Open source and business rules

Mark Proctor Co-Creator Project Lead
T he SkyNet funding bill is passed.
The system goes online on August 4th, 1997.
Human decisions are removed from strategic defense.
SkyNet begins to learn at a geometric rate.
It becomes self-aware at 2:14am Eastern time, August 29th
In a panic, they try to pull the plug.
And, Skynet fights back

History
1960 – Arpanet
1969 – Internet
1985 - Clips
1991 – Linux
1993 – Red Hat
1995 – Apache Http Server, Java
1998 – Netscape Navigator
1999 – JBoss
2003 - Spring
2004 – Eclipse
2005 – Drools 2.0
2006 – Red Hat / Jboss Acquisition
2007 – Open Source Java

Notable People Richard Stallman Eric S Raymond Linux Torvalds

Cathedral & the Bazaar
Published 1997
Cathedral
GNU Emacs, GCC
Bazaar
Linux
19 guidelines
Scratching an Itch
Given Enough Eyeballs
Release Early, Release Often
Linus' Law
"given enough eyeballs, all bugs are shallow“
Convinced Netscape to OSS

Free as in Free Speech
Think of “free speech”, not “free beer”

Licensing
OSI
Open Source Initiative
GPL
Copy Left
LGPL
Business friendly Copy Left
BSD/MIT/ASL
Business friendly
Attribution/Adware
Nagware

Organisations

Technologies
GNU
Linux
Netscape
Gnome / KDE
MySQL / Postgresql
Open Office
Java
Apache
Tomcat, Apache Server
Jboss AS
Spring
Eclipse
Open Symphony
Quartz
Code Haus
Maven, Groovy, Drools, ActiveMQ
PHP
Perl
Samba
Gimp

Companies / Organisations
RedHat, SCO, Debian, Slackware, SuSE (Linux)
JBoss (Java)
Spring (Java)
O’Reilly (Documentation)
VA Linux (Sourceforge, OSDN)
Sun (Java, OpenOffice)
IBM (Linux, Java, Eclipse)
GNU Foundation (GNU/Linux)
Electronic Frontiers Foundation [EFF]
Apple (Darwin)

Threats
Digitial Content Control and Licensing
Lock-out of free software from tenders
Cloud
Software Patents
Commercial Attacks

Failed OSS Attacks
SCO
Novel/Microsoft
Oracle Linux

Oracle “Clones” Red Hat At Half the Price
Oracle “clones” Red Hat in October 2006
Announces distribution “based on” Red Hat Enterprise Linux
Oracle charges half what Red Hat charges for “same” product
Enterprise-class support from thousands of trained technicians
Customer benefits include
Full stack from single vendor (just like Microsoft)
Savings on high software acquisition costs
Simplify life by dealing with fewer vendors

The Success So Far
First 90 days download statistics
9,000 people download Oracle Linux
1,000,000 people download Fedora Core 6, another “free” Red Hat “clone.”
A veritable groundswell of support
Reference accounts, particularly running non-Oracle software
Ecosystem of third-party vendors stampeding to support Oracle Linux

Effect on Red Hat Pricing
What price changes did Red Hat make immediately in the wake of the Oracle announcement?
None. Zero, zip, nada.
We’re not hearing of any individual deal discounting.
Red Hat knows that they have a premium brand, so ignoring people competing on price is the right strategy.
The role of a premium brand
Lamborghini ignores price competition between Hyundai and Kia.
Oracle ignores price competition between MySQL and PostgreSQL.
General Observations on Software Pricing
Software is not price competitive at market level, no matter who thinks it is.
Software companies do discount on initial deals then make it up with higher prices later, but this is hard with subscription model.

Impact on Red Hat Stock Price

What happened here?
What happened here?
Wrong Economic Model of the Software Business
Poor product launch -- self-inflicted problems
Blogosphere figured out instantly that they are using CentOS
Problems installing product; unreliable download site
No credibility for support offering.
No hiring of dedicated support.
Sending database support reps to training class won’t cut it – didn’t work for Novel in 2003 for SuSE launch, either.
Focus on solving a vendor problem, not a customer problem.
Raises indirect costs for switching.
Raises “contingent costs” excessively for no benefit
ustomers fantasize about vendor consolidation but won’t pay for it.
Solving the wrong vendor problem, at that...

Solving the Wrong Problem
Controlling the entire stack
Worked well for Microsoft until recently.
Worked for IBM in the 1960s-1980s
IBM knows well the limits of this strategy (no applications)
Getting people off proprietary hardware
RAC very successful at this; driving significant portion of growth in database licenses
Every dollar not spent on Sun or AIX hardware maintenance can be spent on Oracle maintenance

What's the real problem
Mature database business: is there a “Next Big Thing?”
For 20 years, growth of database business is due to new features allowing databases to enter bigger addressable markets.
Application technology is moribund
When will double entry bookkeeping be replace by triple-entry?
Incremental modules and riding platform shifts are the big opportunities
Company size makes it hard to sell individual products
Makes it hard for a new acquisition to deliver “synergy” (1+1=1.2)
Integration of acquired products and technologies
Risk of Project Fusion is enormous
SAP can play conveniently against technology migration risk and expense

What's the real problem
Weak partner channel versus Microsoft and IBM
Competing increasingly with partners makes it harder to sign up new ones.
“Community” is an important type of partner relationship
?? … Cloning Red Hat solves how many of these?
(These are problems common to many large software companies, not just
Oracle)

Vertical vs Horizontal
Horizontal
Technology for your infrastructure
Vertical
Technology for a market solution

Business Model

Business Models
Hybrid
Childrens Edition
Dual License
Authoring
Professional Services
Support, Training, Consultancy
Integration to support stack
Enabler of core business

Communities
Organisation Structure
Benevolent Dictator
Democratic Consensus
Organisation Body
Commercially backed
Commercially sponsored
Volunteer(s)
Social Contract
License
Standards and practices
Interactions

Assessing Risk
Health of Project
Mailing list, irc
Code commits
Number of Developers
% of internal to external developers
Commitment and health of commercial backers
Availability
Leaders or followers
Professional services
Hiring
Continued education
Books, events, blogs, articles
Ecosystem, 3 rd parties and satellite communities

Various
Ecosystem
Poisonous People
Universities

Motivations
Fun
Learning/Exploring
Mastery
Being part of Something
Making a difference
Scratching an itch

About ME

It All Started Here Birth of CDSS 1970s 1980s Dendral Baobab Mycin Guidon Neomycin Teiresias Puff Emycin WM Sacon Centaur Wheeze Gravida Clot Oncocin Prolog

Because Not Everyone Is As Smart As He Is

Business Rules Engines 1980s 2010s 1990s 2000s OPS5 ART Clips Jess Drools 2 JRules Drools 3 Drools 4 Drools 5

Declarative Technologies
Production Rules
Drools, Clips,
Prolog
Prova, SWI-Prolog, Kernel Prolog
Semantic Reasoning
JENA, OpenRDF
Decision Software
Open Rules
Processes
ODE, jBPM, Bonita, YAWL
Event Processing
EIP, Drools Fusion, Esper

Standards
RIF
RuleML
PRR
JSR94

Open source and business rules

by Geoffrey De Smet

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