451 CAOS Theory 
A blog for the enterprise open source community
Open source and the cloud – the quick and the dead
Matthew Aslett, November 20, 2009 @ 12:49 pm ETSavio Rodrigues has published a post arguing that cloud platforms such as Amazon Web Services and Microsoft’s Azure pose a threat to the monetization of open source by specialist vendors.
Savio makes a good case based on the recent launch of AWS’s Relational Database Service, based on MySQL, and Microsoft’s support for MySQL and Tomcat on Azure:
“When Amazon decided to offer MySQL via Amazon RDS, they did so without purchasing MySQL support from Sun. I’ve confirmed that Microsoft Azure is supporting MySQL on Azure without paying Sun for a MySQL Enterprise subscription.”
Clearly there is a threat to open source vendors from cloud-based services. Meanwhile I have previous argued that the cloud and open source are complementary. Can both positions be valid?
I believe so, and I think it’s important to look at the technologies involved. Certainly, the ability of cloud platform providers to provide services based on infrastructure components such as MySQL and Tomcat threatens potential support revenues for on-premise deployments, but SugarCRM’s launch of CRM Applications on Windows Azure proves that just because the code is open source, does not mean that the cloud platform provider will automatically cut the vendor out of the picture.
Perhaps the difference with SugarCRM is that it is application, rather than infrastructure. Perhaps it is also the fact that SugarCRM has been proactive about exploring on-demand and cloud delivery models.
One of the reasons AWS was able to deliver the a managed MySQL service on EC2 was, frankly, because Sun had not already done so. All the realtional database vendors made their products available as AMIs on AWS in 2008 and since then they have done almost nothing about innovating delivery options abound those AMIs.
Had Sun launched MySQL-as-a-service on EC2 it could have grabbed the market share that AWS will now grab with RDS. I’m not sure why Sun failed to do this, incidentally. FathomDB did it, although it lacked the market presence to prevent AWS stealing the limelight. I would argue that Sun/MySQL could have done so.
Savio argues that open source specialists faced with this dilemma should double-down on their investments in “proprietary features in the ‘enterprise version of the open source product, which are note available in the ‘free community’ version”.
Certainly that is one opportunity for differentiation, but I would also argue that open source specialist vendors should also be concentrating on working with cloud platform providers to bring managed service deployments to market before the platform providers beat them to it.
I think in the long-term we’ll see more vendors providing open source software for on-premise deployment while offering enterprise versions via paid managed service deployments on cloud platforms, along with services to help customers migrate their data/applications from one deployment option to the other.
And if you’re wondering why a cloud provider would bother working with an open source specialist vendor, rather than just taking their code, consider this: one of the cloud providers mentioned in this post pays for enterprise Linux support subscriptions rather than using a community Linux or supporting its Linux servers internally. And it isn’t Microsoft.
Cloud computing is undeniably a threat to the monetization of open source software, but it is also an opportunity. Be quick or be dead.
Comments (16) Categories: Licensing,Linux,Software
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Matt, I usually agree with somewhere north of 90% of what you write, but not this time. I started to write a comment, but it ended-up becoming a standalone post here: http://scaledb.blogspot.com/2009/11/who-owns-customer-in-cloud.html
No problem Mike, the point about who is seen to “own” the customer relationship is a good one. I would hope that the ability to pick and choose between cloud services to meet the needs of different applications will discourage companies from thinking of themselves as “a Microsoft company”, “an Amazon company” or “a Google company”. But you are probably right.
Thanks for the great reference post..
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[...] Open source and the cloud – the quick and the dead And if you’re wondering why a cloud provider would bother working with an open source specialist vendor, rather than just taking their code, consider this: one of the cloud providers mentioned in this post pays for enterprise Linux support subscriptions rather than using a community Linux or supporting its Linux servers internally. And it isn’t Microsoft. [...]
[...] believe that cloud computing provides an opportunity for open source specialists, but agree that cloud [...]
[...] Clearly there is a threat to open source vendors from cloud-based services. Had Sun launched MySQL-as-a-service on EC2 it could have grabbed the market share that AWS will now grab with RDS. I’m not sure why Sun failed to do this, incidentally. FathomDB did it, although it lacked the market presence to prevent AWS stealing the limelight. I would argue that Sun/MySQL could have done so. [...]
I read Matt Aslett’s original blog, and then the addendum he had to post on 11/23 because he left out the important AGPL alternative.
The AGPL plugs the GPL loophole that allows companies to provide services to third parties using *proprietary unpublished modifications to open source software*.
I agree with Matt that the AGPL (or even OSL 3.0 that I wrote and prefer to the AGPL) doesn’t solve all the problems he identified in his first post. His second headline calls the main problem “the Revenue Dilemma”, which is as fair as you can be in identifying any commercial company’s problems using copyright and contract law alone to protect a revenue stream. Age old problem you’re talking about, Matt. It may be news to Matt, but it isn’t news to those of us who have been helping open source and proprietary companies deliver profitable solutions for over a decade now. The revenue dilemma can only be solved with excellent products and services delivered with expertise.
I believe that the AGPL and OSL 3.0 both offer a solution to a type of free-rider problem, such as Google’s use of improved open source GPL and other code that is never shared with its competitors and customers. I have no problem in principle with that model, except that I believe that Google (and its ilk) ought to pay for that privilege to use free software for profit. The AGPL and OSL 3.0 plug that loophole. Even that is not necessarily enforceable strictly, because software can be run in lots of functional ways without invoking copyright infringement at all. And big companies like Google will continue to refuse AGPL and OSL 3.0 software altogether because their business choice is NOT to share.
Isn’t the notion of “privilege of subscribing for a fee” a fundamental basis for any open source company’s success? So if some customers (such as Google) refuse software under a strict license like the AGPL or OSL 3.0, then your company should offer them a commercial license for a fee. That goes a long way toward solving the revenue dilemma. Your customers will understand.
/Larry
Disclosure: I am a member of the Jaspersoft Advisory Board and this comment was written originally for them. I post it here with their approval.
Lawrence Rosen
Rosenlaw & Einschlag, a technology law firm (www.rosenlaw.com)
3001 King Ranch Road, Ukiah, CA 95482
Office: 707-485-1242 Cell: 707-478-8932
Apache Software Foundation, member and counsel (www.apache.org)
Open Web Foundation, board member (www.openwebfoundation.org)
Stanford University, Instructor in Law
Author, Open Source Licensing: Software Freedom and Intellectual Property Law (Prentice Hall 2004)
Hi Larry,
Many thanks for the comment on the two posts. As you say, in many ways there is nothing new here. The revenue dilemma isn’t news to me, but I wrote about it to draw attention to what I see as a common misunder5standing about the Affero GPL: that is prevents the use of code in cloud environments.
I agree there is much more to this than I covered in either of these two posts and I have received some very interesting feedback from very knowledgeable people (both here and via email) which will will include in a more formal analysis of the situation in 2010.
Thanks
Matt
[...] [Source] [...]
SplendidCRM is also available for Azure. But as a native C# .NET application, you might be able to leverage SplendidCRM to get a free Azure account when you signup for Microsoft BizSpark.
[...] for open source and the industry going forward? Matt has covered how cloud computing can be both complimentary and competitive for open source software. I believe this question of ‘open enough’ represents a [...]