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Froscon 2012 how big corporations play the open source game

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How big corporations play the
    open source game
                 Henrik Ingo

                 Froscon 2012




  Frosc...

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Henrik Ingo



                                open source technology and
                                strategy special...

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What we want to learn today


IBM, Oracle, Google, Microsoft...
...are now all involved in open source
    Why?
    = busi...

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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 Philosophy henrik.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 today IBM, 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 companies Google, Yahoo, Facebook, Twitter... Startup phase: Use stuff for free, foss is more agile, etc... Mature phase: Web scale would not be possible with proprietary licensing Value is not in controlling the software: commoditization is good off the shelf is good This strategy is well understood in the community Froscon 2012 4
  5. 5. Google and big data Pretty closed compared to peers Invents Bigtable, MapReduce ...but doesn't tell anyone. Realizes that being too isolated is counterproductive. Publishes academic papers so universities can teach the stuff to a new generation. Doug Cutting & Yahoo write Hadoop Same has happened with newer Google data platforms, HW architecture, etc... Essentially, by publishing papers about its proprietary tech, Google invites the world to "catch up". Work is done by others than Google. Froscon 2012 5
  6. 6. Alliances vs the proprietary market leaders Market leader Open source as the proprietary 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. It's about control / independence IBM activity Against who To get access to Linux Windows, Solaris... Low end servers Apache Foundation ? httpd server Apache Harmony Sun Java JVM / JDK Eclipse Sun Netbeans Developers Apache Geronimo JBoss OSS J2EE, Wesphere CE Froscon 2012 9
  10. 10. Oracle vs Sun: Share of wallet Stack (1990's) 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. Sun The 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 Java Continues to "invest in innovation" the old school way, while giving away SW for free under FOSS licenses Solaris, SPARC, Java, OpenOffice, even MySQL, are all in house developments. Community participation problematic. CTO-level comment from Sun's biggest customer: "We are standardizing on Linux but we still allow Solaris only because you open sourced 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, Android This explains Google's investment in some open source projects: Mozilla: If everyone uses IE, they will use Microsoft's search by default. Microsoft's 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. Microsoft 2001: Shared Source, "Cancer" 2007: MS-RL and MS-PL Perens et al: "It's a trick, don't do it!" License proliferation Contributes to Linux in 2009. Top 10 Linux contributor in 2011. Contributes to Samba 2011 Froscon 2012 14
  15. 15. Actual MSFT internal slide. 2003 Froscon 2012 15 http://stephesblog.blogs.com/my_weblog/2009/09/open-source-business-tactics-in-one-slide.html
  16. 16. Microsoft: Outercurve foundation Codeplex. Microsoft's Sourceforge. 2006 Froscon 2012http://web.archive.org/web/20060525054710/http://codeplex.com/ 16
  17. 17. Microsoft: Outercurve foundation 2008: 2009 "Ramji sat down with Gates, chief software Outercurve Foundation architect Ray Ozzie, and a few others to discuss whether Microsoft could actually start License and tech agnostic using open source software. Ramji and Ozzie Legal Proxy were on one side of the argument, insisting that Microsoft embrace open source, and - IBM and Apache, Gutierrez offered a legal framework that IBM and Suse, Red Hat could make that possible. But other top - Google with OHA executives strongly challenged the idea. 2012 Then Bill Gates stood up. Wholly owned subsidiary He walked to the whiteboard and drew a diagram of how the system could work, from Legal proxy towards FRAND copyrights to code contribution to patents, obligations in standard bodies and he said — in no uncertain terms — that the company had to make the move." Qualcomm following http://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 and R&D cost FOSS provides a framework for alliances to attack proprietary market leader (Amazon, Microsoft, Google) FOSS products are promoted so that proprietary competitor/partner won't control key component of your stack (IBM, Google) Oracle: Share of Wallet Google: Protect the fortress Foundations shield companies from legal liability Froscon 2012 18
  19. 19. What does it mean for FOSS? Big corporations use FOSS as a weapon to beat each other in the head. (Or defensively as a helmet...) The good news: FOSS prospers regardless of their motives: 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. Sources Skyscraper: CC BY http://www.flickr.com/photos/rene-germany/28095903/ Sun: SCSL http://en.wikipedia.org/wiki/Sun_Community_Source_License SISSL http://weblogic.sys-con.com/node/128267 Fortress: http://en.wikipedia.org/wiki/File:Fortbourtange.jpg Microsoft: Shared Source: http://en.wikipedia.org/wiki/Shared_source Black 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.html Codeplex 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/1 Bill 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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