Updates from December, 2006 Toggle Comment Threads | Keyboard Shortcuts

  • Roberto Galoppini 5:59 pm on December 14, 2006 Permalink | Reply  

    Novell: “Your Linux is ready” road show 

    Today I stepped by the roman chapter of Novel’s “Your Linux is ready” tour. In the past years I went to many Novell’s roadshows, to be honest most of the times no many people were attending usually. But this time I was impressed by the number of attendees, there were no spare seats in the whole room.

    Questions posed were quite technical, people were asking nuts and bolts about virtualization and clustering capabilities, but few were interested in document format compatibility too.

    My guess? People are not struggling to get a Linux Desktop – yes, Novell’s CTO Jeff Jaffe is too optimistic – but it’s clear that the Microsoft-Novell agreement got public interest. People I met today were professionals, not just curious.

    Did they all read the Penn, Schoen & Berland Associates survey?

     
  • Roberto Galoppini 9:25 am on December 14, 2006 Permalink | Reply  

    GNU Economy: the franchising model 

    Getting back to customer and vendor perspectives we might better describe the OSS market in term of offer and demand, as shortly described in the table below.

    Customer Perspective
    The Customer demands for ..a possible fine answer
    Buyable business services fixed-time/fixed-price services
    Multiple vendor support Retention by SLA
    Enterprise Level Support “Pyramidal” approach
    Technological certainty Continuous support
    Indemnification IP Coverage
    Hardware/Software compliance Stack Assurance
    Vendor Perspective
    The Vendor wants The impact
    Partiecipating to tech clubs Driving standards
    Savings by efficiency Community building
    Branding OS Alliances
    Tracking production Forging inside
    Appropriating returns Franchising

    Large to Medium customers look for enterprise level vendors, but vendors independently of their dimension can not offer personalization or integration of hundreds of OSS. A pyramidal approach (mediation) is needed to deliver value added services on a large number of platforms/programs.

    Uncertainty, due to scarce integration of OSS stacks, might be overrun by dependability and benchmarking services, in order to assure that the whole software environment works properly and performs.

    Hardware and software compatibility is an issue too.

    Mitigating Intellectual Property risks, in terms of copyright or patent infringements, might be interesting for large enterprise, since they might be sued as happened in the SCO case.

    Vendors having symbiotic approach to OS Communities, know that sharing a standard, in terms of formats, protocols or a code base, requires active participation to body standard or to product roadmap definition: thread off between costs and benefits it’s strongly related to market positioning and other environmental considerations.

    Reducing software production costs is feasible if there are large amounts of volunteers and/or if the Author has a well-defined partnership program to motivate participation.

    Branding OSS is costly and is not clear how to appropriate returns from marketing commons, therefore alliances sounds the most effective way to brand OS products sharing costs and benefits.

    Tracking software production is feasible if and only if the vendor is forging within its organisation, again vendor need to be the software’s author.

    There are just two ways to make money from OSS, named “best code here” and “best knowledge here” approaches, but none of them scale very well, unless you know how:

    • to become the market leader;
      .
    • to save money through cooperative software development.

    But appropriating returns is always critical and Franchising might be a good idea, at least for one of you..

     
  • Roberto Galoppini 8:30 am on December 13, 2006 Permalink | Reply  

    GNU Economy: Customer and Vendor perspectives 

    The idea of using Open Source software is getting more and more realistic everyday; independent consultants have conducted extensive research and concluded that for quite a few IT solutions Open Source offers a worthwhile alternative.

    Customer and Vendor perspectives toward OSS are different, and the following table represent them in short, below an analysis of them and some thoughts about how to make business out of it.

    Customer Perspective
    Make a wish.. ..granted?
    Savings on licensing Now. And than?
    Avoiding vendors’ lock-in GRAM/GRAS/OSMM/BRR
    Broad support Mostly SMBs
    Indemnification IP Uncertainty
    Warranty “as is”
    Vendor Perspective
    Make a wish.. ..granted?
    Sharing standards/innovation Participation costs
    Savings on sw production Symbiotic costs
    Brand Recognition Partnership costs
    High quality Production tracking costs
    Skill availability Mediation costs

    Customers expect to save money, but they’re wondering about what’s next. Despite cost of exit might be lower with OSS, since rarely data are stored in proprietary formats within open source solution, it’s true that CIOs always wonder about the future.

    Avoiding lock-in is told to be another important issue, but choosing the “right” platform, that means solutions broadly supported and generally recognized as mature (see GRAM, OSMM and BRR), it’s a must.

    Large to medium companies want to cope with large to medium vendors, but quite often OSS is deployed mostly by SMBs.

    Some companies can afford indemnification costs, and are willing to in order to reduce uncertainty.

    Last but not least some companies desire a form of warranties, and can afford to pay for this.

    About vendors perspectives as shown with the linux-embedded case, sharing standards or participating to sequential innovation is a nice to have, and it implies costs of membership, effort and so on.

    Reducing production costs is welcome, but it requires a symbiotic approach and, as commercial Linux distribution companies know, it’s not for free.

    Vendors like to work with strong brands, since makes easier to commercialize their solutions, but very few OSS have a (unique) corporate actor willing to spend money to make it known.

    About tracking software production only community driven by a corporate or a foundation can manage to do it, and making it compulsory, besides low bug density measured in famous OS, project traceability is a difficult task.

    Integration of OSS stack might be tricky, since a vendor has a limited number of workers and therefore of expertise, mediation to other OS project might be desirable.

    Coming to the Italian market, an essay produced by IDC this spring show how the majority of companies interviewed in a mixed champion made of 150 firms, the most wanted services are the basic ones (“assistenza” aka support , “installazione” aka installation and “manutenzione” aka maintenance).The worldwide situation is quite similar, as shown by other studies conducted by Forrester, where CIO of large companies answering the question “Where do you run Linux today” reported 44% within web/e-mail thier.

    The IDC essay investigated also who is on duty for analysis of the migration:

    • consulting firm are chosen by 38% of interviewed;
      .
    • 59% of them did it by themselves.

    Implementation is deployed by vendors for 39% of interviewed, where 66% did it with internal personnel.

    There is clearly space for ICT outsourcing in this area.

     
  • Roberto Galoppini 8:43 pm on December 9, 2006 Permalink | Reply  

    Business development: more about Alfresco 

    I wrote a post about Alfresco two days ago, and today I read a Matt Asay‘s post with some data from Alfresco, and I wouldn’t have been able to pose better questions!

    Lead Generation. Alfresco’s website (Downloads/product trials) drives 72% of our leads, and documentation drives another 21%.
    [..]PR, which leads to visits to our website and subsequent downloads, is the biggest driver for our business. Lesson? Invest in great PR and ensure your web presence is well-designed to receive the visitors.

    So it’s true, Enterprise Content Management System is a promising application area for commercial open source. And yes, PR is vital. After all, didn’t Alfresco hire Matt on purpose?

    “Free” is good business. We only recently started measuring unpaid implementations of Alfresco, and have over 6,000 “Community” implementations.

    May be Alfresco has a 1/1000 ratio of customers/users, just like Mysql? I bet the ratio would be better in the very next future.

    Btw, because our business is essentially support (as this is the primary ongoing value we provide to a customer, just like any software company), we’ve found it imperative to have support inextricably connected with engineering.

    Well, support is essential, we know, but when it’s your core business it’s the most important critical success factor. Thanks Matt for such information!

     
  • Roberto Galoppini 6:06 pm on December 8, 2006 Permalink | Reply  

    Microsoft-Novell: adaption to customers’ need or nefarious deal? 

    The debate didn’t come to an end yet.

    We all know from the Microsoft statement that

    Microsoft and Novell have agreed to disagree on whether certain open source offerings infringe Microsoft patents and whether certain Microsoft offerings infringe Novell patents.

    As from Novell’s Open letter to the community we learn that

    Our interest in signing this agreement was to secure interoperability and joint sales agreements, but Microsoft asked that we cooperate on patents as well [..]. In this agreement, Novell and Microsoft each promise not to sue the other’s customers for patent infringement. The intended effect of this agreement was to give our joint customers peace of mind [..].
    Since our announcement, some parties have spoken about this patent agreement in a damaging way, and with a perspective that we do not share.
    We disagree with the recent statements made by Microsoft on the topic of Linux and patents.

    On the 2nd of November, just few minutes later of the public announcement, I had a chance to comment the agreement with Microsoft’s people. From the very beginning I said that the patent thing would have been considered dangerous from the OS community.

    Microsoft and Novell lawyers did a very good job, as stated by Richard Stallman feedbacks, since thet respected the GPLv2 and, likely, the GPLv3 as well (see also my previous post GPLv3 ad personam). But they lacked of good communication, as shown clearly by their disagreements on agreement,and they had bad ideas, like offering a covenant for non commercial OS developers.
    I believe that the Intellectual Property frame was a must for Microsoft, but I’m interested in knowing the answers to the following questions (excerpt from a post of Novell’s Chief Marketing Officer):

    • What if we collaborated on innovation that made our customer’s more productive?
      .
    • What if we made Linux and Windows easier to deploy and manage?
      .
    • What if we collaborated on solutions that allowed our customer the choice and flexibility to deploy the technologies most appropriate for their task?
      .
    • What if we made interoperability between the worlds of open source and Microsoft more meaningful?
      .
    • What if we reduced the concern about our respective patents on the use of our solutions?
      .
    • What if we took the customer perspective?
      .
    • What if we used the basis of our competition to cooperate?
      .

    While waiting today I did read an interesting comment posted on Groklaw on the 5th of December, and I hope you will enjoy it.

     
  • Roberto Galoppini 11:33 am on December 7, 2006 Permalink | Reply  

    Business development: the Alfresco approach 

    Two weeks ago I attended John Powell’s speech, you might have a look at his presentation by the Italian SourceSense website. Alfresco is a company founded by by John Newton, co-founder of Documentum and John Powell, formerly from Business Objects and its investors include leading investment firms as Accel Partners and Mayfield Fund. Alfresco tagline “the leading open source alternative for enterprise content management” summarize Alfresco’s strategy: forging inside and delivering VAS services and maintenance.

    Alfresco reduced drammatically marketing costs because there is no need for evangelic sale since potential users are already users.

    It’s true, commercial off-the-shelf (COTS) open source software is found by users, but as seen with MySql is not trivial to turn them into customers. Luckily Enterprise Content Management is more complex than DBMS, and customers need subscription based support and value added services, therefore VC are happy to invest.

    About marketing Powell reported proprietary vendors expenditure for marketing and sales about 76% of new license revenues, and he added that

    buying proprietary software you’re paying for a sales guy.

    But cutting cost of sales of two or four times sounds a bit difficult, and I’m looking forward to read Alfresco’s 2006 annual report to figure it out.

    About production costs Powell said Alfresco benefits from community involvment, and I think it would be interesting to know more about it, may be getting analyzed by FLOSSMETRICS, a European funded project analysing OS software projects to collect complete information about the development process, its productivity and the quality of its results.
    Alfresco’s story it’s really interesting, here some reasons:

    • they did choose a promising market (estimated 3.9b$ where RDMBS is about 10b$);
      .
    • they have choosen mature OSS infrastructure components;
      .
    • they hired developers from Documentum and Interwoven teams;
      .
    • they are running a very strong and wide partnership program;
      .
    • they understood the importance of benchmarking and stack-assurance;
      .
    • they pay attention to standards, ODF included;
      .
    • they do agree that user interface matters.
      .

    Matt Asay, Alfresco VP Business Development, has an interesting blog, and I keep it in my blogroll.

     
  • Roberto Galoppini 8:02 pm on December 4, 2006 Permalink | Reply  

    Business model: appropriating returns from Commons 

    Boundaries between public goods and private investments are blurred in the Open Source Software industry. A number of studies published over the last years tried to address the issue from a theoretical and an analytical point of view, nevertheless none of them return the key to bypass the storm of problems caused by a tactical approach.

    An Italian research based upon 146 firms shown that where OS firms preach participation, in general such positive attitude to cooperation is seldom put into practice.
    A study conducted on the linux-embedded vertical market, shows how averagely 53% of code is revealed, showing how participation to a technological club done by virtual and informal R&D networks can have beneficial effects on their business.

    Nowadays quite few OS firms are doing very well Red Hat who recently acquired Jboss moving a step forward on the application level, is the first pure open-source success story to point to, being the only vendor publicly traded. The Swedish firm MySql makes open-source database software and is said to be closing in on $40 million in revenues this year, but it has a 1/1000 ratio of customers/users, showing how being the first mover is a must to get success.

    Meanwhile, meta-organizations like Object Web are federating vendors around enabling technology and its compliance with open standards, renewing middleware market who appears doomed to fail even more dramatically than other software markets. In the middleware development area a new rationale is emerging, targeting sustainable development of a “business ecosystem” where stakeholders could share beneficial middleware strategies, just like in the Linux-embedded example.

    Others choose to take advantage of the absence of a Corporate actor to develop new services, not based on code production but focused on well known open issues like:

    All those business models are possible because only few projects are held by a specific corporate actor who market its products, tracking the production process, developing partnership in order to let hardware or software vendors do benchmarking, delivering form of indemnification and/or warranty to customers, and last but not least working with under contract developers.

    Winner takes most, as usual, and such opportunities are bound to small oligarchies. Investments might be high to start form scratch such businesses, as seen with Canonical, struggling to be noticed in the distro arena. As a matter of fact, barriers are higher when everybody sells the “same” product, and it’s definitely not a sure bet.

     
  • Roberto Galoppini 7:26 pm on November 29, 2006 Permalink | Reply  

    Business development: the Covalent marketing approach 

    Last week at the Open Source Accademy event I attended Mark Brewer‘s (Covalent‘s CEO) speech. I learn more about Covalent’s business, mostly related to deliver commercial support for Apache, Axis, Geronimo and Tomcat.

    About open source adoption Brewer reported results from a Forrester Research survey, showing a strong interest of European firms, where about 40% of interviewed firms are already using it, mostly for Web server and Server Operative System areas (seen on another survey).

    Benefits of Open Source reported by Brewer regard lower acquisition costs, as stated by the latter survey, reporting an average of 72% of European firms interviewed claiming lower TCO and acquisition costs as the key advantages over proprietary software. Brewer reported that no license negotiation is required for acquiring OSS, but since corporate lawyers are not familiar with OS licenses they need to manage the risk of Open Source license. How? Buying legal services from specialized firms like Palamida or Black Duck, in order to identify potential legal liabilities.

    Getting back to advantages, Brewer highlighted how vendor independence turns into more freedom of choice, allowing firms to access source code and fix/enhance it by themselves, without involving the vendor. On the other hand he reported lack of knowledge and skills as risk factors in adopting OSS, adding that proprietary vendors deliver inconsistent support for OS solutions; limited support resources and uncertain OS project viability complete his picture. Mitigating such risks requires, as explained in his slide-show, work with appropriate vendors, hire or contract expertise for development, integration or deployment, choose commercial distribution of OS software to obtain indemnification and fully tested and certified solutions.

    I believe Fortune 500 Companies can follow his line, but in Europe, and especially in Italy, the market is made by SMEs. I doubt CIOs are willing to spend time and money to know which OS products are mature, then looking around searching for appropriate vendors, pay money to get legal advices and only then, eventually, get things done.

    Technorati Tags: Covalent, Commercial Open Source, Palamida, Blackduck

     
  • Roberto Galoppini 3:22 pm on November 28, 2006 Permalink | Reply  

    Community development: from gift culture to “stealing” hackers 

    Open Source firms relying upon a symbiotic approach try to co-develope with communities, and firm management usually is directly involved in community development:the symbiotic approach is mostly focused on identifying the realization of mutual benefits either for the firm and the community.
    A firm adopting the symbiotic approach might partecipate to a project contributing with software internally developed, or providing an infrastructure that facilitates collaboration and stimulating interaction.
    Community members have no formal connection to the firm and they disregard firm’s goals if they are not in line with those of the community, therefore the firm has to pay attention to keep volunteers working.

    Mark Shuttleworth has recently posted on his blog an invitation to OpenSuse developers to join the Ubuntu community, concluding that

    if you have an interest in being part of a vibrant community that cares about keeping free software widely available and protecting the rights of people to get it free of charge, free to modify, free of murky encumbrances and “undisclosed balance sheet liabilities”, then please do join us.

    Will OpenSuse developers join Ubuntu?
    As a matter of fact the relationship between communities and firms tend to deteriorate as the firm become more commercial oriented, making collaboration a very delicate and important issue, above all for companies whose business models are based on “weak” intellectual property asset.

     
  • Roberto Galoppini 12:58 pm on November 27, 2006 Permalink | Reply  

    Java&OpenOffice.org – Simon Phipps (part II) 

    The day I met Simon Phipps Sun organised a dinner and I had a chance to speak with him about Sun’s strategy about Open Source. I first asked if Sun was planning to create for Java a community council has the OpenOffice.org one. As a matter of fact as OpenOffice.org volunteer in almost four years the council was mostly useless, if not harmful, as for the splash screen case (see the Italian article). As accademic paper writer on voluntary Open Source organization of work I can say that the Community Council Proposal idea to require an unanimous consesus doesn’t make any sense: despite the will to make the community as democratic as possible, makes the council unable to take any real decision.

    Consensus Voting: To avoid disenfranchising any group represented by a Council member, all council votes will be by consensus of all nine voting members. (Community Council Proposal, comma V b)

    I was pleased by the fact Simon told me they are already working on it, things are going to change in the very next future, as stated by simple but effective actions like creating an email (ombudsman at sun.com) to solve problems that volunteers can’t fix opening issues.
    I want to give it a try seeing if we might eventually find a way to include the community-developed Italian dictionary and thesaurus in the Sun official OpenOffice.org builds (see the following issues 70182 and 65039).

    Getting back to my previous question to Simon about the double licensing business model, I told him that in Italy, and I guess everywhere but in Germany where the Sun German subsidiary has strong knowledge of OpenOffice.org, customers are willing to pay to get value added services but they can’t buy migration services (changed after Phipps comment, see below) from Sun.

    Simon said they’re going to sell global services on it, as they already do for Sun Solaris 10 (see Sun Solaris Service Plan), and I think that document migration and software distribution will be key success factors. On the other hand channel partnerships might be deeply affected by shifting to a global service approach, and this is an issue that need further considerations.
    About Java I was impressed by the speed Sun’s move it’s getting interest, starting from the amazing declaration of Richard Stallman (see his video), and Simon told me that he seeing much interest from many important and vibrant communities, like Ubuntu.

     
    • Simon Phipps 2:02 pm on November 27, 2006 Permalink

      Actually the support plans for OpenOffice.org are already live…

    • Rob 3:19 pm on November 27, 2006 Permalink

      Thanks Simon, any plan for the migration services as well?

    • Simon Phipps 8:28 pm on November 27, 2006 Permalink

      Nothing public at the moment.

    • Davide Dozza 10:35 pm on December 8, 2006 Permalink

      License issues are becoming very sensible for OOo especially for native-lang projects where linguistic tools (dictionaries, thesaurus and hyphenators) are central for having an effective localization products.
      Several issues have been raised about and the problem is always the GPL incompatibility, which does not allow the integration of GPL tools, which remains one of the preferred license of volunteer contributes.
      As such tools are usually text files, mere aggregation seems a possible way to overcome the problem and to allow the integration of such contributes.
      Unfortunately legal reviewing is taking too much time and native-lang project like italian one keeps the same problem. I hope this matter is discussed as sonn as possible.

      Some of these issues are: 71669
      70182
      70490
      21678
      65039

    • Roberto Galoppini 8:37 pm on December 10, 2006 Permalink

      I have already sent a reminder to ombudsman, no answer yet.
      Let’s see if Simon (reading this thread) might help us to speed up the process.

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