This document discusses commercial and open source software models and their interaction and impact. It notes that there is no single correct model for software development and that different models have produced best results through interaction. It provides an overview of major software companies and their approaches to open source software, including both participating in open source projects and commercializing open source solutions. It also identifies several open source projects and companies to watch that could disrupt existing software markets through open source competition and innovation.

1. Commercial & Open Source Software
Erick Watson
US Business & Marketing Organization
Microsoft Corporation

2. Separate Competition from the Discussion
Development Business Licensing Open
Models Models Models Standards
Role of IP, Economics, Public Policy…
Product Competition, Consumer Choice
VS.

3. Software Production
Academia Community Commercial
(traditional)
Governments
Hobbyists Competition Freeware
Industry Open Source
(Non-Software)
Functionality
IT Development Public Domain
Software Shareware
Vendors Intellectual Property
 There is no “correct” way to produce software
 Interaction of multiple models has produced best results
 Development model has little impact on production use

4. Commercial and Non-Commercial Software
Non-
Commercial
Commercial
Open
Commercial Software
Free
Commercial
Public
OSS
Tech Transfer
 >60K software companies producing >180K products
 Millions of apps custom developed by orgs for in-house use
 Tech transfer of R&D has been critical to software industry

5. OSS and Commercial Use
IBM Customer Red Hat
Apple Benefit CollabNet
SUN VA Systems
SAP Ximian
Software SuSE *
Oracle
Business Sendmail
Microsoft
Model MySQL
RealNetworks
Sleepycat
 OSS is positive influence for most major software companies
 Increased product and services competition benefits customers
 OSS vendors are directly commercializing their solutions
 Customer demand for value is still primary driver
* Recently acquired by Novell

6. Competitive Landscape
IBM
 Linux ($ + heads + OSDL + LSB = Control)
 Apache – Board of Directors, contribution, inclusion, leverage
 Eclipse – SUN compete, Java community strategic play, Websphere support
 ISVs – second “big bet”
 Hardware & Services – revitalize PPC, SUN compete, strengthen services
contracts
Red Hat
 “Winner” of Linux market consolidation
 Heavy commercialization – negative for community, positive for customers
 Not invested in OSDL or LSB – putting R&D into distro testing and ISV
integration
Novell
 OSS-O-Matic – acquired SuSE & Ximian
 Big question mark is execution and corporate culture integration
 Microsoft is their key target – not SUN

7. Competitive Landscape cont ...
SUN
 Desktop is focus - $ & heads in desktop and OpenOffice
 OSS putting extreme pressure on any commercial Java strategy
 Linux is a SUN server business threat
Intel
 Drive x86 success…and repeat – OSDL (carrier grade Linux focus)
 Tools to support ISV community
HP
 OSS project office - >200 projects in process
 Hardware – largest Linux hardware distributor, printers
 Legacy – migration path for HPUX community
SAP
 SAPDB – drive commodity into database market
 OSS investment minimal - $ + heads into My SQL and Eclipse only
Oracle
 Linux – commodity pressure in OS space drives down TCO for their solution
 Appearance of community involvement rather than heavy investment

8. Who/What To Watch
 MySQL – innovative business model, disruptive for Oracle
& MS
 JBOSS – disruptive for IBM, BEA & MS
 MONO - .NET on Linux
 SAMBA – NT4 implications
 Eclipse – OSS IDE, commodity pressure in tools space
 OSDL – Linus lives there, core Linux direction
 Black Duck (and similar) – not OSS, but implication for
litigious environment

9. www.microsoft.com/sharedsource
http://infoweb/sharedsource
http://linux
source@microsoft.com
© 2004 Microsoft Corporation. All rights reserved.
This presentation is for informational purposes only. Microsoft makes no warranties, express or implied, in this summary.