My 15 seconds of nosey fame with Romney

Mitt Romney's son, Josh, is a neighbor and a friend (he came to the Morrissey concert with Jen and me), and last night Jen and I watched the US presidential debate over at Josh's house. I have some "stress zits" from end-of-quarter worry, so I avoided talking with the reporters there, but the crew still caught me "scratching" my nose here.

My 15 seconds of fame!

Microsoft's trip to another planet

I look at Microsoft's quarterly numbers, and the company seems to be doing well. Its two monopolies are firmly intact, and it's well on the way to building a third and fourth in Exchange and Sharepoint. Of course, there are a range of reasons to believe Microsoft is limping toward stagnation, that it's losing its fervor, but I think it has plenty of years left in it.

All of which makes it hard to believe Bill Hilf's recent comments in the Asian press. In case you thought that Microsoft was winning in the war against open source, you just need to read Bill HIlf's quotes to see that Microsoft clearly feels that it's losing. Or is in trouble. Big time. You don't go as negative on Apple as Gates has unless you're worried that you're losing. You don't bash open source as being...just like Microsoft unless you're worried that it is racing ahead.

Bill, looking for the soundbite that he got, says:

The Free Software movement is dead. Linux doesn't exist in 2007. Even Linus has got a job today. [Bill is trying to] be descriptive and intelligent in giving people an understanding of open source and debunk a lot of the mythology around open source.

I'm glad that Bill clarified this, because it sure sounded like he was trying to repeat his company's FUD from circa 2003. I know and like Bill quite a bit. He's much smarter than this. hope that this is the company line he's parroting, and not his real opinions.

What Bill is trying to say, of course, is that the world of open source has changed. It's not (if it ever was) about free love. Rather, it's about code and cash.
For Bill to go out on the stump and make the kinds of statements he makes in this press interview, I'm guessing that Microsoft fears commercial open source much more than it ever feared community open source.

Community open source is scary on one level because Microsoft can't effectively market (read: lie) against it. It just keeps going. Microsoft also can't sue it (or threaten to do so in the hope that some bedraggled knucklehead will play dupe for you).

Microsoft used to think it could compete with commercial open source more effectively than community open source because it looked more like Microsoft. Same general goal(make money by serving customers).

As it turns out, open source proves to be a more efficient means to that end, which must make Microsoft terribly nervous. After all, if companies actually start delivering service to customers, rather than simply software, what will happen to Microsoft's monopolies that deliver little incremental value to anyone but Microsoft?

Hence, Bill tries to confuse the issue:

He said that most customers run a distribution - RedHat, Novell, Suse or Mandriva. Most of the work on maintaining the Linux kernel is done by developers working for these distributions, he noted,

"They are full-time employees, with 401K stock options. Some work for IBM or Oracle. What does that mean? It means that Linux doesn't exist any more in 2007. There is no free software movement. If someone says Linux is about Love, Peace and Harmony, I would tell them to do their research. There is no free software movement any more. There is big commercial [firms] like IBM and there is small commercial [firms] like Ubuntu," he said.

Somehow, someone at Microsoft got into its collective head that "commercial" = "inimical to open source." It's unfortunate that this should be false, because so many Microsofties delude themselves with this fiction, but I'm afraid it is. It's also unfortunate that Bill would pretend that paying someone money would somehow dampen their enthusiasm for the ethos of open source. He apparently has never talked with open source developers at Red Hat, Novell, IBM, MySQL, etc.

Or Microsoft, for that matter. Perhaps Bill didn't get the memo that his own company is desperately trying to be more like open source in the way it develops software. Funny thing, truth. It's not always on your side....

Speaking from my own experience, the list of companies who buy into open source precisely because it's open source is long and getting longer by the day. Open source is not an afterthought to their purchasing decision - it is the crux of that decision.

Of course Bill knows this. Which makes this public posturing the contrary all the more disingenuous and unworthy of Bill.

Bill, and Microsoft, are evidently struggling with how to play nicely. Again, this is surprising to me since I think the company is, generally speaking, on the top of its products game. What seems to be causing the company so much angst is not product-based competition but rather business model competition, In that department, it is clearly going to be a loser (as will Oracle, SAP, etc.) if open source continues to take off. If customers come to expect service for their dollars instead of shelfware, every proprietary software vendor loses.

Microsoft, for its part, has long done a good job of driving "service" into the software, making complex software easy to use. This is why Microsoft continues to gain at Oracle's and IBM's expense in databases, applications, etc.

But it has not yet gained at open source's expense. Reading between the lines of Bill's statements, I'm guessing the company isn't too happy about that. In response, the best I can offer is,

Get over it.

100% of the Global 2000 is running Linux. Hordes are flocking to open source middleware, databases, and applications. Microsoft can either profit from this, or it can continue to try to fight it.

Not that fighting it will do much at this point. It's like gravity. It hurts to fall.

Innovating with Linux and JBoss

Red Hat just announced the winners of its Innovation Awards, and the results show that Linux has a very bright future in the enterprise. I was fortunate to be one of the judges, and was/am impressed by the variety of interesting uses to which companies are putting Linux and JBoss application server.

One of my favorites (and that of the other judges, apparently, as it won the "Innovation in Government" award) is Hill Airforce Base. HFB is here in Utah, and gave a very candid assessment of both the problems it was having with Windows/Oracle and the solution that Red Hat Enterprise Linux delivered:

Hill AFB needed a cheaper, faster, more reliable system that would greatly reduce or eliminate system crashes, simplify a complicated operating environment and have minimal user disruption. The new system needed to add enhanced capacity for an increasing number of applications and users. Being a part of the U.S. Dept. of Defense meant that Hill needed a system that could guarantee security and reliability. Hill’s IT specialists were also looking for a data center solution that would be transparent to the end user community and allow for business continuity....

When choosing a vendor for the new system, the IT managers at Hill AFB considered both Windows 64-bit and Linux. Frustrated with their current Windows environment [NOTE: Hill AFB’s existing system went down eight times in three months. With about 18,000 users on base, many of whom are doing highly sensitive and deadline-driven work, it can cost up to $1 million per hour when Hill’s systems are down], it became clear to the IT architects that Linux was the preferred solution. Because of security concerns, Hill needed to run security-enhanced Linux that was common-criteria certified. Red Hat’s Enterprise Linux stood out as the only Linux that was able to meet security concerns.

In addition to having enhanced security, Red Hat’s solutions were much more economical than others. To sustain the existing environment and increase capability, it would have cost Hill a minimum of $5 million per year to use Solaris. Red Hat’s Linux cost $100,000, just two percent of the cost of the old operating system.

So, let's get this straight: the RHEL-based system cost 2% of HAFB's existing system, but RHEL reduced its footprint by 25 percent. The nightly load time for the base’s largest application was reduced from an average of 12 hours to just 3 hours per night. There is an increase in capacity, reliability and security, allowing end users to work more efficiently.

Smells like innovation to me.

I also really like Warner Music Group's use of JBoss Enterprise Middleware Suite. [Note: In Alfresco's early days, I believe that one of our partners competed for this deal, and lost, causing me pangs of remorse as I type this. :-) ]

The Digital Properties Division of Warner Music Group provides in-house website development services for all of the entities that comprise the vastly distributed organization. With hundreds of labels and artists managing their own websites, efficient data management was a huge challenge for the Division....

The new SOA implementation created an affordable, easy-to-maintain, and scalable system, resulting in enormous time and cost savings for the Digital Properties Division and across the WMG enterprise. Because the Division no longer has to pay for software licenses, annual support costs have dropped significantly. Developers now maintain the system easily, accessing the code and solving problems quickly as they arise. As a result of using open source code, the development team is much more self-sufficient and completely vendor independent. Unlike the previous solution which would stall when too much data was added, the SOA system provides maximum scalability to support the continuous growth of the company. Integration with eCommerce vendors , integration with B2B partners , integration with ad servers and provision of a platform to be used for search optimization on websites has been easily achieved with this solution making this tool the heart of WMG’s drive to take the artist and label websites to the next genration of ad generated revenue , ecommerce enablement and provide optimized search techniques.

The new SOA system also resulted in increased user satisfaction within the WMG enterprise. The streamlined solution eliminated layers of web pages, enabling web managers to maneuver through the asset management system more quickly and work on their sites more effectively.

I don't know about you, but when I read things like this - with companies like Warner Music Group, Mckesson, Hill Air Force Base, and others lining up to trumpet the benefits they've derived from open source, I can't help but think that now is a perfect time to be working with and for open source software.

Look who's coming to OSBC

I just went through the attendee list for the Open Source Business Conference and loved what I saw. For the first time, OSBC is truly drawing a deep bench of IT buyers. It's something that we have strived for since the first show (well, the second, since the first show was intended to be a vendor strategy event), and which has finally happened.

We have CIOs/VPs/Directors from the following companies (and I won't even bother to go into all the CXOs/VPs we have from Red Hat, MySQL, Alfresco, Microsoft, MuleSource, JasperSoft, SugarCRM, OpenBravo, Loopfuse, Zmanda, XenSource, etc. etc. - this is the place to find out what's now and what's coming in open source):

B. M. Trading International
Boise Cascade
Lehman Brothers
Genealogical Society of Utah
Denali Oil & Gas
Bank of America
Sony Playstation Group
Barclays Global
Activision
Electronic Arts
H&R Block
SRI International
Ricoh
Vancouver Community College
Christian Science Monitor
Los Alamos National Laboratory
Golden Gate University
E*Trade
Leapfrog Enterprises
eBay
France Telecom
MIT
Nokia
Pacific Gas & Electric
Seagate Technology
Orange (Telecom)
Fisher Investments
Washington Post
Yahoo!
Google
SurfControl
University of Illinois at Urbana-Champaign
Federal Express
Nikon

And a range of others. I got tired of typing. What a great group of enterprise IT buyers! This will definitely be the best OSBC we've ever done. (Btw, if you're with an IT group and are having trouble swinging the attendance fee, let me know. I may be able to intervene with InfoWorld.)

Open source investments up, but exits...not yet

In his annual post (sorry, Larry - couldn't help myself :-), Larry has tracked open source venture investments and posted the results: over $1B in open source investments in the last three years alone. If we add in investments prior to 2004 (which Larry doesn't do), we scrape $2B.

Given how frugal open source companies tend to operate, there's an implicit multiplier on those dollars, making a $2B investment very, very big indeed.

But Larry doesn't think we're going to see significant upticks in open source investment over the next year or so, and I think his reasons are sound, with the second contributing back to his first (i.e., VCs want to spread risk and so won't overload themselves with open source investments):

...[T]he ability to make a large return on an investment in an open source company is still largely unproven and investors are going to hesitate to plow more money into Open Source until they have more evidence of success. Yes, we have a few success stories: Red Hat, JBoss, TrollTech, and SourceFire. But that’s a pretty thin list....Based on the maturity of the existing private Open Source companies, I don’t think we’re likely to see another large proof point until 2008, and multiple proof points until 2009. I think MySQL is a first quarter 2008 IPO if they can successfully transition to US GAAP accounting and demonstrate predictable growth in 2007. After MySQL there are several private Open Source companies that will do more than $20MM in bookings or revenue in 2007, positioning themselves for $40MM+ in 2008 and an early 2009 IPO. That means we’re at least a year, and maybe 2, from the more significant proof points needed to encourage more investment.

Larry is right. It's not that open source isn't being adopted en masse (it is), but rather that it takes time for this to show up in the balance sheets of open source vendors.

In the meantime, it's enough that virtually every software and services vendor is now incorporating open source software and strategies. The assimilation is nearly complete. :-)

Winning, but do we have to win ugly?

Liverpool just beat Chelsea in the semifinals of the Champions League. While I'm ecstatic to see Chelski lose (nothing like a healthy dose of schadenfreude to help me sleep better after a dismal Arsenal season), it was painful to watch Liverpool win. They have to be one of the worst successful teams ever to play football (soccer).

Boot the ball over the top, trying to get it to Peter Crouch, who has played well for Liverpool but not well enough to be in a club like Liverpool. At any rate, it makes for dull, thoughtless football.

Now compare the opposition. I dislike Chelsea because the team has paid nearly $1B to assemble a team of superstars. No real club history there - just a Russian billionaire with money to burn and suddenly Chelsea wins two Premiership titles. Chelsea plays for money, not for history.

Not to make a bad analogy (but I will, anyway :-), but the ongoing software battle between proprietary vendors (Chelsea) and open source startups (Liverpool?) strikes me the same at times. On one hand you have a club that (mostly) plays good football, but only because it's got mountains of cash (Chelsea). On the other hand you have open source vendors who, at times, have shown little creativity on the pitch. Cannibalize a big market with a cheaper alternative. (Liverpool)

What I'd like to see more of is Arsenal. Highly innovative, creative football. Cannibalize big markets - fine. But do so with flair and with innovation, which ends up creating new markets.

To do this, I think we need to improvise (further) open source business models. I love Red Hat's model because I think it forces a lean, "hungry" way of looking at the market. Cut back your ability to subsist on fats and sugars and you find all sorts of "healthier" ways to make money.

But I do think there's something more. Just not sure what yet. Maybe it is the Google model - distribute services over the web. But I want to think there's a Google-esque way to monetize the software/service around it directly....

But maybe I'm wrong.