years and countless dollars on consultants. They're not alone.

That is sheer insanity - how could a vendor feel good about foisting that sort of "investment" on a customer? And why would a customer buy from a vendor that forces such a mammoth, upfront "investment?"

I couldn't, and I wouldn't. Instead, look to open source as the technology and business answer to proprietary indigestion. Open source is based on service and support - vendors get paid when they do a good job, and you drop-kick them when they don't. You're only out the support costs you've been paying (which tend to be much lower than the support/maintenance costs you pay on your proprietary systems, and that's after you've already wasted truckloads of money on the upfront license costs. Open source gives you choice. It returns control of IT to the CIO. (Tastes better, too. :-)

Open source quickly becoming old hat

I had lunch with a company's IT staff yesterday, and asked them, "Which open source projects/products do you use?" They listed off several projects (Tomcat, etc.), but I had to prompt for the most obvious one: "And Linux? I assume you're running Linux?"

"Linux? Oh, of course, I guess we had forgotten that's open source."

This was a hugely telling remark. For this company (and, frankly, for most of the industry), "open source" is short-hand for many things, and sometimes connotes a cutting-edge, not fully baked product. This is accurate in some respects, and wholly inaccurate in others (no one could sanely call Apache, MySQL, etc. "not fully baked").

In this company's mind, Linux is just there. It works, requires no special justification, etc. It just is.

Give JBoss and MySQL a year or two, and they'll be the same. Along with hordes of other open source projects.

For those of you who, like I, have been involved in open source for a few years, it's been entertaining and enlightening to watch the progression of open source into the enterprise. I watched Cobalt (Linux-based) microservers take off back in 1998, when people didn't care about the Linux inside, just the low price outside. At Lineo, we spent most of our time convincing customers that Linux was a viable option for their embedded devices and that the GPL was safe (now Linux is everywhere in embedded). At Novell it was a struggle to convince the company that open source could breed viable business models. Now there isn't a software vendor on the planet that isn't at least toe-dipping in open source.

For those new to the open source party, if my lunch yesterday is any indication, the "party" is nearing an end. That is, the special hoopla that surrounds open source is nearly over. We're quickly reaching the point where open source "just is" for databases, application servers, content management systems, CRM systems, etc. Soon it will be ERP and the other, last bastions of proprietary. Open source will permeate every corner of IT.

Just give it another (very) few years.

One man's trash...

...is another man's trash. Thus spake Nick Carr, in this highly entertaining blog post. Nick's concern? Read between the lines:

User-generated content is great stuff. Why? Because it's generated by users. And as we all know, users are natively gifted at producing great content. Users would have been generating great content for the last few millennia if they only had the right software tools. But they didn't, so they had to be content with just being users. Which was a monumental drag of historic proportions. Think of how much nicer the Sistine Chapel's ceiling would have turned out if only some users had been involved.

I love reading Nick's stuff, and mostly because he's right. I think the only thing he doesn't grasp (at least, in this post) is that for many people (perhaps all of us, in given situations or at different times) actually do prefer rubbish to quality.

Look around at the books you see people reading. The Davinci Code occupies half the seats on any given flight, and it's a complete waste of time. What happened to Dostoevsky, Moliere, Richard Wright, Flannery O'Connor, and others who actually knew how to write? You read those in college, if you're lucky, and then most forget about them. (Yes, I am a bit of a snob on this one - reading Dante's Divine Comedy right now. :-)

More to the point, I think people like to read what others like them are writing, thinking, etc. I love Arsenal (no surprise), and I love to read blog posts from other Arsenal fans as much or more than the sports commentators who make the big bucks to tell me Thierry Henry is incredible. I'd actually prefer to hear that from Arsenal-Mania or another "Proletariat" blog like that. Grittier, in some way. Real.

No, I don't want to read user-generated Harry Potter, or Steinbeck, or see a user-generated feature film. But it does have its place.

In the open source world, the dirty little secret is that the vast majority of user-generated code (using Nick's connotation for the term) is trash. It's empty space on SourceForge. The great code out there is generated by great coders like Miguel de Icaza, Linus Torvalds, etc. These are not random "users" generating content - they are the Steinbecks of software.

Perhaps, if anything, open source offers a way for us to get to know them through their code, in a way that isn't possible in traditional software (where companies own the copyrights and keep coders mostly anonymous). But it's not about long tails, user-generated content, etc. Not principally, anyway.

Meanwhile, Tim highlights how to bring the Web 2.0/user-generated content world to the lay person: make it easy (so they can make more trash :-). If only open source offered a way to bring in the lay "developer." I think we'd have more consumer open source applications if someone could figure out how to involve the code commoners (like me).