If You're Looking For The Open Source Business Model, You're Looking For The Wrong Thing

from the that's-backwards dept

Every so often we see a similar article to the one penned recently by Ashlee Vance in the NY Times, bemoaning the lack of "open source business model" success stories. Now, Vance is a top notch reporter and does great work for the NY Times (as he did for The Register before), but these kinds of articles seem to miss the point. They go looking for "open source" company success stories, and find that most open source software companies don't end up doing very well, and the few that do okay end up selling out to other companies (MySQL, XenSource, SpringSource) and conclude that, outside of perhaps RedHat, "open source" isn't a very good business. But that misses the point. Open source software, by itself, shouldn't be much of a business. Just as music isn't much of a business by itself, but it can be a huge component of a larger business, open source software is part of what helps many other businesses.

So, while Vance dismisses the fact that companies like Google and IBM rely tremendously on using open source software to be the foundation of their multi-billion dollar businesses, it's time to recognize that those are open source business models. Just as we talk about how the new music ecosystem involves using music to make other things much more valuable, the "open source business model" is using open source software to make other things much more valuable. The companies that haven't gotten very far trying to sell open source software are in that spot because they don't understand open source business models themselves, and seem to think that the focus should remain on selling software, rather than using the software to make other things more valuable. While Vance dismisses companies like Google and IBM using open source software as "pawns," it's time to recognize that that is the most reasonable way to build a business on open source work. And there's nothing wrong with that at all. It's helping build tremendous businesses that have a huge impact on the world economy.

Filed Under: business models, open source, services, software
Companies: google, ibm, mysql, red hat

What Sun Should Be Doing With MySQL

from the good-advice dept

Earlier this year, Sun scooped up MySQL for a cool $1 billion. However, while Sun has been somewhat friendly towards open source software, there were plenty of concerns about what the company planned to do with MySQL. Some of those fears are now being realized. After first disappearing some of MySQL's public statements on the evilness of software patents, Sun caused quite a bit of controversy with a plan to close source certain new features in an attempt to push people to upgrade to a premium, paid version of the software. While that's certainly one strategy, it could be a dangerous one, ticking off many MySQL users who will go searching for alternatives.

So, what could Sun do with MySQL to help build a bigger and better business that doesn't involve locking up any software? The blog Milking The Gnu has a very interesting suggestion that makes a lot of sense (and certainly fits in directly with the economics we discuss around here). The idea is not to worry about locking up the software, but to turn MySQL into a cloud computing web-platform. The reasoning makes a tremendous amount of sense (much more than Sun's current strategy). Basically, on the low end, you have folks who will never pay for a premium version of MySQL anyway. At the high end, most of those companies (if pushed) will probably lean towards Oracle or IBM. But in the middle-tier there's a real opportunity -- not to be a database software company, but to build that all important web platform we've been discussing.

Already, Amazon and Google are trying to build that platform, with Amazon seeing a fair bit of success (and Google just starting). Sun has promoted the concept of cloud computing for years, so why not flip things around and make MySQL the database part of a cloud computing offering. With so many folks already comfortable with MySQL, it will be much easier for many of them to embrace this offering, rather than having to figure out the details of Amazon's SimpleDB or Google's AppEngine/BigTable setup. Then, the more people you get to adopt the free open source version of MySQL, the more likely they are to make use of Sun's cloud computing offering over the alternatives. And, then, Sun can charge for the use of cloud computing resources (scarce resources) while knowing that the infinite nature of MySQL promotes that scarce good. Given that Sun's been such a promoter of cloud computing for so long, you would think this was a no-brainer. But it's latest actions with MySQL suggest it may be going in a different direction, and that's unfortunate. Update: Marten Mickos of MySQL/Sun responds in the comments, and Glyn Moody points us to an interview he recently conducted with Mickos suggesting that Mickos is thinking along similar lines about cloud computing.

Filed Under: cloud computing, databases, mysql, web platform
Companies: mysql, sun

Is Sun Backtracking On Software Patents?

from the hopefully-not dept

MySQL's execs have always been outspoken critics of software patents. Back in 2004, we wrote about the company CEO's well-reasoned article about how software patents had become the nuclear stockpiling of the modern era. Companies were forced to patent everything just to have enough ammo to make sure others didn't sue them for patent infringement, and the end result was huge legal bills and wasted money that wasn't going towards innovation at all. Since then, the company has remained vehemently against software patents. However, now that Sun has purchased MySQL, the company is apparently being pushed to cut back on its anti-software patent stance. Someone who prefers to remain anonymous sent in some blog posts highlighting how Sun has removed MySQL's anti-software patent page. To be fair, among larger companies, Sun has certainly shown a much better understanding of how patents can be anti-innovation as well as how the patent system is often abused. But, at the same time, it also has a bunch of patents and has demonstrated in quite explicit fashion just how those patent nuclear wars work. So, of companies out there, Sun seems less bad concerning software patents than other firms. But it's still rather disappointing to see it erase MySQL's excellent public stance against software patents from the web -- even if it did make a silly April Fool's joke about open source software this week.

Filed Under: open source, software patents
Companies: mysql, sun

The Enterprise Landgrab Continues: Oracle Buys BEA For $8.5B, Sun Buys MySql for $1B

from the buying-in-the-air dept

Something must be in the air today, as two big acquisitions were announced this morning. First, Oracle announced that it will fork over $8.5 billion for middleware maker, BEA. BEA has been on the radar since last October, when BEA rejected Oracle's unsolicited $6.7 billion offer. Carl Icahn, BEA's largest shareholder, had initially agreed with BEA's counter offer of $21 per share, but then later started pushing publicly for the sale. Oracle held fast to its offer of $17 per share, so it's surprising to see that they were able to agree on $19.375 per share, especially when there were seemingly no other bidders. These acquisitions continue an overall trend of consolidation in the enterprise software market, kicked off by Oracle's 2004 acquisition of PeopleSoft. Since then, Oracle has spent about $110 billion in its acquisition of about 30 companies. Oracle is in a battle with German software giant, SAP, who is also knee deep in the land grab with its recently successful $6.7 billion acquisition for Business Objects. Meanwhile, Sun will spend $1 billion for open source database maker, MySql, making a strong play in the $15 billion enterprise database market. This deal makes sense for Sun, who has been building up its stable of open source products. That said, when will the speculation begin for an Oracle-Sun merger? Both hate Microsoft deeply, and both have been trying to expand beyond their core markets. And, MySql even rejected Oracle's acquisition offer back in 2006. At some point, someone's going to think it makes sense for the two to combine.

Filed Under: acquisitions
Companies: bea, mysql, oracle, sun