Wednesday Sep 23, 2009

Mind Your Own Business (Model)

Achat de Chevaux

I'm not sure why, but the "there is no open source business model" discussion has woken up again, with Matthew Aslett and Stephen Walli in particular chipping in views. Last time this debate arose was when 451 published a report of the same name. That report made quite a few people in the FOSS communities unhappy because it propagated the "open core" view that a business with an open source element somewhere in its activities (what Stephe calls a tool) could be described as an "open source business".

Oxymoron

Why is there no "open source business model"? Because open source is not a business. It's the same oxymoronic thinking as the question "how can you make money if you give the software away for free", which simply can't be answered without correcting the questioner's worldview.

To assert there is "an open source business model" is to lose sight of the nature of open source. It may have been a fair thing to do when open source was a novelty to business minds, but even considering there could be such a thing leads people to misunderstand open source and treat the exceptions - like MySQL - as the rule. Not that it's wrong to monetise ubiquity at the point of deployment by delivering the value that allows scaling (enabling adoption-led behaviour). It's just most open source community members don't do that.

Synchronisation of Interest Elements

An open source project is a community of participants that gathers around a free software commons, with each participant aligning an element of their interests with the interests of all the others there, in order to collaborate. The OSI-approved license gives them the freedom to do so. Each participant comes to the community with their own individual interest, which in the case of a business will stem from their own business model. The community itself is about the Free code in the commons. Just about the code - all other matters are subjugated (at least in working communities!).

An open source community is thus a mix of many motivations. If there's only one motivation present - only one "business model" - it's unlikely there is any true community either. People only care about the business model when there's only one business; in a real community the only way to get along is to mind your own business (model) and not try to mess with anyone else's.

Wednesday Jan 28, 2009

Open Source Drives The New Sun

Full moon rising over cloud

The Register article reporting Ian Murdock's move to Sun's new cloud computing group seems to have irritated Ian and it does indeed seem to be an attempt to gather as many half-understood-half-facts as possible and sensationalize them.

Far from being a "shift in Sun's thinking from the open-source software mindset of two years back and into the nebulous cloud market", the restructure of Sun's business units (happened last November actually) demonstrates Sun moving to the next level with open source, since all three business units - that's the whole company, for those keeping count - are driven by the three viable open source business models:

Payment at the point of value
The Application Platforms group covers infrastructure software like JavaEE (Glassfish) and MySQL and its primary business model is the one I discussed a while back where Sun drives adoption of the software and then sells the means to sustain value as the customer scales deployment.
Open Source Firmware
The Systems group covers storage, servers and the software chiefly associated with them and sells high-value, low price-point systems where the open source software is the operating system or firmware. You could often make the same systems yourself if you wanted; Sun does it better, at lower cost and with full support. Take a look at Open Storage and its use of OpenSolaris, ZFS and DTrace to get the idea.
Cloud Computing/SaaS
The new Cloud Computing group that Ian has joined (leaving his job running developer marketing - he's not been at OpenSolaris for quite some time) plans to run its cloud on open source and sell a reliable, supported, scalable service over the network.

From this you'll see that, far from moving away from open source, Sun has put it at the heart of every business unit. Maybe that would have made for an even more sensational story if the journalist had asked?

Monday Nov 10, 2008

Phase 3 of the Sun Model

Liberty Staircase

I wrote recently about the Sun Model for open source business, my high-level overview of how Sun is working with open source.

To summarise:

  1. remove barriers to software adoption between download and deploy;
  2. encourage a large and cohesive community of software deployers;
  3. deliver, for a fee, the means to create value between deploy and scale, for those who need it.

I've had a number of comments and questions about that third phase. It can include all kinds of value-creation, depending on the product in question. Here are some examples of delivering value for people who have already deployed and are heading towards scale:

  • For Solaris and OpenSolaris, Sun offers subscriptions that include the updates, support and warrantly that allows deployers to get the maximum up-time and performance for the minimum cost. You can get the same results yourself by hiring experts to do the work for you, but the Sun subscriptions save money and time.
  • For MySQL,there is the same sort of deal with the addition of software features needed only by those between deploy and scale, such as MySQL Enterprise Monitor.
  • For Glassfish, again, there is a subscription offering that's perfect for those who have taken the decision to deploy and now want the greatest value with the least fuss.
  • ... and so on, across the portfolio.
Devlievering value can take many forms, and nothing is absolutely forbidden unless is creates a barrier between download and deployment in any way.

...and hardware too

But it would be a mistake to believe Sun's open source strategy is only about software. As has been frequently explained, Sun is a systems company, and the news last week and today underlines that fact by showing two new ways Sun is offering value for those between deploy and scale:

  • Systems for MySQL

    Recently, the first database servers optimised for MySQL were made available. For MySQL users who have moved beyond initial deployment and are now looking for high performance servers with rock solid support at great price points, these are excellent. They are optional, but I'd wager most people will save money and create more value by graduating to them for some applications.

  • Unified Storage

    Today's huge news is the release of the new Sun Storage 7000 Series. These new storage appliances create value by combining open source software with commodity hardware and very clever programming and hardware design to deliver low cost storage appliances with great performance. And the use of open source means the extra access protocols other storage vendors try to charge for are included free.

There's plenty more to say on this subject.  For Sun, open source is not a matter of warm statements of alignment while we carry on with the same old business or keep our core products proprietary. I hope it's becoming clear that the Sun Model is a directional matter.

Monday Apr 07, 2008

An Adoption-Led Business Model In Action

Swan

If you've been following my series on the adoption-led market, you may have been looking for some solid examples of how a software vendor can build a business model that is designed for an adoption-led market. Solaris is already there, offering subscriptions for updates, defect resolution, indemnity and more of the values that the deployers of Solaris look for. I've kept looking to OpenJDK waiting for the same business model to emerge.

Well, today it happened. Sun announced Java SE For Business. It's not something that's likely to show up much in bids for new business. Rather, it offers companies that have already adopted the Java platform a new subscription that will reduce their overall costs and improve their success in using the Java platform to run their business. There are three levels:

  • Standard Support extends the life of existing Java applications for your organization and for your customers. Fixes provided to you will continue to be made available to Java SE for Business customers along with new operating system support and all other maintenance in quarterly updates. Perfect for customers whose primary interest is in running their Java applications much longer than ever possible before.
  • Premium Support adds the ability to have a fix provided to you by Sun to also be incorporated into Sun's next available bi-weekly standard revisions, ensuring your network of customers and partners can leverage that same fix, faster than ever before. Premium support is perfect for customers' whose Java application are critical for their and their customers businesses.
  • Premium Plus Support further adds the ability to request a quote for a Java SE for Business custom revision for an older update or revision of the Java platform (additional terms and conditions apply). Premium plus support is perfect for customers seeking maximum assurance for their Java applications from Sun.

No lock-in. No hard-sell. Just a value proposition that can be calmly evaluated on its merits. Java users have the complete freedom to work as they were, or to invest in a subscription and reap the benefits. Since Sun invests so heavily in the core contributors to the platform, it is uniquely positioned to offer the subscriptions. This is the heart of the primary business model for the adoption-led market and I believe we'll see a lot more of it.

[Previous: Why Adoption-Led Is Not Trialware | Root: The Adoption-led Market]

Tuesday Mar 11, 2008

Adoption-Led is not Shareware

Change and the Cathedral

In response to my article last week on the emerging adoption-led market, IBM's Savio Rodrigues suggests this is just a description of Shareware and asks why anyone would ever pay for what they got free.

I can't say I agree. Of course, there are similarities between the two - in fact, I was closely associated with a successful shareware business at the start of the 90s, so I have a fair insight into how that works. We actually had close to 10% of estimated users registering our software. But what I am describing is not the same model.

First, what I am describing is a change in the software lifecycle which is facilitated by open source, rather than a business model which is initiated by vendors. Software deployers will switch from procurement-driven to adoption-led patterns without any intervention from vendors; it's a natural consequence of software freedom. The question really is not whether or not this market will come, but how vendors will remain relevant in it.

Second, this is not a support-only model. The model assumes that enterprise users will want the value-added content of a "subscription" (the model most closely associated with Sun to date) or "enterprise version" (such as the RHAT model). Value-add can include patch management, performance tuning, additional utilities and more. Corporate governance regulations may make enterprises using software for a mission-critical purpose require a service contract, or seek a warranty for their software infrastructure. Those who are embedding software in their own product may require indemnity. Finally, many businesses are reluctant (for whatever reason) to use open source licenses and so want commercial licenses for their production systems.

So I think people are more than willing to pay if what they are paying for reduces costs or adds value. It's the software that's free of charge, not the people who work on it. They benefit from the freedom Free software brings, and their employers or customers benefit from the choices that freedom brings.

[Previous: The Adoption-led Market | Next: A Force Of Nature]

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