Monday, April 13, 2009

Open Source and Cloud: A Curse or Blessing During Recession? BriefingsDirect Analysts Weigh In.

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The productivity and perils of open source software has been a topic pretty much beaten to death. Yet the landscape in IT, as always, is shifting -- because of the recession and because of a white hot interest in cloud computing.

It's time again, then, to look at the pluses and minuses of open source software models in the context of tight IT budgets and the advent of cloud-based services for enterprises. Our latest BriefingsDirect Analyst Insights roundtable discussion, vol. 39, therefore examines open source in the context of economics, complexity, competition, and the disruption of the shifting business models in software.

The major question is: Does using open-source software pay off in a total cost sense, compared to commercial offerings today? Furthermore, how will this change over the coming several years as cloud models take hold?

Please join noted IT industry analysts and experts Tony Baer, senior analyst at Ovum; Jim Kobielus, senior analyst at Forrester Research; JP Morgenthal, independent analyst and IT consultant, and David A. Kelly, president of Upside Research. Our guests are Paul Fremantle, the chief technology officer at WSO2 and a vice president with the Apache Software Foundation; Miko Matsumura, vice president and deputy CTO at Software AG, and Richard Seibt, the former CEO at SUSE Linux, and founder of the Open Source Business Foundation. Our discussion is hosted and moderated by me.

Here are some excerpts:
Morgenthal: I believe that open source and noncommercial licensing is a good thing and has been very positive for the industry as a whole. My concern is for the proliferation of free software, that is, the commercial software that businesses use without paying any license and, optionally, only have to pay maintenance for to run their business. They earn their profit using that software to run their business, and yet nothing is given back to the software industry.

In my opinion, it's like a flower that's not getting fed through its roots, and eventually that flower will wither and die. To me, it’s almost parasitic, in that there are good parasites and bad parasites. Right now, it's proving itself to be a little bit on the good parasite side, but with a slight permutation, this thing can turn around and kill the host.

... Anytime you have a model where something is given away for free, at some point the free stops. It's very difficult to monetize going forth, because every buy is a buyer's remorse. "I could have had that for free."

... Economically long-term, I don't believe anybody has thought about where these changes stop and what they end up cannibalizing. Maybe we end up with a great market, and maybe we don't. I'd just love to see some attention paid to detail before people just willy-nilly go do these things. What is the long-term impact here?

Kobielus: There's a broader range of options for the buyer in terms of how they can acquire this functionality through open-source or commercial licenses, appliances, cloud, and so forth. ... Open source has been a good parasite. ... Innovation is going like gangbusters, but the business model of being a pure software vendor based on pure commercial licensing is dying out.

Matsumura: Complexity is a really powerful force in the economy and in enterprise software in general. One of the things that open source is doing is helping to simplify some of the infrastructural components and to decrease the overall condition of heterogeneity. ... We have learned that in the business of service-oriented architecture (SOA) and business process management (BPM) -- which are called middleware businesses -- is that chaos is perpetual, in the sense that there are two major driving forces in the economy: competition and consolidation.

Sure, there is commoditization in the IT platform, which is advanced by open source. Contrary to what JP was saying, one of the great things about open source is that it forces IT organizations like Software AG to selectively pick where they make their investment. They will put their investments in at the leading edge of complexity, as opposed to where things have slowed down and are not changing quite as fast.

Open source for quality innovation

Fremantle: There's a change in the marketplace. ... What I see is what you might call "managed commoditization." In a way we've had commoditization of all sorts of things. No one pays money for the TCP/IP stack. That's a piece of open-source software that has now become ubiquitous. It's not of interest to anyone. It's just a commodity that's free. ... I don't think we need innovation in that space. [Disclosure: WSO2 is a sponsor of BriefingsDirect podcasts.]

If you do something interesting and innovative, whether you are open source or not, if you partner with your customers and really add value, then they will pay you, whether or not your license forces them. The license is a blunt instrument. ... To me, that's something that was abused by software companies for many years.

What open source is doing is sorting the wheat from the chaff. It's sorting out, "Is this something that is a commodity that I don't want to pay for, or is this something that has real value and is innovative, and that I need the support, the subscription, and the help of this company to help me implement?"

Seibt: It's absolutely true that open-source companies are very innovative. If you look at SaaS or even cloud computing, there are many startups that probably lead the way. For open source, we look at that market from a customer perspective. They use the software because of its innovation, its quality, and its cost, and they wouldn't use it for any other reason. It is the innovation, quality, and cost.

Open source is moving up the stack and has reached the SOA level. Large corporations are using open-source SOA frameworks, because they want to be fully independent from any vendor. They trust themselves to develop this piece of software together with the bigger community, which becomes a community of enterprises. Innovation is not only from startups, but it's from large corporations, as well.

Cloud masks use of open source

Kelly: I'm not sure that cloud computing necessarily opens up the field for open-source computing. To some extent, it almost shuts it down, because it then becomes cloud as a series of application programming interfaces (APIs) or a series of standardized connections or services out there that could be supported by anything. Open source is one solution. The one that's going to win is going to be the most efficient one, rather than the lowest cost one, which may or may not be open source.

As you look at cloud computing, some of the initiative that we saw with original open-source roll outs over the past 10 years has been almost mitigated. ... My question really is how far can the open-source innovation go. As organizations move into business processes and business-driven value, all the executives that I talk to don't want to focus on the lower-level infrastructure. They want to focus on what value this software is giving in terms of supporting my business processes. ... They don't want to be in the software-development business.

How far can open source go up that stack to the business process to support custom applications, or is it always going to be this kind of really lower-level infrastructure component? That's the question that I think about.

Morgenthal: The cloud actually hides a whole other layer of the "what and the how" from the user and the consumer, which could work in favor of open source or it could work against open source. ... As long as that thing works, it's reliable, and can be proven reliable, it can be put together with chewing gum and toothpicks and no one would know the difference.

Gardner: JP brings up an interesting issue. It's about risk. If I go down a fully open-source path as an enterprise or as a service provider, is that going to lead me into a high-risk situation, where I can't get support and innovation? Is it less risky to go in a commercial direction? Perhaps, the best alternative is a hedged approach, where there is a hybrid, where I go commercial with some products and I go open source with others, and I have more choice over time.

Matsumura: We're already beginning to hybridize. Even with customers who are acquiring our technology, our technology takes advantage of a lot of open-source technologies, and we have built components. As I said, we're very selective about how we choose to make our investments.

We're investing in areas that obviously are not as commoditized, just because a rolling stone doesn't gather any moss. The big sections of the market, where things have cooled off a lot, where open source can kind of create pavement, is somewhat irreversible.

Our customers need to be able to successfully compete in the market, not just on the basis of lowering the cost of operations through free stuff, but really to be able to differentiate themselves and pull away from the pack. There is always going to be a leading edge of competitive capability through technology. Companies that don't invest in that are going to be left behind in an uptick.

Collaboration between provider and user

Fremantle: Most open-source software is not free. If you want the same things that you get from a proprietary vendor -- which is support, bug fixes, patches, service packs, those kind of things -- then you pay for them, just as you do with a proprietary vendor. The difference is in the partnerships that you have with that company.

What a lot of this has missed is the partnership you have in an open-source project is not just about code. It's about the roadmap. It's about sharing user stories more openly. It's about sharing the development plan more openly. It's a whole ecosystem of partnership, which is very different from that which you have with a standard commercial vendor.

There is an opportunity here to build frameworks that really scale out. For example, you may have an internal cloud based on Eucalyptus and an external cloud based on Amazon. You can scale seamlessly between those two, and you can scale up within your internal cloud till you hit that point. Open-source software offers a more flexible approach to that.

Kobielus: In many ways, the cloud community, as it grows and establishes itself as a viable business model, will increasingly be funding and subsidizing various open-source efforts that we probably haven't even put on the drawing board yet. That will be in a lot of areas, such as possibly an open-source distribution of a shared-nothing, massively parallel processing, data warehousing platform for example. Things like that are absolutely critical for the ongoing development of a scale for cloud architecture.

If there is going to be a truly universal cloud, there is going to have to be a truly universal open-source scale-out of software.
Read a full transcript of the discussion.

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