Wednesday, February 25, 2009

Open Core Model Offers Best Opportunity for Community and Commercial Success

I am classically the pig at the ham and egg breakfast when it comes to the debate about the open core business model. The chicken at the breakfast is involved. The pig is committed. With that as my admitted bias, it's time for me to weigh in on the debate that has ensued around the open core business model.

“Open Core” was originally offered by Jaspersoft’s Andrew Lampitt as a new term to define the commercial open source software model that relies on a core, freely available (e.g., GPL) product architecture that is built openly with a community, all the copyrights for which are owned by the sponsoring vendor, and which includes premium features on top, wrapped entirely with a commercial license. T he 451’s Matt Aslett quickly used Andrew’s open core definition and relies on it within his most recent reports and articles. I would enhance Andrew’s definition by adding Jaspersoft’s current open core ideals: the core product is extended with commercially licensable add-ons (and those contributions come from Jaspersoft or its community), each extension comes with visible source code, community collaboration is encouraged (including feature “voting”) and we, as hosts of the community, actively monitor its health and vibrancy to ensure constant progress.

Roberto Galoppini properly infuses a heavy dose of being “community-driven” as key to any open source model. I agree and will expand below. Mat t Aslett recently re-stated his distinction between open core (he calls it “hybrid” in this recent post) and the embedded open source model. Matt believes the embedded model possesses long-term advantages and lower risks, which I think depends mostly on which open source product / project is embedded. And, a good bit of debate has ensued that seeks to label companies using the open core model as not substantially different than proprietary software companies. I believe this is nonsense as the distinctions between the open core software companies with which I’m familiar and traditional software companies are stark. To explain, I’ll cite my three primary reasons the open core approach provides the best opportunities for community and commercial success.

1. Community involvement in the core code is encouraged, while community “extensions” are not only plausible, but probable. The product “core” is built collaboratively with the Community and a non-restrictive license (e.g., GPL) ensures a variety of appropriate uses. A successful open core model should deliver a core (free) code base that is both substantial in its capabilities and successful in its Community.
2. Commercially-available extensions, a superset of the core and ideally with visible source code access, are provided, thus creating the value and assurance commercial customers often require to sign a commercial license. These extensions are made far more valuable because of the community-focused core code base acting as the underlying foundation.
3. The Community needs a healthy and growing group of Commercial customers to both legitimize the open source code base and ensure necessary financial success so the on-going advancement of the products / projects are assured. And, Commercial customers need the Community for the breadth of ideas and energy they represent, which helps the complete code base advance more rapidly and with higher quality than it ever could otherwise. Thus, the Community and Commercial customers form a necessary and symbiotic virtuous circle.

In this debate, some have claimed the only true and legitimate open source model is to provide identical community and commercial editions of the source code. The argument is that relying exclusively on services and support revenue will sufficiently sustain and that creating commercial extensions renders an open source company no different than a proprietary software company. Minimally, this argument misses a valuable history lesson. Most major software categories where open source has positively disrupted have required successful commercial open source companies to eventually use a model similar to open core, in order to continue growing. Think JBoss, Linux (Red Hat Enterprise Linux, Novell/openSUSE), SugarCRM, Hyperic, Talend, and of course, Jaspersoft. Done properly, the resulting broad use yields benefit and value to both the Community and Commercial customers. Accordingly, we at Jaspersoft take our community responsibilities as seriously as any commercial contract.

The pure open source model will continue to democratize software development and yield some commercial success. But to truly disrupt software categories where proprietary vendors dominate (and to deliver large new leaps in customer value), the open core model currently stands alone in its opportunity to deliver community progress and commercial success.

Brian Gentile
Chief Executive Officer

Friday, February 13, 2009

U.S. Government Should Consider Open Source

What good could an open letter to the President of the United States do, you ask? Perhaps, it could do a lot. Our new president has already demonstrated keen interest in technology and efficiency (the now infamous “secure BlackBerry” in his possession is one piece of evidence). In fact, President Obama is citing the U.S. healthcare delivery system as an industry in dire need of efficiency through improved technology and automation. He recognizes that the U.S. Government can play a keen role in creating the long-awaited electronic patient record. Amazing, isn’t it, that your car’s service records are far more organized and accessible than your vital medical information?

Led by the Collaborative Software Initiative, an
open letter to the new Commander-in-Chief went live on Tuesday, February 10. I signed this letter, along with a wide number of fellow open source CEOs and executives, including colleagues at Alfresco, Ingres, Hyperic, Talend, Compiere, MuleSource, OpenLogic, Unisys, and just recently, Red Hat. My hat’s off to Stuart Cohen and David Christiansen at the Collaborative Software Initiative for spearheading this dialog with Mr. Obama. The tenets of the letter are well aligned with the advice I offered our next president in my early November blog post.

Because I encourage far more efficient use of my tax dollars, I want our Government to consider open source software products in every category they are available. I agree with many of those
who have engaged in a dialog about this letter since its posting, especially Mr. Christiansen when he said: “I don't want to mandate everything the government does should be open source.. I think software should stand on its own merits, but I honestly believe that one of its merits should be the sourcing of the software, the way it's built and who owns the technology."

I’m proud of the traction Jaspersoft has made in helping government customers spend less and get more. Here’s to hoping this open letter is heartily considered, in the Oval Office and throughout our nation’s government.

Brian Gentile
Chief Executive Officer

Monday, February 2, 2009

2009 BI Market Prediction #4: Consumerization of Information

I’ve saved the best for last in my four-week series of BI Market Predictions. This prediction introduces ideas and evidence that make the impact of my first three predictions (my last three posts) short-lived by comparison. Simply put, enterprise information systems will require a simpler, more consumer-oriented approach to appeal to the younger generation of up-and-coming workers, a concept I call the "consumerization of information.”

The facts are clear: the evolving workforce and its expectations for software, which will drastically transform software development and usage, especially in the enterprise software market, is underway. The consumerization of information is based on a very real workforce demographic shift that becomes even more pronounced starting in 2009. As the aging workforce in the largest economies continues to retire (in the U.S., it’s the baby boomer generation) and more young workers enter and climb higher, we’ll see a widening gap (I call it the “expectation gap”) between the expected behavior of enterprise applications and their actual behavior.

Younger workers have grown up with computers and, by and large, the Internet. They’ve never NOT been connected. Therefore, their expectations for how software systems should behave are vastly different from an older worker who has grown into computers and software during the course of his career. My favorite example is a personal one. One evening, while helping my 14-year old daughter complete her science homework, which meant graphing her results data, printing, and pasting on to a poster, I experienced first-hand this prediction. She and I were both frustrated trying to label an Excel chart properly. Rather than persevere, my daughter went to Google, searched for “free graphs,” brought up a very simple web page (web service) that allowed her to enter her data and click “Graph It!” It produced a perfect pie chart, which she copied, pasted and printed. She was done in seconds.

Therefore, those software vendors that design products that work according to the new web principles will fare well with this younger generation of workers. Those software vendors that do not will become less relevant. While the effects of the consumerization of information will have a big impact on BI tools in 2009, they’ll compound each year thereafter – as more baby boomers retire and more Gen X and Gen Y workers replace them. And, although my example here focuses on the United States, this same demographic phenomenon will play out similarly in most of the major economies over the course of the next decade.

I’m often asked to predict which software vendors will gain advantage as a result of the consumerization of information and which will fall aside. So, I’ll turn this question to you . . . who do you believe stands to gain and lose as the workforce landscape shifts?

Brian Gentile
Chief Executive Officer