How Open Source Stacks Up

Given the rapid advance of the open-software movement, that seemingly far-fetched scenario isn't as laughable as it once was. For just about every category of proprietary software you can think of, there is now an open-source version of that software under development, if not already on the market. Want a world-class database with all the bells and whistles for a fraction of what IBM or Oracle want? There's MySQL. How about a compelling alternative to Web-Sphere or WebLogic? Think JBoss.These are, obviously, the best-known examples of the second generation of open-source software companies following in the footsteps of Apache, Linux and other software initiatives, but there are far more alternatives than these.

Consider Zope, a content-management system downloaded tens of thousands of times per month free of charge, according to Zope CEO Rob Page. Some believe Zope and applications built with Zope are better than the commercial alternative they threaten to put out of business, Documentum. Zope is also often used to help build additional open-source applications. One such example is Plone, an open-source information-management system.

What began as a fledgling movement at the end of the past decade and later became known as building around the "LAMP stack" (LAMP is an acronym that stands for Linux, Apache, MySQL and PHP or Perl) has exploded to virtually all categories of software. That includes security, where SpamAssassin is battling spam and Symantec, too. Popular? Well, it has now become an Apache Software Foundation official project.

While advocates for open-source software are often painted as idealists motivated by something other than money, make no mistake: They are also motivated by ambition. Take JBoss founder and CEO Marc Fleury. He wants nothing less than market dominance. "We aim to be the No. 1 OEM in the middleware space. That includes beating IBM," he says.

Beyond LAMP

Not only are SpamAssassin and scores of other products ranging from PHP to Perl to Nuxeo CPS to Silva to Squishdot to LindowsOS to NetBeans IDE brought to market in a manner different than the norm, they are also being developed differently. Take Zope, for example. Unlike Microsoft's Longhorn, the next generation of the Windows operating system, Zope 3x is being trickled out bits and pieces at a time so users and developers alike can try out parts of the technology. Whereas Microsoft fans will have to wait for Longhorn to come out all at once, Zope users will be familiar with many of the benefits of Zope 3x as the full-fledged version of the software finally makes its debut. While it's important to note the differences in scale and complexity of the products, the distinction is relevant, nonetheless.

That is, in part, what has so many solution providers, ISVs and developers clamoring to use open source in more of their businesses. Consider the following gleaned from our 2004 Application Development survey: Today, more than half of those who develop or customize software for clients use open-source software at least part of the time. Almost one-quarter use open-source software in more than half of the projects they embark on, according to our study of more than 300 ISVs, solution providers and IT consultants who develop and/or customize software on some level.

What's interesting is where members of the solution-provider community are using open source today. According to our study, more than half of those solution providers who do some software-development work are using open-source software when doing database work. Nearly half, meanwhile, are using open-source software when working on projects involving operating systems and development tools, while more than one-third say they will use open source in projects involving application servers. The use of open source is so widespread that the percentage of solution providers who say they partner with MySQL nearly equals the percentage who say they partner with Oracle—23 percent to 25 percent, respectively. Red Hat, meanwhile, currently enjoys greater support among solution providers who develop software than does Novell. However, that could change given Novell's rapid embrace of various open-source technologies and the decision to offer core NetWare services, once the crown jewel of Novell's intellectual-property arsenal, to the open-source community.

To say that open-source software has had an impact on traditional software vendors is an understatement of immense proportions. Witness, for example, the recent moves that several tier-one vendors, such as CA, IBM, Novell and Sun, have taken to respond to ongoing and increasing threats to their proprietary, for-fee software license businesses. Many have begun taking steps to put what was once proprietary code into the open realm. CA, for example, recently outlined its strategy for dealing with open-source technology and the impact it was having on its business. After some soul-searching, the company decided to put its Ingres and KGEM products into the open-source realm, while simultaneously unveiling collaborations with JBoss and Zope. It also unveiled what it bills as the industry's first open-source management technology stack. Sam Greenblatt, senior vice president and chief architect for CA's Linux Technology Group, says his company is among the many ISVs that are now pursuing a hybrid strategy that blends both proprietary and open-source software to create new solutions for customers. He likens what is now happening in the software industry to what has already happened in the drug industry. "What we are doing with our software is exactly what SmithKline did with Avandia," he says. "We are taking the best intellectual property available and merging it with our innovations to create new solutions."

Plone, too, is pursuing a hybrid strategy. Paris-based Plone International, which is responsible for the ongoing development of the product, offers both a commercial license and a general public license (GPL) for Plone. The same is true for MySQL; it, too, has a dual-licensing scheme that its founders insist allows it to faithfully live up to the tenets and philosophies of the open-source community, but also provides a profitable business model that will ensure the viability of the software product. Stata Labs is doing the same. Its SAproxy Pro is actually built on top of SpamAssassin. According to Stata Labs, it took the best open-source antispam product in use on corporate networks "and made it so anyone could use it to free themselves from the tyranny of spam."

Not everyone, however, sees this as good for software. Darl McBride, the oft-maligned CEO of SCO, which is suing IBM over alleged intellectual-property transgressions involving Linux, expects a backlash against open source as soon as more proprietary software companies start to see what can happen when open-source encroaches on more traditional companies. He claims that the runaway adoption of Linux forced him to take legal action to save his company. And he expects others to do so as well.

"I do believe if Oracle gets chased down on its core database product, it will fight even harder than we are," McBride says. "Microsoft obviously has a core set of products. Even IBM [has them]. If some of these [open-source] database tools start chasing down its Informix or DB2 software, then what? It is interesting to me in the case of IBM that it embraces Linux, but then fights back on [other open-source] initiatives."

Money And Progress

Until legal concerns catch up with them, open-source companies continue to build out their business and revenue streams. Most continue to struggle to make serious money. Two companies, however, stand out: MySQL and JBoss. In addition to a healthy, growing partner ecosystem, MySQL generates revenue in three ways: through online support and subscription services sold via MySQL.com, through sales of commercial licenses sold to customers and developers and from what amounts to royalties from value-added partners. JBoss, meanwhile, is backed by well-known VCs with a track record of taking companies public and/or finding them larger suitors with deep pockets, such as Matrix Partners and Accel Partners.

JBoss' Fleury says JBoss and MySQL are "second-generation, open-source companies." By that, he means they are more than mere "amateur open-source" organizations. "In almost every category [of software], there is open source. But a project needs a brand and business," Fleury notes. In contrast, most open-source projects have 0 to 1 percent activity or downloads.

"There is this myth about these amorphous communities that through love and passion somehow create these groundbreaking products. I agree that there's no free lunch," he says, pointing out that 20 or so people do the bulk of work around the core Linux OS software kernel, not millions. The same, he adds, is true for MySQL. But that does not mean these companies aren't attracting millions. That's why Fleury is working quickly to build out his partner framework in the United States the way he has in Europe. JBoss counts 50 partners in its JBoss Partner Network, and scores are lining up.

Fleury has clear ambitions about what the next generation of open-source companies can achieve, following in the footsteps of Red Hat and a few others. In contrast, Linux is still largely controlled by its founder, Linus Torvalds, who never profited from it the way the next generation of open-source entrepreneurs hopes to. Likewise, Apache, perhaps the world's most successful open-source project, remains under the control of the rather benign Apache Software Foundation, which is a not-for-profit corporation. The foundation's software runs nearly 70 percent of Web servers, according to Netcraft.

Fleury and others can only dream of hitting those kind of numbers. But as they continue to build out their ecosystems, those dreams are becoming reality.