While many Enterprises are not keen on using GPL software because of the viral nature of the license model, they don’t have any issue in using Apache software. The Apache license doesn’t commit them barely to anything. But that’s not the only reason, Enterprises do love Apache software. It’s also the quality and lastly the Governance model of the Apache community that makes their software so valuable for Enterprises.

A new set of videos with interviews with some of the key members of the foundation highlights why the Apache foundation has been so successful and effective.
Have a look at the interview with Doug Cutting (also below), Paul Fremantle, Rich Bowen, Ross Gardler and Jean-Frederic Clere see the leaders/founders/committers of projects such as the Apache Webserver, Tomcat, Hadoop, Lucene and others talk about what they think is important with Apache.

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Lately there have been quite a number of discussions around the objectives and definitions of the “Open Core” model. Aaron Fulkerson for example explained how Open Core helped him to improve his business model. Matthew Aslett clarified the definition of the model. Open Core described the strategy to keep the central elements of a product open (in the sense of Open Source) and sell additional components/features/elements commercially. Companies adopting this model are MindTouch, MySQL, JasperSoft and others . The definition is debated, but you get the point.
Now, why should an Enterprise care about this?
Here are the key advantages of the Open Core model taking an Enterprise perspective:

• The core of the product is completely Open Source and valuable because it’s the same that is used in the extended product. It’s therefore a good basis for a community to work on
• The core of the product is useful in itself and not castrated. For basic users it’s therefore a good product to work with
• Extensions are not Open Source but over time become typically part of the new core, so a continuous flow of new features can be expected also in the core.
• The product is architected for extensibility and integration typically and allows for other extensions (from the community) to be added.

So, communities should actually love this. And if communities love it, there’s a positive dynamic that is the basis of rapid extensions, code quality improvements and broad input for the requirement gathering. So the basis is set to have an active community gathered and this is good for the Enterprise. As it has been discussed before (link to blog - do enterprise actually care about open source), Enterprises more often than not, actually will buy the subscription for the bigger and commercial version of the product. So the licensing model of the core may not be an issue. But of course it is an issue for the community and the product owner. Communities love Apache, BSD and Mozilla licenses, product vendors prefer the more restrictive GPL approach that protects their commercial interest better. The Enterprise will not care as long as its interests are not restricted by the applied licenses.
So, for an Enterprise, the Open Core model may be better than other models if they help to produce larger communities, faster development/extensions and better quality. That’s what matters, besides low cost of product/technology ownership and flexibility in its use.

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We all know, it’s not that easy to make money with Open Source. While Open Source has proven to be a great marketing (and distribution) tool, the implementation of Open Source based business models that are both profitable and scalable, have proven to be difficult. If you can’t sell the software you are missing an important revenue generator of traditional software companies. To compensate for this many commercial open source companies have created so called “enterprise versions” of their software, in most cases sold under a non-open-source license in subscription form. Enterprise version typically include additional features important to large companies - LDAP integration is one of the most common ones - and come with additional service packages such as extended compatibility testing, maintenance or support.  So far so good. But the license models applied can be very restrictive sometimes, asking for the rights on all modifications and developments done by the client for example. In the worst case this could mean that if a company decides to no longer pay for the subscription, the future use of the software installed is no longer permitted and all code developed or changed has to be shipped to the software provider. This is clearly far away from the ideas driving the Open Source movement. And of course many of the commercial Open Source companies apply a much more “free” model. So, maybe we need a FAIR TRADE label to separate the “good” ones from the “bad” ones? You may want to say that Open Source as such wanted to make this distinction already. But as we see there’s constant evolution and some of it may not show into the right direction.

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Enterprises are quite worried about Open Source license models and potential legal issues. I have been talking to companies that claimed to not use any GPL type software because of the viral nature of the license. Others have decided to install complex processes to make sure that every license is understood and all consequences checked. Do Enterprises bother too much here? Many probably could take it a bit easier given that most use is really use, very few companies actually alter the software they download. And even if they did, it still wouldn’t be an issue as long as the software is not redistributed. There may be situations in international companies with many subsidiaries and legal entities, where “distribution” could become an issue even inside the enterprise, but this occasions are rare and shouldn’t be the reason for banning GPL. Many companies are also afraid to publish software (or software changes) because of the potential liability claims, but there are ways around this too. So, if your Enterprise doesn’t use Open Source for purely legal issues, it may be right to ask a second (or third) time before giving in.

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There have been a number of discussions lately on whether enterprises care whether what they use is really open source (EOS Directory), whether they are ready to contribute (Matthew Aslett, 451 chaos theory) and on how companies can design their revenue model (e.g. the open core thinking). Having talked to many enterprises over the last months and years they have their own perspective on this. Most enterprises want to work with long term viable partners, they want to use software that is still there in a couple of years and many want to purchase some sort of an insurance protection to make sure that if things go wrong they have access to help and support. The whole commercial software movements and the related VC funding is a consequence of this. However, not in all cases this lead to the best solutions and approaches. Many enterprises prefer software products that have a large community supporting it. Commercial open source software however often leads to models with fairly small companies doing the core development of a specialized product, the community being reduced to a testing and bug reporting role. Enterprises also prefer to have full access to the source code, even if they never want to use it themselves. And enterprises love software that can be supported by a number of different providers to create a competitive marketplace. Software from the Apache Foundation scores well along these criterias. VC backed open source companies forced to make money and therefore protect and monetize their IP have more difficulties to live up to these mentioned enterprise criteria. Seeing the constant changes in business models, license models and go-to-market approaches, companies out there are still looking for the recipe for success.

There are a number of ways to make money with open source and combined with this there are a number of trade-offs to make and decisions to take:

• Should the core of the product be open source or commercial?
• Should extensions of the product be open source or commercial?
• Should you build a slim more consumer oriented version as open source and an enterprise oriented feature rich version as a commercial software?
• Can you monetize “management services”, such as packaging, testing?
• Can support services be provided for money?
• Do users need training services and are ready to pay for it?
• Can professional services such as product consulting, implementation/integration support be marketed?

When a company wanting to make money with open source has to answer the questions above, then there always have to be considered some consequences in key areas of the business. How will potential partners (needed to bring the software to the market) accept revenue models, how will a community react, how will potential customers cope with it? And does a decision restrict the company in the way other software components can be integrated or used?

The ideal scenario for Enterprises might be a company with a widely open product (core and extensions) and an attractive but not mandatory services portfolio on top. Ideally the product is able to attract a large community and the processes and procedures applied ensure a high standard for  software quality and a manageable release frequency. It is obvious however that with such an approach growth and expected multiples are less attractive for investors than IP and product centric companies. We have even observed that a number of companies have moved away from the ideal scenario after they received VC funding and are now protecting and monetizing more and more of their IP. Which, in some cases, makes them a less attractive choice for enterprises.

The continuous struggle on how to make money with something that is perceived as being free will continue. We most likely will see new models and trials and sort of “thanks” to the current economic conditions we well probably also see more humble approaches that may actually please enterprises much better than some of the marketing oriented open source misuses that we have observed in the market.

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There’s a pretty stable definition out there what Open Source software is all about and what license models should allow for and what not. Despite of that Enterprises seem not to care too much about this.

For many enterprise using Open Source support and services are more important than the true nature of software, it seems. Often the prefer the commercially licensed product with the attached subscriptions to be on the safe side. But this can mean that the software they use isn’t Open Source at all and that changes and modifications they do might not even belong them.

A lot of Open Source software today is consumed as Software as a Services (SaaS). In this case nobody  cares whether the software that is the basis of the application is Open Source or not. And this makes sense, because in this case a service is purchased not a software.

Many customers also buy appliances instead of  software and hardware separately. Again, nobody needs to worry about what’s in the box, it’s purchased as an integral product.

And, when Enterprises buy commercial software products, a lot of it today is assembled from Open Source components. But there is no need to care about this as what companies buy is the packaged software.

So, four cases, but only in one of them the nature of the software is critical. There hasn’t been enough push back from Enterprises to force commercial open source companies to come up with Open Source compliant commercial license models. Some of the problems can be resolved in individual negotiations, but that’s cumbersome. So, what would be preferrable are license models that allow the commercial software company to make money while protecting as much of the Open Source nature of the base software. Let’s see what new models we’ll see over the next months and years.

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Mergers and acquisitions made the news again this week which, given the Microsoft-Yahoo bid, is like saying the Biblical flood was an interesting weather event. Best MSFT-YHOO one-liner, again from Kara Swisher of Wall Street Journal’s BoomTown: “And while it’s never over until it’s over, let me just say, for Yahoo, it’s over.”

The deal has open source implications too, such as: what becomes of Zimbra? Some opinions:

• Yahoo! buy would give Microsoft ownership of open source e-mail, projects, code. Ugh. (ZDNet Open Source)
• Microsoft and open source: Welcome to the Borg? (Open Road)
• Microsoft’s open-source strategy: A picture is worth a thousand words (All About Microsoft)
• Microsoft/Yahoo Combo Equals Bad News for Web 2.0, Open Source (Intelligent Enterprise)
• MS-Yow!, not MS-Yahoo! for Open Source (open…)
• YahooSoft Bid Shakes The Start-Ups (Forbes.com)
• Yahoo-Microsoft: Corporate Culture Problem Squared (portfolio.com)

We’ll blog more on the current open source M&A boom next week. But what’s your take? Do you think consolidation among open source projects helps or hinders adoption by enterprise open source users? Post your comments below.

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Today’s Wall Street Journal has a great story on HP’s efforts to shrink the size and cost of their IT infrastucture. “Taming Technology Sprawl” (subscription required) details some of the issues the tech giant faced trying to slim down a tech infrastructure swollen by multiple acquisitions and overlapping IT staffs.

“Since July 2005, the Palo Alto, Calif., firm has been in a project to cut the number of computer programs it uses by more than half, and reduce the number of its data centers — where large computers run programs that support H-P’s businesses — to six from 85.”

The cost is significant. “H-P spent $4.2 billion — about 5% of 2005 revenue — to maintain its IT systems” and aims to drop that to 2% of revenue and shed half of the 19,000 person staff.

A key problem? Too many software programs.

“Abour eight months after launching the overhaul in mid-2005, H-P’s new Chief Information Officer Randy Mott unexpectedly hit a hurdle. According to a February 2006 survey, H-P employees depended on about 6,000 computer programs — nearly double what Mr. Mott had expected. By then, he was months into the project and had allocated money and staff based on earlier assumptions. “I was blindsided,” says Mr. Mott, who formerly worked at Dell Inc. and Wal-Mart Stores Inc.”

The story goes on to describe other issues, including how CIO Mott had to battle VPs who were loath to give up their departmental computing resources. But I kept thinking about how difficult it is to really keep track of what software programs are in use within an organization, and how many of those might be open-source or otherwise untraceable through conventional license tracking. Then I spotted a mention of Matt Asay’s News.com blog item on the story behind HP’s FOSSology open-source tools. Asay quotes HP’s Christine Marino, VP of Linux and open source, on the creation of an open source tool for open source governance.

Free and open-source software is everywhere. It’s not just Linux (not that Linux is just one thing, anyway). At HP we’ve been using free and open-source software throughout our company for years as a consumer and contributor of free and open-source software.

Many years ago we realized that we needed some processes around our adoption of open source. We were very clear that we wanted to take advantage of FOSS (free and open-source software) but also that we needed to manage our use of it. Our processes have grown and evolved over the years, and we’ve written software to assist with these processes.

About 18 months ago during our open-source customer councils we talked about the tools that we had built internally and there was almost a rush to the doors, with our customers clamoring for these kinds of tools to help them manage their open-source adoption. So, really, it was our customers asking for our assistance in managing their open-source software that was the impetus for our open-sourcing our framework today.

Martino goes on to say that HP considered creating a proprietary product but chose to stay with open source tools because “there’s no one-size-fits-all approach to FOSS governance.” She does not mention CIO Mott, but I can well believe FOSS tracking tools got a big boost internally when the IT cost reduction project arrived.

All of this makes me wonder if there are open source tools for managing both FOSS and proprietary software governance? Does open source have a role to play in IT mangement of both types? Post your comments on this issue below.

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Everyone says you get more with open source. So here you go — ten CEOs of open source companies offering their views on the enterprise open source outlook for the New Year. Sponsored by the Open Solutions Alliance (OSA), the CEOs of member companies responded to four questions about open source issues for 2008. Some sample prognostications:

1. What will trigger increasing adoption of open source in the enterprise in 2008?

“There will be an increasing confluence between the open source and software as a service models. These are the two most powerful trends in software today, and while they’ve traditionally been seen as separate, parallel developments, they are rapidly combining to create the new business model for enterprise software. The combination is not just at the development level — BaaS companies adopting open source technologies to lower the cost of operations and R&D — but more importantly, on the distribution side.” — William A. Soward, CEO, Adaptive Planning

2. What is the biggest challenge for the open source software industry in 2008?

“More lawsuits will be brought against large corporations and technology companies in 2008 as open source advocates step up enforcement of the APL v2, v and other open source licenses.” — Doug Levin, CEO, Black Duck

“Figuring out business models that will produce viable, long term software companies rather than ‘flash in the pan’ ubiquity plays. Merely racing to see who can give the most away to a buyer who will take as much as the can get before paying money will not produce viable software companies.” — Javier Soltero, CEO, Hyperic

3. How big an effect will licensing have on open-source software in 2008?

“Open source licensing will continue to bother enterprise users but the dissemination of best implementation practices including license management will reduce this issue somewhat.” — Michael Grove, CEO, OpenIT Works

“We don’t see much impact here. Customers continue to get educated about the code they use and about open source licensing in general, so FUD will have less of a factor than in the past.” — Kim Polese, CEO, SpikeSource

4. What will be the biggest surprise in open source in 2008?

“During ‘08, the pressures CIOs will face to drive greater business innovation with a fixed (or low growth) IT budget will conspire to challenge every possible traditional software license. The 80% of the IT budget used to maintain existing or legacy systems must become more productive in order to satisfy the business goal of improved innovation.” — Brian Gentile, CEO, JasperSoft

“The biggest surprise in 2008 will be to see Open Source players register three-digit growth rates!” — Bertrand Diard, CEO, Talend

Get the complete list of questions and responses from the Open Solutions Alliance (OSA) site. (PDF)

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The GNU Affero GPL (GAGPL) Version 3 and the companion Affero GPL version 2 licenses released last week provide for public access to source code (modified or not) running on a network server. The current GPLv3 license does not cover this specific scenario, hence the new license version.

To give an example, if you are browsing the latest hosted social media application and it displays the GAGPLv3 license, you should be able to locate and download the source code for the application you are using. You might have to pay a fee — remember the “free” in free software means freedom to copy, not the price — but you will have the source with the modifications to use as you see fit, subject to the other stipulations in the license. As developers adopt this license, will it cause web sites to rethink dependence on open source components?

Palle Pedersen’s blog post “Is AGPL (Affero GPL) the Doom of Google?” has a lengthy analysis of the issue. He notes:

A wide adoption of the AGPL would change a current standard practice for creating a web application, where the developers start with a few pieces of GPL software and then modify the software until it suits their needs. With AGPL software in the mix, a business decision would have to be made on whether to use AGPL software and make source code for modifications and additions available - or to avoid AGPL software and spend more time developing software which can be kept out of the hands of competitors and potential hackers.

Larger companies, e.g. Google and Yahoo, are actually among the best positioned to live in this new world. They can carefully evaluate the trade-offs on a case-by-case basis and can introduce processes to make sure that AGPL code does not sneak into places where it should not be.

It will be interesting to watch the rate at which this new license is adopted. One source for tracking open source license adoption rates is Black Duck Software’s Open Source License Resource Center. Read the Free Software Foundation’s announcement of the new license here.

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