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September 2006
Experts voice

Open Source: the evolution of communities and business models
By Joe Alexander, Director Software Strategy and Chairman of the OSDL/DCL Steering Committee

Joe Alexander has worldwide responsibility for the software strategy of Bull’s NovaScale® product line and the product planning and strategic development of Bull’s GCOS® product line. In fulfilling this role, Joe has leveraged AIX®, Linux®, OSS and Intel-based technology to address the needs of the marketplace by working closely with customers, partners and industry consortiums. In 2004, Joe added to his current responsibility by representing Bull at OSDL (Open Source Development Labs) to accelerate the early adoption of Linux in the Data Center. In March 2005, Joe was elected to the Vice Chair position of the OSDL/DCL Steering Committee. In May 2005, he assumed the Chair position and was reelected in February 2006. Joe is also a Senior Faculty member as an adjunct professor at Keller Graduate School of Management.

 

Management Summary
Open Source Software (OSS) is transforming the way user organizations and suppliers view developing, integrating, and deploying software. The OSS development methodology began in 1974 with the first collaborative UNIX® and TCP/IP development projects under the BSD license. There is now an alliance between these libertarian movements and commercial communities. With OSS-based solutions now in the mainstream for Enterprise computing, a choice is there for consideration for those that develop solutions and deploy them around the world. Just like the historical PC and Internet revolutions, one must migrate through the myths fostered by those reluctant to participate. To assist you leveraging OSS to your advantage, let’s address certain questions.

 

What is OSS?
OSS is licensed software in which the source code is distributed with the product and the user is able to modify and redistribute derived works from this software.
OSS is not just a development methodology; it is a means for actually delivering the software and for the economic transfer founded on that methodology. Whether in R&D or end-user IT settings, the two primary adoption drivers of OSS are:
Control of destiny
Economic factors
Non-market forces such as governments are driven by these same factors to encourage/demand that OSS be considered and communities be developed within their geographical boundaries. OSS is all about community and collaboration within that community. These communities are characterized by democratic behavior.
There are four primary ways of creating value with OSS:
Lower licensing and operating costs
Collaborative Return on Investment (C-ROI)
Service economy
Complementary product impact
A key validation of these values in this the 21st Century is the active participation by large IT supplier such as Bull, HP, IBM, Novell, Oracle, SAP and Sun.

What are characteristics of successful communities?
Like-minded institutions/individuals with similar goals
Create a centrally managed, developed project for those institutions
The developed software does not create a competitive advantage
“Good enough” rules for initial versions
The economic sweet-spot is C-ROI
A democratic structure with accountability, expertise and participation by all
Process to ensure product maturity, longevity, and support
OSDL (Open Source Development Labs) is such an example of that structure within the Linux eco-system. It was founded in 2000 by seven global IT leaders that came together to address shared challenges in the Linux industry. Today it is supported by more than 75 members representing a global consortium of major Linux customers and IT industry leaders. OSDL is the sponsor of Linus Torvalds, the creator of the Linux kernel and is dedicated to accelerating the growth and adoption of Linux from enterprise to mobile computing. It is a nonprofit organization that provides state-of-the-art computing and test facilities available to developers around the world. With offices in China, Europe, Japan and the United States, OSDL sponsors legal and development projects to advance open source software as well as initiatives for Linux systems in telecommunications, in the data center, on enterprise desktops and mobile appliances. Bull is an active participant in the Data Center Linux (DCL) initiative and the members have chosen me to be the chair of the DCL Steering Committee.

During 2006, OSDL/DCL included the vertical industry of healthcare within its scope. On August 15, at LinuxWorld Expo in San Francisco, OSDL hosted the first ever open source event for the Health Care IT (HCIT) sector. The all-day event drew 90 attendees from across the HCIT ecosystem, including leading ISVs, systems and medical equipment OEMs, healthcare providers and standards organizations. The event goal was to establish a dialog which could ultimately transform the quality, efficiency and economies of delivering global healthcare. The event kicked off with a keynote address by Dr. Ken Kizer, CEO of Medsphere Systems Corp, titled “Open Source and Healthcare.” Dr. Kizer described the open source opportunity in healthcare and some of the major challenges facing the HCIT community. Another highlight of the day was the final panel session, titled “Building a Global Healthcare Open Source Community.” The panelists and audience engaged and together identified some of the key HCIT gaps that open source software could address, along with some specific actions that the OSS community could take to accelerate essential improvements in HCIT. It was my pleasure to be the host for this event, do a presentation, and host the final panel of the day. To view the LWE Healthcare Day program presentations, please visit OSDL Healthcare Day. Visit OSDL on the Web at: http://www.osdl.org/ .

Where is OSS being used?
Open Source Software is being used throughout the software solution stack (infrastructure layer, service layer, process layer) for enterprise computing. The greatest market penetration is at the infrastructure layer through web support, development tools, operating systems, security and databases since that is where initial OSS effort started. Effort has moved up the stack to now include integration and access software as part of the service layer to provide a more seamless view of computing and data. In 2004, many OSS business applications started appearing in the market.



What business models motivate suppliers?
The earliest business model was selling support and services around OSS. Companies like Red Hat (Linux), JBoss (Middleware), and Compiere (ERP) began as startups using this business model. Bull is also involved in this model as a contributor and integrator with several middleware solutions for Service Oriented Architectures (in cooperation with consortiums such as ObjectWeb and others). A popular one for new companies in the last several years is called mixed where the company uses on OSS code base with proprietary add-ons. Companies like Sourcefire (security) and SugarCRM (CRM business application) use this business model. Companies like MySQL and Sleepycat (databases) use a proprietary license for the OSS allowing users to modify and redistribute the source without having to make the code changes available to the public. This model is called OSS + Buy Off. Other companies have formed that assemble various OSS packages into integrated units that are easier for customers to consume. Companies like Exadel, Navica, SourceLabs, SpikeSource, HP and Bull use the OSS + Aggregation business model. Hardware makers use OSS as the foundation for the software that runs their machines. This OSS + Hardware business model is used by Cisco, Digium, Netezza and system vendors such as Bull, IBM and HP. Bull has leveraged this approach successfully in the HPC (High Performance Computing Model) market combining Linux, Lustre, NFS, and other solutions coupled with community collaboration. The best example is TERA-10, the N°1 European supercomputer and the 5th in the world that has been built by Bull for the CEA. Relying on Linux, TERA-10 uses 85% of OSS code, 10% of proprietary code (from partners), and 5% of Bull value added code, that has been returned to the community.
Last but not least, integrators increasingly make a strong use of OSS software components in the applications they build for their customers. The advantage: providing solutions that are both open and very cost effective. Bull, with its Open Energy service offer, is among the pioneers and the European leaders in this field.

What is the future for OSS?
It is often said that OSS does not innovate, it imitates. If one looks at the activity of some of the most prominent OSS projects (e.g., Linux, MySQL, PostgreSQL, OpenOffice, etc.) in use in the enterprise today, one might agree. Of course, this discounts that OSS has blazed a few trails that the proprietary solutions followed. The prime example is the Apache Web server. Market watchers say that 62% of all Internet Web sites run Apache today. Apache effectively created the market for Web server software and continues to lead the way. Its success was anticipating demand, providing stability, high performance, great security record, and desired features beyond its commercial competitors.
Experimenting the OSS methodology will continue to increase across the software industry by individuals and companies. One reason is because this development methodology allows a software product to grow organically. As Eric S. Raymond observed in The Cathedral and the Bazaar, “Every good work of software starts by scratching a developer’s personal itch.” When a group of developers begin to collaborate in an open fashion, each one scratching a unique personal itch, the result is software that expands to fill those functional areas not addressed by proprietary products.
The middle ground between OSS and Proprietary, called a “blended” strategy, will continue to grow, in which proprietary components get blended with or actively support OSS products. We see that today in the Java world with BEA, IBM and Sun Microsystems.
Linux and other OSS products will see much success in appliances much smaller than the servers and workstations that have traditionally been their focus. Appliance manufacturers have discovered that leveraging embedded software such as Linux, with its OSS advantages, allows for “competitive collaboration” and leaves time to provide competitive advantage higher up in the solution stack.
As the demand for secure software grows, so does the focus on using OSS methodology. As Microsoft users have found, the closed source model has not provided any additional protection and in reality is a magnet to the thrill seeker. A commercial product may have a Quality Assurance (QA) team of several dozen people, but OSS projects with a vibrant and growing community effectively have QA teams numbering in the thousands. As a result, a great many security professionals view OSS as being more secure than proprietary code and this impression is spreading.
To date, there has been nearly $1B of venture capital investment in OSS companies. Most new startups have raised reasonable amounts with over 50 OSS companies funded in the past few years. Much of this activity has been in the USA and Europe so far. The VC focus has been on:
Startups that can attack the large maintenance stream of incumbents
Incumbents have taken notice of startups in their marketing
Robust communities
Standards based solutions.
One should expect this VC activity to continue as the variety of business models mature. As with any industry segment, as the OSS continues its maturing cycle, merger and acquisitions will increase as seen recently by Red Hat buying JBoss and Oracle acquiring several OSS companies.

Conclusion
The question for CIOs and CTOs (users and suppliers) in 2006 is changing from “should we be using Open Source Software components and methodology” to “which ones should we use, as part of which architecture, over what kind of transition, using which selection, integration and support processes, and with which partners?” As a pioneer contributor, integrator and infrastructure solution provider, Bull is there for you as an architect of an open world. Enjoy the liberty you get with OSS!

More information:
Bull contributions to Open Source
Bull Open source middleware offering
Bull Open Energy Open Source services offer
Bull executive white paper on Open Source : the open source revolution

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