Andre started out his career at IBM where he spent 13 years. At Big Blue he was fast tracked through various positions in sales, marketing and R&D as part of their executive program. He then left for a turn around at Cognos (now owned by IBM). He’s been the President and COO of the world’s largest private software company, SAS Institute Inc. and has been the SVP of Marketing at Oracle. After working for some of the largest proprietary software companies, Andre now works primarily advising open source startups using his experience in order to help them better compete with some of his former employers. Though he keeps a relatively low profile in the open source community though he’s definitely a mover and a shaker.

The Counter-Intuitiveness of Open Source

In 2002, after joining the board of VA Linux (now SourceForge) Andre got exposed to the many thousands of open source projects on SourceForge. At first a lot of things in open source software were counter-intuitive to Andre. For example, how could volunteers and distributed developers outperform a dedicated development staff? For example, at SAS he had in excess of 1,000 developers housed on SAS campus, which felt like an extension of academia. With numerous accolades as one of the best places in America to work, the employee turnover at company was virtually non-existent. As a privately held company with a virtually unlimited budget there was no pressure to partake in the unnatural acts required of publicly traded companies to appease investors.

The problem with this was with very little fresh blood flowing in there was less innovation. Beyond that even though the developers within the company reviewed each other’s code there was a downside. If the guy in the next cube evaluates your work and dings it, he has to confront you every day at work, at your kids Little League practice, the company cafeteria, etc. This makes it less likely for someone to really challenge the product. In the OSS community while some developers are sleeping others on the other side of the globe is scrutinizing your code.

To illustrate his point Andre notes the phenomenon of the typewriter tough guy:

We are all recipients of flaming emails at least once in our life’s and typically that email comes from someone we never met or at least someone that isn’t standing in front of us.” The same thing happens in a worldwide open source code review. It drives programmers to write better code because of the public nature of OSS. On the other hand if you are a good programmer and you are willing to take criticism you are able to partake in a community that can offer genuine help in near limitless supply.

Open Source Software (OSS) is very democratic. Individuals can influence the direction of software. While many talk about collaborative software contributions are generally in the form of plug-ins and add-ons but collectively the large number of users give input on the direction of the core technology. This is a huge advantage over proprietary software development where asking existing customers about your product doesn’t really help because they already bought it. Plus they aren’t going to give you a beat down after a free dinner and a round of golf.

In short what Andre learned about open source was that:

• Code quality was better through a more transparent distributed development process.
• The cycle of innovation is accelerated by a relatively larger group of users with diverse needs (carrot) and the constant threat of being forked (stick).
• The barrier to deploy open source software is lower since there is typically no perpetual license up front, just an “optional” support contract.
• Full code availability makes it easier to integrate with other systems compared to that of proprietary software for which their respective vendors offer poorly documented APIs. Additionally, open source developers tend to adhere to open standards.

In late 2007 Goldman Sachs cut their estimates on many software companies. Their sentiment was consistent with the value being provided by many open source software companies.

Concurrent with our change in coverage view, we are reducing the estimates of most of our covered companies, focusing on pure-plays that could be harmed as customers seek to purchase ‘good enough’ substitutes from larger vendors, as well as vendors who sell ‘big ticket’ items that could be delayed in a slower spending environment,” Goldman Sachs analysts wrote in the report.

According to Boisvert they also noted that, publicly traded software companies are spending between 83% to 100% of new license revenues on sales & marketing activities. Customers not only pay for their own golf outings but all the outings of all other prospects that didn’t pan out.

What’s been a challenge for a lot of open source vendors in their sales process is that there is little room for free pre-sales support, there’s no free dinner at Morton’s steak house. The economics are different because there is no perpetual license for the vendor to recoup these sales and marketing expenses. Under the open source model, customers have come to realize that they need to pay for pre-sales activities such as “proof of concept pilots” and that golf outings are not included.

The new model typically starts with a customer/prospect downloading the software and then reviewing it on their schedule and not that of the vendor. Customers can check out the programs in detail and hear unbiased views by going on project forums as opposed to listening to a yapping sales guy shoving glossy sales brochures under your nose and making promises he knows are not likely to be kept.

Building Open Source Companies

Andre was anxious to put the lessons learned at VA software to use and in October 2004, he co-founded an open source business intelligence company , Pentaho. Since the company had no install base, they had the luxury of the creating the next generation Business Intelligence (BI) platform. This was a feat the “popriatary” industry leaders could have never achieved, as migration issues from massive legacy customer bases would have placed too many limitations on the product.

The Pentaho crew knew that having a vibrant community was key to their success and unlike many companies that labor over building communities over a long period of time, they acquired the IP rights and hired the key developers of three projects: Jfree Reports, Kettle, Mondrian. On their own they were all good pieces of software but combined into a BI platform, the sum was much greater than the parts. The communities had similar interests and they came together rather quickly offering even more synergy.
Andre’s appetite for open source didn’t stop at Pentaho, he was soon the first outside investor in Compiere. Compiere founder Jorg Janke, a former Oracle colleague, had spent two years building an ERP platform from scratch. Jorg understood the problem with the then current proprietary ERP systems which drove him to build the next generation ERP platform.

Andre shared that view with Jorg since as head of Oracle’s worldwide marketing function he remembers Larry Ellison would evaluate feature requests by saying, “If we had the features that this specific customer is asking for, how big would the check be?” Depending on the size of the check, Oracle would build out features which in many cases was only applicable to one customer. Being the marketing guy Andre would spin the features as designed for specific “vertical markets” but at the end of the day it was a feature used only by a single customer. Other customers ended up paying for the additional overhead to run this code (MIPS, storage, etc) and to add insult to injury, paid for it every year on their maintenance bill.

Jorg knew that every customer had a common need, financials. Jorg built a financials package that supported multi-currencies, multi-nationals, multi-divisions, etc. His data dictionary approach allowed customers to only generate the code the user needed. Unlike many open source projects there was not one outside code contributor and his partner Kathy Pink did all the QA and documentation. Janke could have released Compiere as proprietary software but after a long conversation with JBoss’ Marc Fleury, Jorg decided to release the code to the OSS community. In parallel Andre and Larry Augustin both then sitting on the board of VA Software saw the market opportunity for the software and subsequently helped fund the company.

While Compiere’s product was entirely built internally, Pentaho chose to combine both internally developed code and acquiring a handful of complimentary open source projects. This allowed Pentaho to deliver an end to end BI platform which includes things like ETL, Analytics, and reporting that formed. Both open source companies are the leaders in their respective spaces but they each took a very different approach in getting there.

Having been an investor and chairman in a pure applications company like Compiere, and a company that straddled application and infrastructure, like Pentaho, Boisvert, driven by curiosity and a desire to spread his investment across the software spectrum looked at systems management. He soon became an investor and the chairman of the board of an open source monitoring vendor, Zenoss.

Andre was intrigued by how much open source software was being used in larger enterprises, especially by the open source companies that he was associated with, therefore Andre joined the board of Palamida. Palamida is a company that helps mitigate IP risk in open source software. Being on the board of Palamida, Andre gained valuable insight into which applications are being used in the enterprise and the required attributes for OSS offerings to be adopted in the enterprise.

Playing Both Sides of the Fence

Boisvert is also frequently asked to speak to buy side analysts at large investment banks. Not to sell them open source stock, or at least anytime soon. He actually shows them how to hedge their bets on proprietary software companies who might be losing ground to open source challengers.

Similarly Andre still participates on the boards of proprietary software companies like UBmatrix Inc. the creators of XBRL (Extensible Business Reporting Language), Odessey Technologies Financials Inc. a Swiss-based leader in wealth management software and more recently joining as the chairman of the board of Infobright, a proprietary analytic data warehouse provider. However, one reason he’s attractive to these companies beyond his proprietary experience is to advise them on the potential use of open source software within their own respective software stack and therefore lowering their R&D costs.

Andre’s thoughts on open source can be summed up with this:

As the US and Europe have an economic slowdown, IT is the weapon of choice for improved efficiency. Open source is the needed ammunition which can be had at disruptive price points, not just incremental. Additionally, the economies of the BRIC [Brazil, Russia, India, China] are growing at a staggering rate and they have been raised on being cost conscience, a perfect play for open source. As such, this is the best time to be in the open source business.

photo credit: Brenda Annerl

[Disclosure: Mr. Boisvert is the Chairman of the Board at Zenoss where I am on the executive team]

Related posts

• No related posts.

Then two things happened to change my somewhat apathetic behavior. I got off my butt and ran top to see what was what and located the malfunctioning program. After killing aRTS (who needs sound, anyway?), things ran much more smoothly. (I’ll reinstall it later; right now my Ubuntu laptop is sitting nearby generating music from Amarok.) The second thing was the death of my daughter’s PC, caused by another dead power supply. I cannibalized a 512-MB DDR chip and stuck it into my work machine on Monday while I awaited a new power supply and more RAM from my online supplier.

After the RAM upgrade, I fired up the “Desktop Effects” command in Kubuntu and clicked the Install button. apt-get ran, pulled the right files down, installed them, and… nothing. No fancy special effects. No configuration settings. Nothing.

First off, it should be noted that there’s some additional steps you need to take in *buntu to get Compiz running, not the least of which is running compiz –replace in the terminal, to actually put Compiz in the role of window manager. There are other steps too, which are well categorized in this excellent German blog post I found. Whether you are just starting out or have been around the Compiz block a few times, it’s a nice resource.

After a few commands and setting changes, Compiz is now up and running on my work machine. As a geek, I totally love it. The wobbling windows, and the burning fire are very neat effects (the latter being very satisfactory when I point the mouse-as-firestarter at certain pundits’ bylines), and the cube desktop switcher, I have to say, is suh-weet.

But here’s my thing: other than eye candy, is any of this stuff really useful? Granted, the accessibility tools are solid and very needed. You get no argument from me there. But the pragmatist in me was wondering if these eye-catchers were going to do anything for me to get my work done.

And the answer is (so far): no, they’re not. But the rest of the answer is: who cares?

Many of the Compiz tools are simply there for fun; to expect otherwise is silly. If something productive can be done with them, then great. But sometimes we all need a little distraction, something to keep our minds fresh and our morale up.

It reminded me of the earlier days of Linux, when things used to be done for the sheer joy of it. I remember my first installation of Linux (Caldera OpenLinux, if you can believe the irony) and being giddy and amazed that during the installation you could actually play a Tetris-like game instead of waiting for the installer to finish churning. It was unique, and it served no real purpose, other than to entertain.

So when someone says, that stuff is just a waste of time, tell them (like I have told myself) to lighten up and learn to play a little.

Related posts

• No related posts.

On Mac OS X I prefer Twhirl which allows me to send tweets to separate accounts from individual windows. So I can send tweets for my @zenoss and @mrhinkle accounts. Twhirl is an Adobe Air application which now is available for Linux as an alpha. Thanks to Seth Yates I now have Twhirl running as an AIR application with Adobe Air running natively on Ubuntu. the only downside seems to be that the notification windows are a little “flutterly” I really don’t care for them anyhow so I turned them off and everything seems to run well.

Related posts

• No related posts.

North-by-South is a network of open source developers from all over the Americas. We work with companies to ramp up any software project–starting from scratch or helping with your existing website or application, specializing in open source solutions and rapid timetables. We manage geographically-distributed development with programmers from near-by Latin America, where an incredible free software movement is being shaped by a new generation of open source developers.

His company has gives San Francisco companies professional project management locally while the code is written in San Palou Brazil. Even the Indian outsourcers are moving their operations to central and south america as costs in their country are rising.

There’s an incredible free software movement happening in Latin America. Led by Brazil, who is migrating all of its public systems and state-owned IT firms to open source software, many more Latin American governments are introducing similar decrees (Ecuador, Venezuela, Argentina, Cuba, Bolivia, Paraguay, Uruguay and more). Out of this movement is an entire generation of open source programmers
who exhibit all the best qualities of free software developers: passion for code, meticulous attention to detail, etc.

Ryan has worked with a core group of about 30 Latin American programmers for 10+ years. He decided to form a developers network that would allow Latin American programmers to work on projects from the San Francisco Bay Area. For them, they’re making more money than they ever could locally.

NorthbySouth is also doing some good work to support the San Francisco developer community as the founders of the San Francisco Community Colocation project that helps non-profits collectively purchase data center services.

Ryan also adds:

We believe strongly that the Latin American model of open source adoption is something that
can be replicated all over the globe and already that’s starting to happen in South Africa, India, parts of Europe and more

Related posts

• No related posts.

Open source software is a disruptive technology it’s about changing the status quo. Open source is rock and roll while proprietary software is easy listening. That’s why I always admired JBoss’ Marc Fleury. Marc was and is a bad boy, a rebel, and he played the part to a successful $350 million dollar acquisition of JBoss by Red Hat. Beyond that he was a professional who built a company that was professional and respected grew his customer base and created an iconic software brand. All things that are consistent with open source software, he also seemed to have a good time doing it.

Earlier this spring Ben Sabrin (a JBoss alum) from Appcelerator told me a story about Marc. Apparently Ben was ribbing Marc because Larry Augustin had made this list of the Who’s Who of Open Source that I had put together for LinuxWorld. Marc wasn’t on the list, simply because he had retired. I guess they gave him a hard time of about being forgotten and he got Marc pretty fired up. Larry Augustin piled on and they all had a good laugh at Marc’s expense. Ironically I always thought Marc Fleury was a great open source leader because you never had to wonder what he was thinking he was always quick with a colorful quote and the Java community loved him. He was smart and really nailed what it meant to do Professional Open Source (this was/is the JBoss tagline). Anyhow maybe Marc isn’t really my hero but here’s why I admire him and belongs on the all-time Who’s Who of Open Source list.

1. He Built a Community and then Built A Company
   There’s a huge lesson to be learned here for open source companies. Before JBoss took any venture capital they had over 6 million downloads and a thriving community which helped him grow his company quickly.
2. He Didn’t Do It in the Valley
   I have nothing against Silicon Valley but there are so many talented people all over the world it amazes me how much credibility people get from being in that small overcrowded strip of northern California. Fleury built JBoss in Hotlanta, the city the damn yankees burnt down, the home of the world’s most sugar-laden sweet tea, a NASCAR hotbed and the home of the three syllable Ya’aa’llll.
3. Returned Value to his Stakeholders
   As an entrepreneur the sign of success is return value to his shareholders. When JBoss was acquired by Red Hat for $350 million investors and employees a like made money.
4. He Fostered a Legacy I think one of the biggest contributions Marc made to open source was that he infected a bunch of guys with the bug to go make it on their own. Many of them walked away with more than a little pocket cash and they started their own open source companies. Here’s a list of JBoss alumns and what they are up to now.
   Appcelerator - Rich Internet Applications
   JBoss alumni: Jeff Haynie, Ben Sabrin, Matt Quinlin
   LoopFuse - Marketing and Sales Automation
   JBoss Alumni - Roy Russo, Tom Elrod
   RingSide Networks - Social Networking Server
   Jboss Alumni - Bob Bickel, Rich Friedman, Mark Lugert, Shaun Connolly

   Besides the people the JBoss brand continues to grow.

5. Marc Fleury is was and will always be a Rockstar
   More so than any other open source leader Marc Fleury has been colorful and had fun. He was probably one of the most quotable open source leaders of all time. Here’s the proof. At JavaPolis 2006 he showed up dressed as Public Enemy’s Flava Flav and gave a great professional intelligent speech on professional open source.

I only met Marc once at Red Hat Summit in Nashville a few years back when Rich Friedman introduced us. We only talked a few minutes but I was happy to see you could be a company executive without being a stuffed shirt, in fact he was wearing camouflage cargo pants and a beret at the time. Bottom line I’ll party with Marc anytime, maybe he’ll even given me ride in his new Tesla someday.

Related posts

• No related posts.

What interested me about this announcement was the fact that usually Canonical’s pretty happy to announce an existing partnership with a vendor that’s about to use this product. According to the press announcement, and my conversation with Goodall and Gerry Carr, Marketing Manager, a number of OEM deals are being made, but none of those OEMs are ready to announce… yet.

One reason why Canonical may feel good about spreading the word early about this new Remix is the nature of the product itself. This Remix, Goodall explained, is “only for OEMs looking for a quick route to market.” OEMs who need something very customized can work with the Ubuntu Mobile Edition, but if the hardware vendor is using a basic set of Atom-based tools and hardware, the Netbook Remix can just be slipped right inside with a minimum of fuss.

Another peculiarity is that this is really the first *buntu product that isn’t available for direct download. It’s made especially for OEMs, Carr explained, so there really isn’t a complete ISO to download. For those über-geeks who really want to get the code, Carr told me that the Remix will be available through the Personal Package Archives for Ubuntu.

Carr indicated that other reasons for the timing of this announcement was to coincide with Intel’s big push for Atom out at Computex, as well as the huge amount of interest for MIDs from end-users. He also added that he doesn’t  think the first Netbook Remix-MID announcements are too far off and that we should see the first Remix-loaded MIDs around the Fall of 2008.

Related posts

• No related posts.

If you ask open source users if they have heard of ClamAV or Snort they probably would be able to tell you that they are the leading open source software for virus protection and intrusion detection respectively. Recently, SourceFire has been in the news a bit lately as Barracuda Networks has made a bid for their open source competitor.

Founded in 2001 SourceFire (NASDAQ: FIRE) went public in May 2007. The IPO gave Sourcefire a market capitalization of $347 million. In October 2005 the Justice Department blocked the sale of SourceFire to Israeli owned Checkpoint Software for $225 million. Now Barracuda Networks is making an offer for SourceFire for $188 million. Sourcefire’s revenue for the first quarter of 2008 was 13.6 million and they lost 29 cents per share. Despite this negative trend I still think SourceFire can turn around their backslide by leveraging some under-utilized assets.

Here’s what stuck me as I started poking around, theoretically a Google search will return the most relevant results for a search. For example when I search for intrusion detection the first two results are Wikipedia entries (both which mention Snort) and number three is the Snort.org home page. SourceFire doesn’t show up in the first 50 search results for intrusion detection.

What this tells me is that the Snort brand is considerably stronger than the SourceFire brand. In fact as the page says Snort is the de facto standard for intrusion detection/prevention.

I am a strong believer that if you make open source software you lead with your software and follow with your services. What I mean is that you invest in your open source software community, build loyal users, make the software successful then you capitalize in a way that benefits both your users and your company. I don’t see evidence that Sourcefire has done that to greatest degree.

Most open source companies benefit by sharing the goodwill they created with their software by sharing their names (i.e. MySQL, Red Hat in the pre-Fedora days, Zimbra, SugarCRM). I also have seen some companies fail to capitalize on their brand (Remember when Novell renamed SUSE to Novell Linux Desktop, a big flop). I am surprised that SourceFire does so little to capitalize on their strong security brand. For example, why not name the company Snort Networks.

I also like to check out user forums in open source projects as a sign of health of a project. I was surprised that I wasn’t even allowed to read the forums without registering in detail. Even after I registered I was unable to login and received a must have cookies enabled message (My browser was set to accept cookies but that’s not the point.) The barrier to participation was rather high especially for an open source project. On top of that having your content indexed by Google is a huge help in search results. I was shocked that an open source project was so closed to participation.

Another asset is new to the SourceForge family ClamAV. In my opinion the acquisition of ClamAV should have helped them build their brand. ClamAV has been downloaded over 13 million times according to SourceForge.net and distributed various other ways for many years. The ClamAV mailing lists show a fairly good volume of email and show the signs of a vital open source community. The thing that was puzzling to me is that ClamAV website is almost devoid of mentions of the SourceFire sponsorship. I don’t think they need to wallpaper the site with the SourceFire logo but surely they should get even some minimum benefit from being a sponsor.

Now why do I focus on the marketing aspect of open source? After taking a look at the SourceFire 2007 Annual report I see some interesting things. According to their financials for last year they had revenue of 42.7 million dollars and sales and marketing costs of 25.8 million. That is 60% of revenue spent adding new customers. In contrast their cost of R&D is 34% of revenue. So controlling costs or at least helping leverage what they are spending should have the biggest impact on their profitability.

As I look at the Barracuda Networks offer, it seems like their play is to take a competitor off the market and convert SourceFire customers to their products. And given what others had been willing to pay for SourceFire in the past they probably would be doing so at a bargain price. I believe that SourceFire needs to take a gutcheck and realize that they have been successful because they simply executed a good software strategy typical of a proprietary software company. They made a good product, they offered a good value, and they had good results. However, there is a lot of competition in enterprise software and I think they have never fully leveraged their open source brand. When times get tough you need to tighten your belt and squeeze out every bit of efficiency. Open source offers a lot of efficiency in distribution, marketing, product management powered by a huge community. Figuring out how to better leverage that community is their best opportunity to reverse their fortunes.

[Disclosure: Michele Perry SourceFire’s Chief Marketing Officer is an advisor to my company, Zenoss, though she may not appreciate my commentary on their marketing plan ]

[Barracuda Photo Courtesy of Festeban CC non-commercial license http://www.flickr.com/photos/festeban/9777900/]

Related posts

• No related posts.

That’s why I like Linux as a desktop platform. For many years I was an advocate for using the Linux desktop, I even wrote a Windows to Linux migration book for business users. Though the time has yet to come for the widespread Linux desktop adoption. I have speculated in the past that Novell’s SUSE Linux Desktop or Ubuntu would see traction but as of late I think that even that prediction is off base. I think the companies that will break our addiction to Windows will not be neither of them. It will be Google and Amazon. Here’s why.

I think that real reason people become dependent on Windows isn’t the operating system, it’s not the great support from Microsoft’s 800 support number. It’s applications and hardware support. As an independent software vendor (ISV) there’s not a great incentive to develop to any other operating system when you consider the 90%+ of all PC users are using Windows. For a while I was convinced that the intermediary step for desktop independence was going to be virtualization e.g. run two OSes side-by-side. Recently Citrix announced a new desktop virtualization product, XenDesktop that does just this. Though recently my opinion has evolved. I think what will happen is that most users will skip this step and go right to the network for browser-hosted applications.

The reason I think a web-centric is going to be the norm is due to the size of the market. As you look at the size of the potential users( buyers) the next generation of information workers will likely become dependent on web applications like Google Docs and less so on Microsoft Office. The market for browser based applications will be the greatest and vendors will be able to develop to W3C standards and not that of individual OS vendors. At that point the desktop operating systems becomes more of a conduit to your applications and less of an end unto itself, at that point we achieve desktop independence.

Case in point, my company recently shifted to Google Docs as our document collaboration platform. Initially we used Google Docs to author simple documents or to upload a document originally authored in Word. Today I noticed that my Google Docs had a link called, Insert Plugin. It gave me options of things I could insert into Google Docs. When Google bought Writely(the product that formed the basis for Google Doc) it was very slick but only offered rudimentary features. Google has since continued to add features and now they are even crowd-sourcing the addition of more features through the plugin exchange. Couple this with a ever-improving GMail application and the dependence on Office is nullified. Though maybe we are just trading one master or another.

Google is only one of many web applications that are slowly replacing my native applications. For photo editing I find myself uploading pictures to Flickr and editing them in Picnik rather than editing them on my desktop. To-do lists and projects are managed in a hosted task-manager application (Tasks). I could go on. The bottom line is that with each new web-application I am reducing my dependence on any one vendor. The downside is that until that data is portable I am locked in to some extent to those applications, but not one vendor who owns my desktop and productivity suite.

Web applications are going to proliferate. Amazon’s EC2 brings the barrier to entry for deploying scalable web applications (and companies) so low that you don’t need Google’s billions to develop and grow a scalable redundant architecture. Amazon and cloud computing are changing the rules for building and hosting infrastructure. This is good for the end-user as choice and competition keeps innovation high and prices low.

Beyond applications Ihave been playing around with file storage via Amazon’s EC3 this too is one step towards desktop independence. The economics for storing files has been broken down to bandwidth and cheap per gigabyte storage. You only pay for what you use. There are also intermediaries for these services like, JungleDisk which provides software and value-added services in addition to EC3. This combination now frees my data along with my applications.

The Linux Desktop Opportunity

This opportunity is the same for Linux as it is for Mac. If you are no longer dependent on your desktop operating system for tight application integration you have a lot more freedom in your desktop platform. That opens the door for Linux. Frankly, I use an Apple OS X desktop (which supports my EVDO card) for my work laptop but much of the time I prefer the quick response of my Ubuntu operating system running on a Dell laptop which costs about one-third of the what my Mac Book Pro does. With a little tweaking and growing hardware support (for me it’s support for my Verizon EVDO card) I see Linux desktops like the AsusEEE being a good alternative to one running Windows. If all your apps are in the network it’s likely you could use inexpensive desktop computers at work running Linux and ultra-mobile PCs on the road. I don’t expect a massive migration to Linux or Mac from Windows. I just envision a opportunity for a greater and more realistic number of choices for desktop computing.

And who do we have to thank… Gamazon?

For more Mark Hinkle, visit his Socialized Software blog.

Related posts

• No related posts.

SMBs need something streamlined, fast, powerful, and inexpensive to get the job done. Sounds like open source software to me.

While this stance is nothing new, nor is the one big obstacle facing those who want to market and deliver to the SMB space: there’s a whole lot of SMBs out there, and no really clear sales channel to them. Microsoft, and vendor who write Windows-compatible software, don’t have this problem. Their customers have been buying pre-loaded Windows PC for years, and base all their software purchasing decisions based on one big requirement: does it run on Windows? That channel is a gold mine for the proprietary vendors, and until more OEMs start pre-loading Linux, it’s a lock for the Windows team.

I have lamented about this before, and fretted openly how any open source provider would be able to get their wares to the sheer number of SMBs in the world.

I should not have worried.

On Friday, Open-Xchange, the Tarrytown NY-based mail and collaboration server company that once upon a time was spun off from SuSE Linux GmbH, announced an integrated solution between Open-Xchange Hosting Edition (OXHE) and the Parallels Automation Tools to create a virtual version of OXHE than can be managed by the Parallels toolset.

At first, this just sounds like another virtual appliance announcement, Which is, on the one hand, kind of cool, but on the other hand, sort of old hat. But I had a chance to speak with Jürgen Geck, Open-Xchange’s Chief Technology Officer, and I learned that this new collaboration is a big step towards accessing Open-Xchange’s sweet spot: the aforementioned SMB market.

Geck explained that a virtualized OXHE makes it much easier for internet hosting providers to set up hundreds, if not thousands, of separate instances of OXHE, which could give a hosting provider the ability to manage hundreds of thousands up to millions of virtual domains. These domains are perfect for the provider’s customers, like SMBs, to use as mail and collaboration services for their company.

Of course, this is something Google already does with Gmail, so what’s the big draw for SMBs? Geck told me that using Google is easy to do, but ultimately it comes down to where a customer’s data is being stored. Use Gmail, and your mail data is at Google. Use OXHE, and your data is held at the host provider–with one important difference. If the customer ever decides to switch providers to another host that uses OXHE, they can, easily. If they want to handle the data themselves, they can get a local Open-Xchange Server running and pull their data back inside.

Geck believes that such locally-hosted mail/collaboration services will soon become the rule rather than the exception. Big, massive installs of groupware (Groupwise, Domino, or Exchange) tend to run counter to what businesses need, in his opinion. Smaller, more modular instances of groupware, hosted or local, can provide department level support and control and help keep data current.

Strengthening the Hosting Edition with this virtualized toolset makes it a lot easier for an Open-Xchange customer, such as hosting provider 1&1, get a lot more power and efficiency for customers using their underutilized data center processors. Going hosted also gives Open-Xchange a clear shot to the big and diverse SMB market.

How big? Geck related a recent search of German business figures for an investor presentation he had to do. He discovered that there are about 3.9 million registered businesses in Germany. Of those, 3.3 million are categorized as SMBs. All potential secondary customers for Open-Xchange.

And, as if to prove this point, I just read over the wire another Open-Xchange announcement:

Open-Xchange,
Inc… and Network
Solutions, LLC… have partnered to
deliver a hosted email service to small and medium sized businesses.
In the near future, Network
Solutions
will
offer Open-Xchange’s
advanced web-based personal information management client as an option to
their customers. Based
on Open-Xchange’s award-winning Smart Collaboration technology, the
agreement
will provide Network Solutions’ customers with highly integrated and
feature-rich email, calendaring, contact and task management, through an easy to
use interface

So, the push for more host providers has begun, and we should look to see a lot more of this hosted/Software as a Service-type solution being delivered to customers in the foreseeable future. After all, if you can get to market directly, let someone else with the market ties make the sale for you.

Makes sense to me.

Related posts

• No related posts.

The tides are shifting, debates now center around which open source license to use. Adding to the complexity of the debate is proliferation of OSI-approved licenses. Now discussions are rising over the open source licenses that are in the best interest of all stakeholders of an open source project. In the case of collective software works there is also the added intricacies of license compatibility.

Part of the problem is that companies are trying to drive their own vanity licenses that reinforce their branding and leverage the goodwill associated with the open source seal of approval. SugarCRM once mounted an offensive asking for acceptance of their Sugar Public License (a derivative of the OSI-Approved Mozilla Public License) that for a brief time was gaining popularity among commercial open source developers. The license was rejected and Sugar has since moved to the GPLv3. Ironically the Common Public Attribution License (CPAL) submitted by Social Text, which bears many similarities to the Sugar Public License, was accepted by the OSI. Even Microsoft has successfully lobbied the OSI-board for approval of two licenses. The Microsoft Public License (M-PL) and the Microsoft Reciprocal License (Ms-RL) which are very similar to the BSD and GPL licenses.

The number of open source projects has grown considerably over the last ten years, actually exponentially according to a paper delivered by Amit Deshpande and Dirk Riehle in March of this year.

According to Black Duck Software knowledgebase the most common open source license used by open source projects is the GPL version 2.0. According to that same source 94% of open source projects use 10 licenses.

For more Mark Hinkle, visit his Socialized Software blog. No tag for this post.

Related posts