Does first winner take all in open source?
I was talking with a venture capitalist the other day, and he was asking me about the possibility of both Pentaho and JasperSoft winning in the open source Business Intelligence market. "Is there room for two winners?" was his question.
My personal belief is that there's room for more than one winner in open source. Real markets aren't characterized by one seller. Real markets have competition. As open source matures, I expect to see various vendors duking it out for market share, much as Novell and Red Hat do today.
Dave Rosenberg believes otherwise.
In talking with Dave, and with this VC, it strikes me that maybe there's only room for one open source commodifier, but plenty of room for open source innovators. So, maybe only JasperSoft or Pentaho can succeed in commodifying the market out from beneath the feet of Cognos and Business Objects.
But there should be lots of room for both companies to bring Business Intelligence to the masses (as is, in fact, JasperSoft's tagline). Why? Because in lowering the bar to adoption of BI by SMBs and groups within enterprises that have never used it, there is, by definition, huge market elasticity. The market, in other words, is unformed and as big as these companies can make it. The company that Pentaho sells into will likely not have heard of JasperSoft, and vice versa. They will be competing to create the most greenfield opportunities.
Importantly, they'll likely be competing alone, because the incumbent vendors won't be able to hit their price point and ease of distribution.
This is the real opportunity for open source. Not in commodifying others' efforts, but in expanding markets to new customers. It's something that Microsoft has always done well, and which open source is well-positioned to do well, too.
So, yes, there is plenty of room for both Pentaho and JasperSoft. But only if they view themselves as innovators, rather than mere commodifiers.
4 comments:
I don't think that any one company can succeed in bringing commoditization to an industry; market pressure does that.
I certainly don't believe that "there can be only one" winner in a market, either. Generally, there are some top players, one of whom may have sustained advantage for a while, or an age, but over time, the one with the largest market share fluctuates.
And within an industry, there are also a larger group of innovative players poking at those top players.
I'm not sure that we should be looking at Pentaho and Jaspersoft as open source players vs. proprietary players, but as innovators vs. established and slower-moving players.
Let us also not forget SpagoBI [making good inroads in Europe], or ignore Openi or the Bee Project, all of which are open source BI suites.
And just to round out the story, there's players in the various BI/DW component spaces:
1. ETL: Talend, KETTLE [now part of Pentaho], KETL [seems to be languishing a bit], Jetstream [one of the first, but "finished" in 2003], Enhydra Octopus, and some smaller projects as well.
2. Reporting: openReports and openRPT come to mind; the original open source reporting tool is, of course, JasperReports, and jFreeReports is now part of Pentaho.
3. OLAP has PALO, not just Mondrian [now part of Pentaho].
4. Data mining has R, and RATTLE, as well as Weka [now part of Pentaho]
5. Dashboards are represented by MavelIT Dash, among others.
Rather than try to guess who might "win" as the only one possible open source vendor in a given space, let's look at how JasperSoft and Pentaho are developing
- as companies,
- their communities,
- their product development strategies
- their market share
They're very different companies.
Just look at PostgreSQL (think EnterpriseDB) and MySQL AB. There is always room for choice. The constumer/use needn't be restricted. With GPL, one would have to add, there's reciprocal improvement, so nobody is truly left behind.
Matt, you obviously know that there is always room for more. I used to be in the UNIX biz, and I know just a little about open source, but its still marketing. Its still about serving the particular needs of your niche. All of these players, by concentrating on the needs of their customer/market base, will be able to stake out a space for themselves. And they will keep that space for as long as they are responsive to their customers.
I think you take it all in the source.
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