VARs Monitor Marriage Of Software Worlds

The merging of the once separate software worlds reflects mainstream acceptance of open-source software. But some observers and partners wonder if the two worlds are on a collision course.

IBM’s acquisition of Gluecode last year—its first purchase of an open-source firm, and the recently executed deals by Microsoft and Oracle, for example—raise a disturbing question: Are traditional software companies doing deals to serve customer interests or simply to eliminate or subjugate open-source rivals?

Historically, proprietary and open-source software worlds have been at odds. Vendors and customers that backed open-source platforms wanted to run open-source applications on operating systems such as Linux to break free of the licensing restrictions of proprietary platforms like Windows and Unix.

But as open-source offerings, such as JBoss and SugarCRM, gained popularity, proprietary software companies have rushed in to capitalize on—rather than fight—the new regime of open-source competitors.

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Vendors say increased cooperation will benefit mutual customers. At the Open Source Business Conference West in San Francisco in February, Microsoft and SugarCRM unveiled plans to enhance interoperability between Microsoft Windows Server and the open-source CRM vendor’s products.

Plans call for SugarCRM in early summer to deliver a distribution of its upcoming SugarSuite 4.5 platform optimized for key Windows Server services, including Active Directory, Internet Information Server and SQL Server, said John Roberts, CEO of Cupertino, Calif.-based SugarCRM. The distribution will be released under the Microsoft Community License, one of three licenses offered in Microsoft’s Shared Source initiative.

Microsoft and SugarCRM said the technical cooperation and Microsoft- sanctioned license give their mutual customers—those who wish to run open-source applications on Windows—additional comfort and benefit. They estimated that nearly 35 percent of current SugarCRM users run the software on Windows.

Still, some wonder why Microsoft, which has its own CRM, would voluntarily back a rival, particularly one that endorses an open-source model. SugarCRM’s Roberts claims that open source has leveled the playing field and neither Microsoft nor Oracle or IBM are in a position to co-opt their rivals.

“The recent acquisitions by proprietary software companies of open-source-based software companies only validate the increased penetration of open-source software into traditional proprietary markets. The long-standing lock-in enjoyed by proprietary vendors is coming to an end,” Roberts said. “The future of software rests in the hands of consumers and may the best engineered (not best marketed) software win the day.”

Observers said Oracle and IBM are doing these deals because they don’t want to be left behind. Database giant Oracle, for example, recently acquired Sleepycat Software, an open-source database maker. IBM, a pioneer in the open-source space, has formed partnerships with many open-source projects, notably Linux, and was instrumental in the development of Eclipse, the dominant open-source development platform.

But last year, the Armonk, N.Y., IT giant expanded its reach and role in the open-source world when it bought Gluecode, an open-source rival in the application server market. It was IBM’s first acquisition of an open-source company.

Microsoft, for its part, last year signed a partnership with open-source competitor JBoss that was similar in scope to the deal executed with SugarCRM recently. The JBoss alliance, designed to enhance the performance of JBoss’ open-source application Windows, is expected to bear fruit this year.

Many proprietary software makers are finding that working with open-source companies is easier than starting a successful open-source project, said Dave Gynn, application infrastructure practice manager at Optaros, an open-source consulting firm in Cambridge, Mass. Such deals likely will have material benefit for customers, but there are inherent dangers for users and solution providers, he said.

“The good news for enterprises is that in many cases, a deal could mean that a mature support organization will be available for the project,” Gynn said. “But some of these deals will be bad if the software company is simply buying out a potential competitor to get access to the user base or to kill off the project.”

The collision of proprietary and open source is “a blessing and a curse,” said Christopher Carter, president of CCI, a Milwaukee-based solution provider. “It’s a blessing that some great solutions are being noticed for what they are. Yet the curse is that now there is going to be a final decision-maker or company making the decision on the direction of the application, instead of the open-source community.”

Partners need to prepare for the new world. Though some service startups build their business models around the open-source paradigm, the prevalent use of proprietary applications on Linux and the increasing use of open-source applications on traditional platforms require that partners have skill sets to meet varying customer needs.

“The landscape is changing as a result of this level of IT convergence. It is a reality that IT solution providers need to be ready for,” said Tom Richer, CEO of DevLogics, N.Y. “Resisting or not adapting to the momentum is futile. Those solution providers that are agile enough to rapidly adapt to this convergence reality will come out on top.”

Still, partners need to stay apprised of such deals to assess the impact on their own strategies. For example, the Microsoft-SugarCRM alliance could impact partners servicing the Microsoft-CRM platform, and a potential Oracle acquisition of JBoss would ripple through its partner ecosystem.

“Consultancies that focus on open source [would] not be too greatly affected, since Oracle’s influence [would] probably only increase the reach of open-source software and solutions,” said Tom Janofsky, a J2EE architect at Tripod Technologies, a JBoss partner in Cherry Hill, N.J. “But I would be surprised if an acquisition was good news for JBoss partners. A merger [would] probably mean issues for JBoss partners incorporating into Oracle programs, issues of certification and channel. Over the long run, I would think that many smaller JBoss partners would lose out to existing Oracle partners.”

Partners must examine the motivations behind each transaction, but the collision of proprietary and open-source worlds doesn’t mean that traditional vendors can’t balance the needs of users and the channel, observers said.

“We find an issue with some of them, but as long as they know the role of the solution and the directions are out there and defined, we all can play nice in the same sandbox,” Gynn said.