Monday, May 29, 2006

Open Source with few Open Benefits

Several months ago I was attending a conference on open source when a senior executive from IBM who was participating on a panel declared:

"Approximately 0% or our customers that use Linux ever modify any source code."

This statement is probably a bit of a commentary on IBM's customer base (they are IBM customers because IBM tends to serve companies that want IBM to do everything for them), but I think it is also a commentary on the current status of commercial open source software products. For as much as open source has shocked the software industry, the software market is essentially the same as before open source, but with a slight change in the players on the sell side of the equation. The open source companies are using open source as a signal to the market that their software is low cost (no pricing leverage through proprietary rights) and high quality (anyone can inspect the code), but they are not signaling to the market that open source is a way for the customer to create the unique innovations that matter to the customer. Generally speaking, commercial open source software is still "one size fits all" and de facto proprietary. Let's take the example of a couple of poster children in the open source space - Red Hat, JBoss (now Red Hat), and MySQL.

Red Hat is the great citizen of open source. The amount of R&D spending that Red Hat pours into Linux and other related projects to which it exercises no rights of ownership is extraordinary. However, if you are a Red Hat customer and you want commercial support for some small tweak to Red Hat Enterprise Linux, forget about it (unless of course you are one of a handful of $million plus annual customers, then the policy is similar to gays in the military - "don't ask, don't tell").

Then there is JBoss, "the professional open source company." When I first met Marc, he took great pride in explaining to me that the only contributors to JBoss products were the JBoss employees, which put JBoss a commercial cut-above most open source companies who rely on developers not on the payroll for large portions of the code. I never really understood why JBoss was open source. If you are not building a community of developers to create leverage in R&D, why not just give away the binaries and sell the product for a low price? Also, the tagline "professional open source" implies by contrast that every other company in open source is an amateur hack (which Marc supported with his frequent attacks on other open source projects and companies, especially Red Hat).

As for MySQL, I was on a panel with Marten Mickos when Robert Leftkowitz stood up in the audience with a red clown nose on his face (which he also sported during a contract negotiation with Red Hat while working for Merrill Lynch) and asked about commercial support for "bozos that want to modify the code." Marten responded, cleverly, "we have a special bozo contract for those customers." Again, if you want to be a bozo and modify the code, we will treat you like a bozo in our commercial relationship. Perhaps Marten was just being clever for the panel, but generally speaking open source software tracks very closely to proprietary software as it relates to business model assumptions.

I mean no disrespect to the commercial success of any of these companies, but they have really changed very little about the software industry (except perhaps the pricing expectations of the customers) through their success. There is so much more work that needs to be done to make software truly "soft" such that it can literally be molded to the requirements of each customer. Current software business models are still in a phase of maturity that is reminiscent of Henry Ford's commentary about customers that wanted colorful autos, "You can have any color you like so long as it is black." Open source is a great step towards "mass customization" for software, but there is still much more work to be done before the industry can truly claim that a customer centric transformation has been achieved.


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