Do we need a FAIR TRADE label for commercial Open Source?

We all know, it’s not that easy to make money with Open Source. While Open Source has proven to be a great marketing (and distribution) tool, the implementation of Open Source based business models that are both profitable and scalable, have proven to be difficult. If you can’t sell the software you are missing an important revenue generator of traditional software companies. To compensate for this many commercial open source companies have created so called “enterprise versions” of their software, in most cases sold under a non-open-source license in subscription form. Enterprise version typically include additional features important to large companies – LDAP integration is one of the most common ones – and come with additional service packages such as extended compatibility testing, maintenance or support. – So far so good. But the license models applied can be very restrictive sometimes, asking for the rights on all modifications and developments done by the client for example. In the worst case this could mean that if a company decides to no longer pay for the subscription, the future use of the software installed is no longer permitted and all code developed or changed has to be shipped to the software provider. This is clearly far away from the ideas driving the Open Source movement. And of course many of the commercial Open Source companies apply a much more “free” model. So, maybe we need a FAIR TRADE label to separate the “good” ones from the “bad” ones? You may want to say that Open Source as such wanted to make this distinction already. But as we see there’s constant evolution and some of it may not show into the right direction.

Industry specific Open Source Business Solutions offer billions of savings

There has been a discussion for quite a while on whether there are good open source business solutions out there and to what extent these projects could replace proprietary software solutions. It clearly seems that it’s quite industry specific on whether you can find such sollutions or not. The telco industry made some efforts, but the most visible results clearly seem to come from the public sector, namely government solutions. In a recent announcement Blackduck highlights the value of open source technologies in the health care industry. Since Obama announced that he wants to push open source in this field, the interest is high of course. Blackduck estimates that the identified 800 health care open source projects represent a value of roughly USD 6 billion – or 31’000 staff years of work. That’s quite impressive. Even if not all of this is top class software and even if it doesn’t fit specific needs in a given country or context, this is a highly valuable knowledge and code base to start to work from.In the past we haven’t included a lot of industry specific software in EOS Directory despite the fact that we ran across quite a number of very useful technologies. We may need to change that decision.

Open Source companies are the more innovative marketeers

When you look who is pioneering innovative new marketing approaches and technologies you will often find Open Source companies being on top of the list. That’s not by accident. Open Source companies have much less budget to promote their products compared to their traditional commercial competitors. So they are forced spend the money wiser and come up with new and better ideas. If you look for example at the reference lists of marketing automation SaaS platforms such as Marketo, Market2Lead, Silverpop, Loopfuse or Eloqua you will find many Open Source company on these. Sadly enough there’s no really usable open source technology out there to do marketing automation despite the fact that some of the mentioned SaaS players do actually use Open Source technologies to quite some extent. But that’s maybe a niche to be filled by somebody? Anyway, Open Source companies are not only leading when it’s about applying marketing automation but also along other modern techniques such as content syndication, leveraging SlideShare, YouTube, Twitter or social networks such as LinkedIn and Facebook. So if you are looking for good ideas on how to do marketing, many Enterprise may be well advised to look at how Open Source companies do these things.(Comment: For our German language visitors interested in innovative web marketing techniques and approaches there’s a good introduction white paper available. For the English speaking audience the SaaS vendors mentioned above do provide good information)

Do Enterprises bother too much about legal issues around Open Source?

Enterprises are quite worried about Open Source license models and potential legal issues. I have been talking to companies that claimed to not use any GPL type software because of the viral nature of the license. Others have decided to install complex processes to make sure that every license is understood and all consequences checked. Do Enterprises bother too much here? Many probably could take it a bit easier given that most use is really use, very few companies actually alter the software they download. And even if they did, it still wouldn’t be an issue as long as the software is not redistributed. There may be situations in international companies with many subsidiaries and legal entities, where “distribution” could become an issue even inside the enterprise, but this occasions are rare and shouldn’t be the reason for banning GPL. Many companies are also afraid to publish software (or software changes) because of the potential liability claims, but there are ways around this too. So, if your Enterprise doesn’t use Open Source for purely legal issues, it may be right to ask a second (or third) time before giving in.

Consolidation in the Open Source Directory landscape

SourceForge is acquiring Ohloh. Two of the largest and most prominent Open Source directories go together. That’s good and bad, as always. Ohloh has followed many innovative paths to generate interesting data and information around open source projects. They picked Ruby on Rails as their programming environment and probably were one of the show cases for Ruby with this. They had open APIs very early. I liked what they were doing a lot. SourceForge on the other side is sort of the father of all Open Source directories. They were very early and probably the most complete directory of them all. Bringing the two together could be an opportunity but also a bit of a threat, especially to Ohloh. Will they be able to continue to innovate? We will see.For EOS Directory this recent acquisition doesn’t really mean a big change. While both SourceForge and Ohloh tried to cover pretty much the whole space of Open Source EOS is very focused on the most enterprise ready technologies and on the Enterprise user.

Has Open Source really won?

The Economist has posted yesterday that “open source software has won the argument“.Others, for example Matthew Aslett expanded on this thought and asked additional questions, i.e. where to go from here.In my eyes this is not really about war and winning, it’s more about finding a well thought through co-existence of proprietary and Open Source software. It’s about industrializing software production, i.e. making the development process more effective and efficient. And it’s about broadening access to good software for everybody. There are good reasons for inventors and clever engineers to publish their work as proprietary software and generating some return for their hard work. And there are good reasons for opening commodity technologies and for leveraging the distribution power of the Open Source approach. I always stated that the future will bring co-existence of both worlds and this seems where we are heading too. Good for us.One caveat though: As it has recently been discussed there is still often no fair competition between commercial vendors and Open Source solutions. The case of Switzerland where a big Microsoft deal was closed without even looking at (Open Source) alternatives is an example. So, maybe the “war” is still not won?

Open Source for Enterprises – who does the work?

Enterprises are used to purchase software following a standardized procurement process. This process is supported by commercial vendors by supplying information, answering RFPs, sending materials, providing free support, delivering proof-of-concepts. etc. When an Enterprise turns to Open Source, many of these things are not granted anymore, especially when you are dealing with community supported software. The illustration below compares a typical Open Source community, a commercial Open Source vendor and a traditional commercial software vendor along the services typically requested by enterprise.

Enterprise Open Source - who does the work?

What can be easily seen is that Enterprises must change their attitude a lot if they really want to deal with true Open Source communities. As not all of the Enterprises are willing to do so, an interesting market for “commercial Open Source” vendors has been enabled. These commercial Open Source vendors such as SugarCRM, Alfresco, SpringSource, etc. close the gap between what a traditional commercial vendor is offering and what a community is able to do. It comes with a price of course, but still is very attractive, especially when Open Source elements and commercial elements are combined in a good way.

What makes an Open Source software Enterprise ready?

EOS Directory is all about Enterprise ready Open Source software. And of course we have documented our criteria for the individual ratings on this site. But let’s take on step back and rethink what makes a project/software actually Enterprise ready. Of course different companies have different opinions but there’s quite a bit of consensus what is important:

  • The software must be of high quality, reliable, scalable, etc. So all (most) of the traditional qualities must be fulfilled. That’s all about software engineering.
  • There must be enough usage of the software to “guarantee” survival of the technology for the foreseeable time
  • The software must be well documented, both in separate documents as well as in the code. There are companies who only use Open Source software, if there’s at least a book published on it
  • There must be a vibrant community of a significant size behind the software. In some cases this community may be replaced by a company that would have to fulfill at least the minimum criteria in terms of size and financial viability. Here Enterprises are often forced to make compromises.
  • The community (or company) governance is transparent and state-of-the-art methodologies, approaches and principles are applied when developing and maintaining the software. Many enterprises love the Apache Foundation for its strict set of rules here.
  • There should be at least some market for professional support and integration services around the project. Ideally this market is where the Enterprise using the software is situated.
  • The software is written in a programming language and using components and frameworks that are long term viable and ideally a standard in themselves. Many enterprises prefer Java based open source software and there are some where PHP is a no go.
  • The license model applied is compatible with Enterprise usage and allows for enough freedom to not restrict the Enterprise in its development and business strategies.
  • The functionality and features must be good enough to meet Enterprise standards. This includes security features, user experience and everything else you expect from software.

These criteria are representing quite a high bar and many Open Source project probably would fail in one area or the other. It’s though much easier to make a compromise when you can influence the roadmap or even the software itself. And here’s a true advantage of Open Source against proprietary software that by the way should meet most of the same critera and doesn’t in many cases.