Froscon 2012 1

How big corporations play the open source game

Henrik Ingo

Froscon 2012

Froscon 2012 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 of Open Source"

www.openlife.cc

http://openlife.cc/blogs/2012/july/cloudstack-has-proof-foundations-way-create-foss-community

henrik.ingo@openlife.cc

Froscon 2012 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 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 goodoff the shelf is good

This strategy is well understood in the community

Froscon 2012 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 6

Alliances vs the proprietary market leaders

Market leader proprietary

Microsoft

Google

Amazon

Open source as the framework for alliances

Linux

Hadoop

OpenStack

Froscon 2012 7

IBM (1998)

What does IBM sell?Servers?

Operating systems?

SW: Databases, J2EE, Middleware, Tivoli...

Integration?

Solutions?

C-level consulting?

Answer: IBM sells "everything"

Operating systems 1998:

Windows

Solaris, Digital Unix, HP Unix...

AIX

Mainframes

Growth

Froscon 2012 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 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 10

Oracle vs Sun: Share of wallet

Stack (1990's)

Sun Solaris (bloody expensive)

Oracle Enterprise (bloody expensive)

Weblogic or Websphere (bloody expensive)

New stack (1998 -> )

Red Hat Linux (cheap, once upon a time)

Oracle Enterprise (bloody expensive)

Weblogic (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 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 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 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 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 15Actual MSFT internal slide. 2003

http://stephesblog.blogs.com/my_weblog/2009/09/open-source-business-tactics-in-one-slide.html

Froscon 2012 16

Microsoft: Outercurve foundation

Codeplex. Microsoft's Sourceforge. 2006http://web.archive.org/web/20060525054710/http://codeplex.com/

Froscon 2012 17

Microsoft: Outercurve foundation

2008:

"Ramji sat down with Gates, chief software architect Ray Ozzie, and a few others to discuss whether Microsoft could actually start using open source software. Ramji and Ozzie were on one side of the argument, insisting that Microsoft embrace open source, and Gutierrez offered a legal framework that could make that possible. But other top executives strongly challenged the idea.

Then Bill Gates stood up.

He walked to the whiteboard and drew a diagram of how the system could work, from copyrights to code contribution to patents, and he said — in no uncertain terms — that the company had to make the move."http://www.wired.com/wiredenterprise/2012/01/meet-bill-gates/

2009Outercurve Foundation

License and tech agnostic

Legal Proxy- IBM and Apache, IBM and Suse, Red Hat- Google with OHA

2012Wholly owned subsidiary

Legal proxy towards FRAND obligations in standard bodies

Qualcomm followinghttp://news.cnet.com/8301-10805_3-57413395-75/microsoft-folds-interoperability-team-into-open-source-subsidiary/

Froscon 2012 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 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 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.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/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/