A blog for the enterprise open source community
IT giants in open source for competition, cashJay Lyman, April 18, 2008 @ 2:57 pm ET
I spent part of yesterday attending the Open Source Summit at Portland’s Innotech Business and Technology Conference, and moderating a panel on ‘IT Giants and Open Source.’ We had a great discussion about the reasons, roles, responsibilities and rewards for big vendors to be acutely and adequately participating in open source software development and commercialization. Our fabulous panelists were Danese Cooper, open source diva, knitting machine and present to give perspective from Intel, Stuart Cohen of OSDL fame and current leader of startup CSI and Gerrit Huizenga, an IBM Solutions Architect working with Linux in the cloud, who when asked how to pronounce his last name correctly, politely told me, ‘Very carefully’ (Hi-zen-ga).
There was general agreement that large IT vendors, including software giants such as Google, Oracle and even Microsoft, all see a need for involvement in open source. What also emerged as a common theme during our panel was that no big vendor could afford not to be in open source in some way or another. Basically, it’s been competitive necessity and cost effectiveness that has led vendors to open source, and this helps explain why we see open source all over the place. There was also a recognition that we were not talking about what vendors might be doing or when they might be making moves around open source. We were talking about the things these vendors are doing today and where they are looking next to push the ideas and advantages of open source further.
We also talked about the responsibility of vendors, and the basic theme here was that companies better know what they’re doing with open source. Rule number one seemed to be that participation is not optional. This is particularly so when a large vendor wants to try and leverage that open source code and development for commercial gain that, in most cases, is now stretching into the billions for the big players. Panalists contemplating the IT giants and open source also pointed to the enterprise credibility that large companies can give open source software by providing commercial support. It’s true that one of the biggest inhibitors to open source use by businesses is their wariness of using software without a company and commercial support behind it. The commercial support options for open source continue to grow with SIs, OS companies, application vendors and others all providing support for more open source software. However, CSI’s Cohen contends that there is so much new open source software being created, there are not enough commercial support providers to keep up. This could mean that commercial support for open source will continue to be a challenge, but it also highlights the opportunity in supporting open source.
Another big topic was interoperability, which was my term and was pretty much broken down to mean standards in the view of our panelists. Unfortunately, there was strong agreement that today’s standards procedures and practices (ISO approval of OOXML perhaps still fresh in their minds) are not adequately promoting the kind of transparancy and collaboration needed. There was, however, somewhat of a bright spot in this discussion, and that was the recurring theme of customer demand for interoperability and truly open standards. The market is making vendors, from Red Hat to Microsoft, work harder to support and interoperate with each others’ technologies, both open source and proprietary, through truly open standards.
We discussed open source mergers and acquisitions from the view of the large vendors, and while Cooper called valuations from deals such as Citrix-XenSource ($500m) and Sun-MySQL ($1bn) signs of a bubble, Cohen contended that the value of an open source software operation is actually the same as a traditional one: the customers and relationships. I would argue that the high open source pricetags in recent M&A highlight how significant of a competitive factor these open source projects and vendors can be, forcing larger players to do some bidding and make aggressive moves.
Taking an audience question on how big software companies such as Microsoft and Oracle are viewing competition from open source, IBM’s Huizenga highlighted how all proprietary software companies are seeing more and more of their traditional revenue bases challenged by open source. This competition, highlighted in a recent study, comes with a growing audience of open source users, developers and yes, enterprises that do not pay anyone for any software, support or services, yet extend the reach of open source. Huizenga later highlighted the ongoing opportunity in open source software, referencing how IBM’s investements in Linux, far less than what would be invested in proprietary development, continue to pay off hansomely.
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