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How big corporations play the    open source game                 Henrik Ingo                 Froscon 2012  Froscon 2012  ...
Henrik Ingo                                open source technology and                                strategy specialist  ...
What we want to learn todayIBM, Oracle, Google, Microsoft......are now all involved in open source    Why?    = business j...
The web companiesGoogle, Yahoo, Facebook, Twitter...Startup phase:  Use stuff for free, foss is more agile, etc...Mature p...
Google and big dataPretty closed compared to peersInvents Bigtable, MapReduce   ...but doesnt tell anyone.Realizes that be...
Alliances vs the proprietary market leadersMarket leader                      Open source as theproprietary               ...
IBM (1998)What does IBM sell?               Operating systems 1998:  Servers?                                      Windows...
IBM (1998)            Low end operating            systems not controlled            by IBM            Microsoft, Sun, HP,...
Its about control / independenceIBM activity        Against who            To get access toLinux               Windows, So...
Oracle vs Sun: Share of walletStack (1990s)                       New stack (1998 -> )  Sun Solaris                       ...
SunThe famous "too little too late" strategy  Compare w Netscape 1998 :-)  SCSL in 1998 was not an open source license  SI...
The Fortress theorem  Most companies have a single  star product, which generates  most of its revenue. All other  product...
Google, Mozilla, Chrome, AndroidThis explains Googles investment insome open source projects:  Mozilla:  If everyone uses ...
Microsoft2001: Shared Source,"Cancer"2007: MS-RL and MS-PL  Perens et al: "Its a trick,  dont do it!"  License proliferati...
Actual MSFT internal slide. 2003                Froscon 2012                                                        15http...
Microsoft: Outercurve foundation                                                Codeplex. Microsofts Sourceforge. 2006    ...
Microsoft: Outercurve foundation2008:                                                                     2009"Ramji sat d...
What have we learned?Web companies use FOSS for the low licensing andR&D costFOSS provides a framework for alliances to at...
What does it mean for FOSS?Big corporations use FOSS as a weapon to beateach other in the head. (Or defensively as ahelmet...
SourcesSkyscraper: CC BY http://www.flickr.com/photos/rene-germany/28095903/Sun:SCSL http://en.wikipedia.org/wiki/Sun_Comm...
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Froscon 2012 how big corporations play the open source game

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Explaining open source strategies used by big corporations like IBM, Oracle, Sun and Microsoft

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Transcript of "Froscon 2012 how big corporations play the open source game"

  1. 1. How big corporations play the open source game Henrik Ingo Froscon 2012 Froscon 2012 1
  2. 2. Henrik Ingo open source technology and strategy specialist active in MySQL, Drupal communities worked in mobile and LAMP with business management, sales, R&D current: Senior Performance Architect at Nokia author of "Open Life: The Philosophyhenrik.ingo@openlife.cc of Open Source" www.openlife.cc http://openlife.cc/blogs/2012/july/cloudstack-has- proof-foundations-way-create-foss-community Froscon 2012 2
  3. 3. What we want to learn todayIBM, Oracle, Google, Microsoft......are now all involved in open source Why? = business justification How? = strategy We are perhaps familiar with Red Hat, Canonical or MySQL AB business models. But what business do these companies get out of open source? Idea is to learn how to "read" these big corporations when they are active in our communities. Froscon 2012 3
  4. 4. The web companiesGoogle, Yahoo, Facebook, Twitter...Startup phase: Use stuff for free, foss is more agile, etc...Mature phase: Web scale would not be possible with proprietary licensingValue is not in controlling the software: commoditization is good off the shelf is goodThis strategy is well understood in the community Froscon 2012 4
  5. 5. Google and big dataPretty closed compared to peersInvents Bigtable, MapReduce ...but doesnt tell anyone.Realizes that being too isolated is counterproductive.Publishes academic papers so universities can teach the stuffto a new generation.Doug Cutting & Yahoo write HadoopSame has happened with newer Google data platforms, HWarchitecture, etc...Essentially, by publishing papers about its proprietary tech,Google invites the world to "catch up". Work is done by othersthan Google. Froscon 2012 5
  6. 6. Alliances vs the proprietary market leadersMarket leader Open source as theproprietary framework for alliances Microsoft Linux Google Hadoop Amazon OpenStack Froscon 2012 6
  7. 7. IBM (1998)What does IBM sell? Operating systems 1998: Servers? Windows Growth Operating systems? SW: Databases, J2EE, Solaris, Digital Middleware, Tivoli... Unix, HP Unix... Integration? AIX Solutions? Mainframes C-level consulting? Answer: IBM sells "everything" Froscon 2012 7
  8. 8. IBM (1998) Low end operating systems not controlled by IBM Microsoft, Sun, HP, Digital are competitors Linux is controlled by nobody Famous 1 billion $ investment Froscon 2012 8
  9. 9. Its about control / independenceIBM activity Against who To get access toLinux Windows, Solaris... Low end serversApache Foundation ? httpd serverApache Harmony Sun Java JVM / JDKEclipse Sun Netbeans DevelopersApache Geronimo JBoss OSS J2EE, Wesphere CE Froscon 2012 9
  10. 10. Oracle vs Sun: Share of walletStack (1990s) New stack (1998 -> ) Sun Solaris Red Hat Linux (bloody expensive) (cheap, once upon a time) Oracle Enterprise Oracle Enterprise (bloody expensive) (bloody expensive) Weblogic Weblogic or Websphere (bloody expensive, (bloody expensive) owned by Oracle) Cannibalize complementary products => customer has more money to spend on your product Round 2: Oracle Enterprise Linux vs Red Hat Round 3: Expand into HW Froscon 2012 10
  11. 11. SunThe famous "too little too late" strategy Compare w Netscape 1998 :-) SCSL in 1998 was not an open source license SISSL from 2000 to 2005, then LGPL for OpenOffice, GPL for JavaContinues to "invest in innovation" the old school way, while giving away SW for freeunder FOSS licenses Solaris, SPARC, Java, OpenOffice, even MySQL, are all in house developments. Community participation problematic.CTO-level comment from Suns biggest customer:"We are standardizing on Linux but we still allow Solaris only because you opensourced it." +90% of revenues from selling Sparc+Solaris systems. Linux and X86 efforts suffer due to short term choices.Lessons learned: Merely picking an open source license is not a substitute for real community engagement, good PR nor competent sales strategy Open Source was a good defensive strategy. Without it, Sun would have died faster. Froscon 2012 11
  12. 12. The Fortress theorem Most companies have a single star product, which generates most of its revenue. All other products and strategies are simply additional layers of defense around this central revenue generator.Examples: Microsoft => Windows+Office Oracle => Database Google => Search+ads Froscon 2012 12
  13. 13. Google, Mozilla, Chrome, AndroidThis explains Googles investment insome open source projects: Mozilla: If everyone uses IE, they will use Microsofts search by default. Microsofts HTML, etc... Chrome: Since we are paying 300MUSD/yr to Mozilla, it makes sense to invest in your own browser instead. Android: If everyone uses iPhone, [you get the point...] Froscon 2012 13
  14. 14. Microsoft2001: Shared Source,"Cancer"2007: MS-RL and MS-PL Perens et al: "Its a trick, dont do it!" License proliferationContributes to Linux in2009. Top 10 Linuxcontributor in 2011.Contributes to Samba2011 Froscon 2012 14
  15. 15. Actual MSFT internal slide. 2003 Froscon 2012 15http://stephesblog.blogs.com/my_weblog/2009/09/open-source-business-tactics-in-one-slide.html
  16. 16. Microsoft: Outercurve foundation Codeplex. Microsofts Sourceforge. 2006 Froscon 2012http://web.archive.org/web/20060525054710/http://codeplex.com/ 16
  17. 17. Microsoft: Outercurve foundation2008: 2009"Ramji sat down with Gates, chief software Outercurve Foundationarchitect Ray Ozzie, and a few others todiscuss whether Microsoft could actually start License and tech agnosticusing open source software. Ramji and Ozzie Legal Proxywere on one side of the argument, insistingthat Microsoft embrace open source, and - IBM and Apache,Gutierrez offered a legal framework that IBM and Suse, Red Hatcould make that possible. But other top - Google with OHAexecutives strongly challenged the idea. 2012Then Bill Gates stood up. Wholly owned subsidiaryHe walked to the whiteboard and drew adiagram of how the system could work, from Legal proxy towards FRANDcopyrights to code contribution to patents, obligations in standard bodiesand he said — in no uncertain terms — thatthe company had to make the move." Qualcomm followinghttp://www.wired.com/wiredenterprise/2012/01/meet-bill-gates/ http://news.cnet.com/8301-10805_3-57413395-75/microsoft- folds-interoperability-team-into-open-source-subsidiary/ Froscon 2012 17
  18. 18. What have we learned?Web companies use FOSS for the low licensing andR&D costFOSS provides a framework for alliances to attackproprietary market leader (Amazon, Microsoft, Google)FOSS products are promoted so that proprietarycompetitor/partner wont control key component of yourstack (IBM, Google) Oracle: Share of Wallet Google: Protect the fortressFoundations shield companies from legal liability Froscon 2012 18
  19. 19. What does it mean for FOSS?Big corporations use FOSS as a weapon to beateach other in the head. (Or defensively as ahelmet...)The good news: FOSS prospers regardless of theirmotives: When Oracle contributes to Linux, to attack Sun or Red Hat, Linux wins When Sun buys MySQL to attack Oracle, MySQL wins When Microsoft supports CentOS to attack Red Hat, Linux Wins FOSS is designed to prosper from engagement! Froscon 2012 19
  20. 20. SourcesSkyscraper: CC BY http://www.flickr.com/photos/rene-germany/28095903/Sun:SCSL http://en.wikipedia.org/wiki/Sun_Community_Source_LicenseSISSL http://weblogic.sys-con.com/node/128267Fortress:http://en.wikipedia.org/wiki/File:Fortbourtange.jpgMicrosoft:Shared Source: http://en.wikipedia.org/wiki/Shared_sourceBlack Duck Top 20 licenses: http://www.blackducksoftware.com/osrc/data/licenses/Stephen Walli internal slide:http://stephesblog.blogs.com/my_weblog/2009/09/open-source-business-tactics-in-one-slide.htmlCodeplex 2006: http://web.archive.org/web/20060525054710/http://codeplex.com/Contributions to Linux: http://www.wired.com/wiredenterprise/2012/04/microsoft-and-linux/Contributions to Samba:http://www.wired.com/wiredenterprise/2011/11/how-microsoft-learned-to-stop-worrying-and-almost-love-open-source/all/1Bill Gates and Outercurve: http://www.wired.com/wiredenterprise/2012/01/meet-bill-gates/Microsoft Subsidiary:http://news.cnet.com/8301-10805_3-57413395-75/microsoft-folds-interoperability-team-into-open-source-subsidiary/ Froscon 2012 20
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