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INDUSTRY WATCH: Free, as in for Profit
By David Rubinstein
 Febuary 15, 2004 — NEW YORK — There was no talk of “cathedrals” and “bazaars.” There was no mention of fragmentation. The usual proselytizing was missing. But what there was discussion about, on the floor and in the meeting rooms of the LinuxWorld Conference and Expo at the Jacob K. Javits Convention Center here in mid-January, was money. Specifically, how to make it.
Novell CEO Jack Messman set the tone for the event in his opening keynote, saying the first issue facing vendors that wish to sell open-source software is how to profit. “That’s of significant interest to our employees, shareholders and the folks on Wall Street.”
Messman said that open-source software removes licensing as a revenue-generating component, and that companies will have to rely on maintenance and support to make money. “We charge for cleaning up the code and making it easy to use,” he explained.
In a press conference later, Novell vice chairman Chris Stone outlined a kind of hybrid proprietary/open-source vision of a software stack that’s built on an open-source operating system yet can include commercial software built on top. He said that Novell is currently analyzing its proprietary software to see what it will open up to the community, but added that GroupWise, the company’s enterprise messaging software, “generates a lot of revenue for us” and is not under consideration to be made open-source at this time.
There were no details provided about how future licensing will be handled—Messman and Stone reiterated that Novell had owned SUSE Linux only for about a week—but on first blush, it appears that licensing will not be removed from Novell’s revenue equation, and that proprietary, commercial software will be retained and sold atop the open-source operating system. The company’s actions on these issues down the road will speak louder than Messman’s assurances at the conference about “giving back more than we take” from the open-source community.
Messman emphasized the need to include ISVs and infrastructure vendors to build a software stack that can compete in the enterprise with Microsoft’s Windows and the various offerings built atop the Unix and Solaris operating systems. Among the major barriers to Linux adoption now, he cited, are global, round-the-clock support and third-party applications.
Database vendor MySQL AB and Java app-server vendor JBoss Group were quick to capitalize on the new attention Novell has drawn to the open-source world, announcing they were forming a marketing alliance to add an infrastructure package to build on top of Linux.
“This is further legitimacy for Linux and good for the professional open-source community at large,” said Marc Fleury, founder of JBoss. MySQL marketing vice president Zack Urlocker predicted that as Linux becomes more mainstream, customers will want to see “what else in the open-source world [they] can use.”
Fleury indicated he was happy to see Novell enter the market as an alternative to Red Hat, which he characterized as “aggressive in commercial terms” and “bullying smaller companies.” Urlocker was quick to point out that Red Hat “put Linux on the map, but it’s always good to have a competitor.”
Fleury called the companies that will help build out the Linux stack “second-generation” open-source companies. “First there were the Linux guys. The second generation have different business models. I call it professional open source, as all the companies offer 24/7 support, sales and marketing.”
Urlocker pointed out that MySQL is not trying to compete against Oracle or Microsoft database implementations. “We compete against nonconsumption,” he said. “There are 4 million active installations and 10 million downloads” of MySQL. “These are people who wouldn’t have a database otherwise. We’re selling to the commoditized market. We don’t have all the bells and whistles, but it’s also 1 percent of the total cost of ownership. We’re JetBlue against American Airlines.” He said that MySQL makes about 65 percent of its revenue from licensing.
Fleury made the point that the Free Software Foundation licenses—most notably GPL—have a strong notion of intellectual ownership built in. “If you take from it, you must give back,” he explained. “That gives ownership to everyone. BSD [licensing] is more of a cult. You can take my stuff and don’t have to turn it back. The Free Software Foundation leads to stability because everyone has to give back. Under BSD, infrastructure vendors take [Apache] Tomcat, add a few features and charge $2,000 per CPU. BSD licenses are developer unfriendly and end-user unfriendly. That’s why free software has led to business.”
Messman said, “Many people confuse open source with free. It’s just not true. We mean free as in freedom of choice, not free as in free beer.” He seemed just a bit uncomfortable trying on that old saw for size.
But it was clear from the enthusiastic response of vendors and enterprise users alike that Novell, with its name recognition and billion-dollar valuation, has taken the wheel in the drive to get Linux more deeply rooted in the enterprise. Microsoft, IBM and other software stack providers have a new Novell to worry about.
David Rubinstein is executive editor of SD Times. |
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