Yrtsudni Erawtfos

“Yrtsudni erawtfos” is “software industry” spelled backwards. This ridiculous word is the image that popped into my head when I reviewed Red Hat's exchange concept. According to what I have read, Red Hat intends to sell and support third party, open source business applications. In my mind, this is akin to Emerson Electric announcing that they intend to sell and service Whirlpool washing machines, dryers, and refrigerators. Why would a consumer buy a Whirlpool appliance from a manufacturer of appliance motors?

I understand the importance of the motor to the appliance function, and it is my impression that Emerson engineers motors that are quiet, energy efficient, and reliable. The only reason I can fathom for someone wanting to purchase the Whirlpool appliance from Emerson is because their prior experience with appliances leads them to believe the motor is going to be noisy, inefficient, and prone to breakdowns. And by God they want Emerson on the hook to be responsive when the inevitable breakdown occurs.

If Red Hat is truthful when they say that RHX is what their customers have asked them to deliver, it is a sad indictment of the software industry in general and of the operating system category in particular. Have customers been so conditioned to expect technical breakdowns in system software that they now want the OS vendor to be the primary point of contact for application support? I think it is likely that this is the software buyer condition, but I believe Red Hat's proposal of “more, better technical support” is the wrong answer.

I believe it is time to set the software industry straight. The operating system and related system software should not be the center of attention for software customers. Customers should have higher expectations for things to work correctly WITHOUT “more, better technical support.” I doubt Marc Benioff is sitting around today asking himself:

“Gee, I wonder if I got it right? Maybe what customers really want is for Red Hat and Oracle to sell and support my application products. After all, they do provide me with two very important pieces of the salesforce.com infrastructure? When things go wrong, the customer can call them instead of calling me. Maybe I should try that model.”

No. Marc is right when he says customers should not be exposed to the hassles of software infrastructure. SaaS and software appliances are both better answers to the software dilemma than Red Hat's proposal for “more, better technical support.” Customers don't want more support. They want software that provides application value without hassles. The perfect software product is one that requires an absolute minimum of technical support, and now is the time for application vendors to step up to that challenge.

Black Box Computing

I remember reading about Sun's Black Box project a few months back and scratching my head and wondering “Why would someone want a tractor trailer load of proprietary hardware with an air conditioner attached?” With the emergence of Amazon's EC2and S3 services, the growing pervasiveness and promise of virtualization, and Sun's further speculation that the world will only need 4 – 5 computers, I think I am beginning to understand why Sun wants to be synonymous with black box computing.

In the future, what is in the box (i.e. the hardware and its OS) will be irrelevant because your applications will not be defined by the systems that they run atop (as they are today). Applications will be defined as software appliances, and they will run atop the black box that offers the best service level/price performance ratio at that particular point in time. The best service level could indeed be influenced by proximity to the point of consumption (latency), security of output (network access characteristics), performance capacity (throughput per unit of time), or price capacity (throughput per $). Applications will be completely portable due to virtualization and software appliance technology. Compare the promise of such a future with an anecdote regarding the burden of our past experience.

Early in my tenure as the leader of Red Hat's enterprise sales effort, I once asked a large enterprise customer how they defined the systems to be deployed to support a given application. The answer that came back in an absolute deadpan was:

“If it is to be deployed in less than 6 months, we look under the developers desk to see what he is running, and we go buy as many of that exact system as meets the projected application requirement.”

I bet there is still quite a lot “developer system cloning” by procurement and IT staff going on today. I also bet that there won't be much of it happening a few years from now because the system that runs the application will be a black box, and developers will define their applications, sans hardware, as software appliances.

Licensing Hullabaloo

I love using the word “hullabaloo.” I don't get to use it often, but it is a great word to describe the cacophony of voices currently debating virtualization licensing practices.

It began with a New York Times article by Steve Lohr in which he described the competitive challenge that virtualization (and VMware) poses to Microsoft's operating system business. Then VMware posted a white-paper describing the licensing practices and their potential negative impact on customers. And Microsoft responded with a statement from Mike Neil, the General Manager of virtualization platforms for Microsoft. No doubt the analysts will begin weighing in on the matter soon. Why all the buzz? Why now? Because the impact of virtualization on the software industry promises to be similar to that of the Internet, and everyone wants to find a control point from which to steer their fortunes.

Virtualization is disruptive because it fundamentally changes the relationship between the hardware, the operating system that runs on the hardware, and the applications that run on the operating system. The hypervisor (virtualization platform) becomes the new layer on the hardware, and the operating system simply becomes an extension of the application as part of a software appliance. If the hypervisor becomes the “new” standard operating system, and any application can run on the hypervisor as a software appliance, it stands to reason that Microsoft and the other big operating system vendors such as Red Hat would be threatened by this change because they lose their point of control – how applications get attached to computers.

But what does all this have to do with licensing? Historically, there has been a strong correlation between the number of physical computers owned by a customer and the number of operating system licenses that a customer required. With virtualization, it is conceivable that every application is a software appliance with its own operating system attached. Moreover, these software appliances might come and go on the network based upon demand for the application. For example, a payroll application might run for a couple of days every month, but otherwise, it is not needed. With software appliances, the payroll software appliance would be deployed to a computer (atop the hypervisor) to run during the days before payday, and then be removed from the machine to make room for other applications to run more speedily during the rest of the month. Should the customer pay for a “full time” license to the operating system that is inside the payroll software appliance? Or should they have a “part time” license that more closely reflects the manner in which they use the payroll software appliance?

There is a lot at stake here for Microsoft. If the hypervisor becomes the “full time” operating system on the hardware that enables the “part time” software appliances to arrive and run as needed, Microsoft surely wants that hypervisor to be a Microsoft product, not one from VMware. If the operating system in the software appliances is simply an extension of an application, Microsoft may experience price erosion due to the minimalist nature of the operating system and the “part time” usage scenario.

In any case, Microsoft has a right to license their technology in any manner they see fit, so long as it does not break the law. If the licensing is not in the best interest of customers, customers will vote with their wallets and seek alternatives. Best of all for me, it gives an opportunity to use a great word like “hullabaloo” to describe the ruckus.