Cottage Services Spring Up Around Open-Source Projects

Founded by President Bart Decrem, a former spokesman for the Mozilla Foundation, MozSource is beta testing an e-mail service that provides installation, configuration and setup services as well as identifies and solves problems with those recently released products.

It's not the only boutique firm basing its business model on the nonprofit Mozilla open-source project. Last year, for example, a handful of Mozilla developers founded MozDev Group, focused exclusively on application development for the Mozilla platform.

Unlike more general open-source consulting firms, MozSource and MozDev Group represent a growing number of cottage services springing up around specific, open-source projects such as Mozilla, Linux, Apache and MySQL.

Mozilla Foundation President Mitchell Baker said the emergence of such companies signifies a maturing of the open-source industry and the evolution of the channel model for it.

"We're very much at the beginning of business models around open-source projects, but at the same time there are a number of projects that are mature enough for an ecosystem around [them]," said Baker, noting the last stage to success is spawning partner channels to deliver corporate-level integration and support. "The commercial identities might grow differently, but we are reaching the point where those ecosystems are developing."

Those ecosystems now include SpikeSource and SourceLabs, two other for-profit, open-source service companies that launched this fall. Based on a similar business model, each provides validated and certified open-source stacks, along with consulting, implementation and support services.

SpikeSource, Menlo Park, Calif., will work with Linux based on LAMP [Linux, Apache, MySQL and Perl, Python or PHP]. SpikeSource's venture capital pedigree reveals that even Silicon Valley sees commercial potential around the open-source world. Co-founded by former Oracle exec, Ray Lane and incubated by top VC firm Kleiner Perkins Caufield and Byers, where Lane is a general partner, SpikeSource is now headed by former Marimba CEO, Kim Polese. SpikeSource released an updated beta of its LAMP stack last week.

Bellevue, Wash.-based SourceLabs will also focus on providing services for the LAMP stack, but it plans to differentiate its service offerings from SpikeSource by focusing on performance and stress testing, the company said.

While commercial vendors IBM and Novell try to enlist their existing partners to push Linux and other open-source offerings, some developers and users remain wary of proprietary companies and potential vendor lock in, observers said. This gives boutiques such as MozSource and SpikeSource an advantage, said Philippe Lewicki, CEO of Los Angeles-based SQL Fusion. "Open-source organizations are getting very similar [to commercial software companies] in the way they work and are organized," said Lewicki, whose firm is certified on MySQL. "Apache was once a Web server project, and now it's becoming this big software provider. These foundations are getting so big they need the support of developers and those that can provide commercial support."

SQL Fusion builds Web sites and Web applications using Apache, MySQL, Sendmail, Samba and Linux. Lewicki has seen his business evolve to where he is winning more deals against solution providers for Microsoft and IBM. He said he now expects to rake in $400,000 in open-source revenue for the year.

But Lewicki also is cozying up to IBM and Novell because such commercial vendors can give ISVs and solution providers access to their sizable customer base that may want to migrate to Linux, MySQL and open-source projects.

LinuxForce, an open-source consultancy based in Upper Darby, Penn, also joined Novell's partner program recently, but isn't sold on it. The firm is evaluating the Novell Linux desktop as well as other open-source desktop projects optimized for the Debian Linux distribution.

"I'm a little uncomfortable hitching my wagon to any corporate vendor because they always go through the see saw of supporting the channel, and then not supporting the channel. I'd rather be independent of all that," said LinuxForce CEO Chris Fearnley, adding that he can affect the development of the Debian implementation of Linux more than he could a commercial product.

While Fearnley doesn't want to miss out on any business opportunities related to Novell Suse, the bulk of his business is based on developing and supporting ISPs' e-mail servers and Web servers based on open-source projects such as Sendmail, Samba and OpenSwan (IPSec).

"We're watching very closely, we don't want to miss the train," said Fearnley. "But so far, we haven't sold any [Novell]."

Even so, open-source organizations still don't understand how best to support and work with the channel, said Lewicki, of SQL Fusion. He advised Apache Foundation and other open-source projects to create certification programs and test partners before issuing certifications. He also suggested they build online directories listing ISVs and service partners that have achieved those certifications. And, said Lewicki, they should mimic Mozilla Foundation and KDE by providing better online marketing tools, such as brochures and fact sheets. "We have to do a lot of marketing work for [open-source organizations]," said Lewicki. "While the Apache site looks like a site for programmers, the the foundation is moving more into the realm of nonprogrammers. It would be better to send a customer to the Apache Web site the way we can to Mozilla, because [Mozilla] looks more [commercially] credible."

But the expected proliferation of partners means that, sooner or later, open-source foundations will have to learn how to support their channels. Zach Urlocker, vice president of marketing for MySQL, said channels are springing up to serve different types of open-source organizations. These include partners that focus on traditional open-source foundations such as Apache and the Open Source Development Labs, which guards over Linux. And there will be solution providers focused on second-generation, for-profit, open-source companies like MySQL and JBoss.

Still, Gartner Group Vice President George Weiss said these kind of service boutiques may find limited sales and revenue opportunities because of the licensing and development models of open-source projects--and because they're supporting software that's essentially free.

"Open-source software communities are not covering the broadening market opportunities emerging from these projects and enabling such service suppliers," said Weiss.

Even so, there's no doubt that boutique shops will join the growing ranks of open-source consulting firms vying for a bigger piece of the services market.

According to a study issued by IDC last week, the overall Linux market for servers, PCs and packaged software is expected to almost double between now and 2008, to $35.7 billion. The time is ripe for ISVs and service partners to jump in, the report advises, saying: "Linux is no longer a fringe player. Linux is mainstream."

As with many commercial vendors, open-source projects such as MySQL and JBoss will continue mixed direct and indirect model sales and services model. But they also recognize that they will have to partner with independent service firms--viewing these emerging cottage industries as a services ecosystem under construction. MySQL, for instance, launched its first channel program in April.

"It's vital for open-source organizations to have a rich ecosystem of solution providers and tools providers," said MySQL's Urlocker. "That way corporate customers and VARs can continue using technologies from the open-source world."