Welcome!

Linux Containers Authors: Liz McMillan, Elizabeth White, Pat Romanski, Stackify Blog, Leon Adato

Related Topics: Open Source Cloud, Linux Containers, Eclipse, Agile Computing, Release Management , Apache

Open Source Cloud: Article

Making Commercial Open Source Software

Delight customers and profit

I recently blogged about making open source software, and the high level steps for how to think about the process. We started with the need for software to seed the discussion, the need for clear motivation as to why to publish as open source software, and then the structural requirements to build a community (license choice, collaboration platform or forge, and governance considerations). Contributions are the life blood of any community, so lastly we talked about the need to build an onramp to encourage users that will hopefully become contributors, and the additional onramp needed to make it easy to contribute.

Rory MacDonald (@technocreative) challenged in the comments that there are substantial commercial motivations for a company to develop open source projects that go beyond a desire for collaboration, and provided a number of examples.  I completely agree, and I'd like to build on these ideas.

Why as a company (rather than as an individual) would you want to "make" open source?

Again we have two types of making to consider:

  • A company can contribute to an open source project that already exists.
  • A company can create a new open source project (either by publishing existing software or creating new).

If we consider a company making contributions to an "outside" project then we should do so from the perspective that this is an advanced case of collaboration where the open source project is being used in a product or service the company offers to customers for sale. Think Red Hat and using Linux to deliver Red Hat Advanced Server.  Otherwise, contributing to a project that is used strictly in-house pretty much looks like the discussion in the previous post -- it's about engineering economics and shared innovation and living on a fork gets expensive over time unless it can be balanced against the costs of maintaining a business advantage through secrecy (e.g. the way Google used Linux in the early days).

Participating in an external open source licensed project is a case of expanding traditional corporate thinking of "build" versus "buy" to include "borrow" and "share".  It's about time-to-solution if a company uses the project in-house and about time-to-market if the project is used to develop a product or provide a service to customers for sale.  One needs to remember as a company using open source licensed software in a product or service that the company exists to solve a problem and create a marketplace around the solution.  This is all about Levitt's observations about solving customer problems ("needing a 1/4 inch hole") over selling products ("the drill").  Red Hat wasn't "selling a Linux distro" but rather providing a professionally maintained and supported low cost PC-based server replacement for expensive proprietary UNIX systems on expensive proprietary hardware.

The interesting problems when using an externally developed open source project as a company are in understanding the flow of ownership of the intellectual property with respect to the software.  There are a couple of predominant concerns:

  • What legal risks are possible that need to be managed against a company's risk profile.  This should not be taken lightly.  Companies are more interesting legal targets than individuals.  Even if a company is using the software internally rather than in a product or service, there is still a risk profile to consider.  It's not that the risk is greater than purchasing a proprietary software solution from a vendor but one needs to feel comfortable that the externally run open source licensed project has appropriate IP management safeguards in place.
  • What intellectual property is being contributed to whom. Again, companies are often uncomfortable contributing their own hard won R&D investment to others (even partners) without crisply understanding the return.

As a company each of these legal concerns comes with additional legal responsibilities.  Open source software foundations provide solutions to these problems by providing neutral non-profit space in which companies can collaborate together, and backing the space with proper IP management practices. The Apache Software Foundation, the Eclipse Foundation, the Linux Foundation (né OSDL) and the Outercurve Foundation were all created to manage the risk around these software IP problems.

The discussion becomes interesting when a company considers creating its own open source licensed projects.  Rory's examples speak to benefits.  Let's start with the motivation again.  People are often very good at understanding their "gut" motivation for doing something.  The larger a company becomes the more thought and documentation needs to go into such decisions, especially once a company goes public.

If the project to be published under an open source license is "infrastructure" for the company, then the motivations are all based on shared innovation and distributed engineering economics. This is what we see with data centre-centric projects created by the likes of Amazon, Yahoo, Google, Twitter, Netflix, or the Facebook Open Hardware Initiative.  The company starting the project is sharing work in which they have invested time and energy in the hopes that others will join the project, use it in new ways thereby hardening the software and contributing at the very least bug reports, but also hopefully extending and evolving it.

When this is the motivation, all the discussion in the previous article comes into play around making open source.  Essentially, one needs:

  • Useful software as a base around which to build a community.
  • Motivation to share, credible expertise in the problem to be solved, and an understanding of the software structure to anchor the open source community.
  • The project needs to have the structural issues of license, forge, and governance decided, even if governance becomes an evolving discussion in a growing community.
  • The community needs to build a solid onramp to encourage use, and a second onramp for users to become contributors.  The sooner this happens in a project's life, the faster it can build a community.

The additional consideration to encourage corporate participation and contribution needs to be software ownership, legal risk, and IP management around the contributions.  This is where considering using existing open source software foundations comes into play.  Corporations are far more likely to contribute their software to a neutral non-profit for mutual benefit.

But as Rory points out, there are business motivations for creating open source projects as well.  A company's executives want to "increase business" but does that mean increase leads in the sales pipeline?  Or build a community of evangelists that firmly anchor the company's products and services while providing proof points and expertise to potential new leads.

Using free and open source software in a commercial setting doesn't change the nature of running a business. One needs to clearly understand that customers buy solutions to problems and what problem the company is solving. Geoffrey Moore demonstrated some time ago that companies offering the best "whole" solution win, i.e. a core product or service and all its complementing products and services around a more complete ecosystem. This has a lot to do with shaping a "complete" solution to account for the subtle differences that customers perceive they have around the problem space.  Successful companies essentially offer a portfolio of products and services and as long as the sum of the costs of delivering the portfolio is less than the sum of the revenues (spend less than you earn), the company is profitable. Taking a portfolio approach allows a company to play with their pricing models and differentiate themselves for customers against similar competitors.

Open source software can play a number of roles in such a portfolio approach.  A company can:

  • Sell support, upgrades, customization, training and "stability" to a product that is otherwise provided as an open source project. The best example is probably Red Hat "selling Linux" when it doesn't own the core IP.  The "product" isn't the software.  JBoss tried several of these approaches before their Red Hat acquisition.
  • Sell a core product (licensed as proprietary or open source) while encouraging an ecosystem of complements from partners around open source licensed projects.
  • Allow customers to try the "product" in its simplest form as a set of unsupported unwarranted binaries for "free", i.e. downloading the community/developer editions, to self-qualify themselves in the sales pipeline.  (This was very much how MySQL built both its businesses.)

These items all speak to the delivery of the product and the pipeline.  A company can also develop a community of users of the open source project that act as a source of expertise and experience for potential customers.

A community of developers and users is an essential piece of the whole solution. Some companies develop large successful communities without ever publishing their product software. IBM, Microsoft, Oracle, and SAP have all done this to great success. This is why community building is so important for your company and why community development is an essential ingredient in your solution pitch to customers. User and developer communities (regardless of open source):

  • Anchor customers both in an engaged relationship as well as from a technology perspective.
  • Create knowledge, expertise and experience necessary to provide a complete solution for the technology pitch to the customer.  These proof points are invaluable when potential customers are self-qualifying themselves and testing the strength of a solution's community.
  • Create advocates and evangelists to spread awareness about a solution.
  • Create enormous inertia in the status quo around a technology.

These variations all rely on remembering a couple of related "rules":

  • An open source licensed project is not a complete product solution for most people.
  • Project community users and developers are not solution customers.  Community members tend to have time to spend on a solution but no money while customers have money and are looking for time-to-solution and certain guarantees.

Creating an open source project can be as simple as publishing software using an open source license, and this gives customers insight into the workings of a solution.  But if you ignore community building activities, you're losing all the benefits that come from an engaged base of customers and users of your technology.

Clearly understanding the benefits of using open source licensed software for delivering time-to-market, providing a rich complement ecosystem, and enabling communities to anchor the ecosystem in place allows a company to set its motivations correctly.  One can discuss the investment in effort as a way to understand the motivation.  We can contrast the publication of the software as open source and the effort required to develop the community against the evolution of the commercial product in terms of investment and value returned.

This also allows a company to understand the problems with half measures.  Companies sometimes treat "open source" licensing as marketing pixie dust, instead of rightly understanding its place in the solution portfolio or the need to build genuine community that will lead to solving customer problems, and ultimately delighting said customers which can be measured in profitability.  They try to limit access and only approach community half-heartedly because ultimately they're unsure of the benefits.  Fully appreciating the benefits allows a company to fully engage with both community and customers to solve problems.

Rory also mentioned the use of open source projects to undermine a competitor's margins.  This is a level of competitive play by large complex companies in well-established markets that warrants its own blog post.  We save it for another day, and instead stay focused on the commercial positives of making open source software.

More Stories By Stephen Walli

Stephen Walli has worked in the IT industry since 1980 as both customer and vendor. He is presently the technical director for the Outercurve Foundation.

Prior to this, he consulted on software business development and open source strategy, often working with partners like Initmarketing and InteropSystems. He organized the agenda, speakers and sponsors for the inaugural Beijing Open Source Software Forum as part of the 2007 Software Innovation Summit in Beijing. The development of the Chinese software market is an area of deep interest for him. He is a board director at eBox, and an advisor at Bitrock, Continuent, Ohloh (acquired by SourceForge in 2009), and TargetSource (each of which represents unique opportunities in the FOSS world). He was also the open-source-strategist-in-residence for Open Tuesday in Finland.

Stephen was Vice-president, Open Source Development Strategy at Optaros, Inc. through its initial 19 months. Prior to that he was a business development manager in the Windows Platform team at Microsoft working on community development, standards, and intellectual property concerns.

@ThingsExpo Stories
Consumers increasingly expect their electronic "things" to be connected to smart phones, tablets and the Internet. When that thing happens to be a medical device, the risks and benefits of connectivity must be carefully weighed. Once the decision is made that connecting the device is beneficial, medical device manufacturers must design their products to maintain patient safety and prevent compromised personal health information in the face of cybersecurity threats. In his session at @ThingsExpo...
"We're a cybersecurity firm that specializes in engineering security solutions both at the software and hardware level. Security cannot be an after-the-fact afterthought, which is what it's become," stated Richard Blech, Chief Executive Officer at Secure Channels, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events announced today that Massive Networks will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Massive Networks mission is simple. To help your business operate seamlessly with fast, reliable, and secure internet and network solutions. Improve your customer's experience with outstanding connections to your cloud.
SYS-CON Events announced today that Grape Up will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct. 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Grape Up is a software company specializing in cloud native application development and professional services related to Cloud Foundry PaaS. With five expert teams that operate in various sectors of the market across the U.S. and Europe, Grape Up works with a variety of customers from emergi...
Detecting internal user threats in the Big Data eco-system is challenging and cumbersome. Many organizations monitor internal usage of the Big Data eco-system using a set of alerts. This is not a scalable process given the increase in the number of alerts with the accelerating growth in data volume and user base. Organizations are increasingly leveraging machine learning to monitor only those data elements that are sensitive and critical, autonomously establish monitoring policies, and to detect...
Everything run by electricity will eventually be connected to the Internet. Get ahead of the Internet of Things revolution and join Akvelon expert and IoT industry leader, Sergey Grebnov, in his session at @ThingsExpo, for an educational dive into the world of managing your home, workplace and all the devices they contain with the power of machine-based AI and intelligent Bot services for a completely streamlined experience.
Because IoT devices are deployed in mission-critical environments more than ever before, it’s increasingly imperative they be truly smart. IoT sensors simply stockpiling data isn’t useful. IoT must be artificially and naturally intelligent in order to provide more value In his session at @ThingsExpo, John Crupi, Vice President and Engineering System Architect at Greenwave Systems, will discuss how IoT artificial intelligence (AI) can be carried out via edge analytics and machine learning techn...
When shopping for a new data processing platform for IoT solutions, many development teams want to be able to test-drive options before making a choice. Yet when evaluating an IoT solution, it’s simply not feasible to do so at scale with physical devices. Building a sensor simulator is the next best choice; however, generating a realistic simulation at very high TPS with ease of configurability is a formidable challenge. When dealing with multiple application or transport protocols, you would be...
With tough new regulations coming to Europe on data privacy in May 2018, Calligo will explain why in reality the effect is global and transforms how you consider critical data. EU GDPR fundamentally rewrites the rules for cloud, Big Data and IoT. In his session at 21st Cloud Expo, Adam Ryan, Vice President and General Manager EMEA at Calligo, will examine the regulations and provide insight on how it affects technology, challenges the established rules and will usher in new levels of diligence a...
An increasing number of companies are creating products that combine data with analytical capabilities. Running interactive queries on Big Data requires complex architectures to store and query data effectively, typically involving data streams, an choosing efficient file format/database and multiple independent systems that are tied together through custom-engineered pipelines. In his session at @BigDataExpo at @ThingsExpo, Tomer Levi, a senior software engineer at Intel’s Advanced Analytics ...
In the enterprise today, connected IoT devices are everywhere – both inside and outside corporate environments. The need to identify, manage, control and secure a quickly growing web of connections and outside devices is making the already challenging task of security even more important, and onerous. In his session at @ThingsExpo, Rich Boyer, CISO and Chief Architect for Security at NTT i3, discussed new ways of thinking and the approaches needed to address the emerging challenges of security i...
SYS-CON Events announced today that Dasher Technologies will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Dasher Technologies, Inc. ® is a premier IT solution provider that delivers expert technical resources along with trusted account executives to architect and deliver complete IT solutions and services to help our clients execute their goals, plans and objectives. Since 1999, we'v...
There is only one world-class Cloud event on earth, and that is Cloud Expo – which returns to Silicon Valley for the 21st Cloud Expo at the Santa Clara Convention Center, October 31 - November 2, 2017. Every Global 2000 enterprise in the world is now integrating cloud computing in some form into its IT development and operations. Midsize and small businesses are also migrating to the cloud in increasing numbers. Companies are each developing their unique mix of cloud technologies and service...
SYS-CON Events announced today that IBM has been named “Diamond Sponsor” of SYS-CON's 21st Cloud Expo, which will take place on October 31 through November 2nd 2017 at the Santa Clara Convention Center in Santa Clara, California.
SYS-CON Events announced today that Datera, that offers a radically new data management architecture, has been named "Exhibitor" of SYS-CON's 21st International Cloud Expo ®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Datera is transforming the traditional datacenter model through modern cloud simplicity. The technology industry is at another major inflection point. The rise of mobile, the Internet of Things, data storage and Big...
SYS-CON Events announced today that Akvelon will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Akvelon is a business and technology consulting firm that specializes in applying cutting-edge technology to problems in fields as diverse as mobile technology, sports technology, finance, and healthcare.
WebRTC is great technology to build your own communication tools. It will be even more exciting experience it with advanced devices, such as a 360 Camera, 360 microphone, and a depth sensor camera. In his session at @ThingsExpo, Masashi Ganeko, a manager at INFOCOM Corporation, will introduce two experimental projects from his team and what they learned from them. "Shotoku Tamago" uses the robot audition software HARK to track speakers in 360 video of a remote party. "Virtual Teleport" uses a...
SYS-CON Events announced today that Datera will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Datera offers a radically new approach to data management, where innovative software makes data infrastructure invisible, elastic and able to perform at the highest level. It eliminates hardware lock-in and gives IT organizations the choice to source x86 server nodes, with business model option...
With 10 simultaneous tracks, keynotes, general sessions and targeted breakout classes, Cloud Expo and @ThingsExpo are two of the most important technology events of the year. Since its launch over eight years ago, Cloud Expo and @ThingsExpo have presented a rock star faculty as well as showcased hundreds of sponsors and exhibitors! In this blog post, I provide 7 tips on how, as part of our world-class faculty, you can deliver one of the most popular sessions at our events. But before reading the...
In his session at 21st Cloud Expo, Carl J. Levine, Senior Technical Evangelist for NS1, will objectively discuss how DNS is used to solve Digital Transformation challenges in large SaaS applications, CDNs, AdTech platforms, and other demanding use cases. Carl J. Levine is the Senior Technical Evangelist for NS1. A veteran of the Internet Infrastructure space, he has over a decade of experience with startups, networking protocols and Internet infrastructure, combined with the unique ability to it...