Success for Apache or for ASL?

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This is an add-on to my previous post…

Now this Spring acquisition is it really a big win for Apache as Matt says?  Or is it really only a (minor) win for the ASL license?  I would say the latter.  When has there been a business success story for any project hosted at Apache.org on the magnitude of the SS, JBoss, or MySql?  I don’t think the Gluecode guys or ServiceMix guys got much money.

This goes to an original point I made some time ago that Apache.org is a horrible place to build a business as Apache owns your brand.  I know that’s how they like it and to each his own.

SpringSource goes for 15M more

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Seems Rod isn’t immune to the typical startup hunger for cash. They raised another $15 million today. To put things into perspective, Jboss raised $10 million in 2004. When we got acquired in 2006 we had only burned through 5-6 million and that was after the Arjuna acquisition, building a new 2 floor office, and adding 150 people to the payroll. I’ve been at startups that burned through 10 million in 6 months then went out of business. I hope this is good news rather than bad news for the SS. Even though I do trash them every once in awhile, every professional open source success is good for the industry and inches the industry closer to an open source model.

Yahoo/Zimbra acquisition opportunity for Buni?

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Recently, I was browsing around reading about the possible Yahoo! acquisition by Microsoft.  One Washington Post article in particular talked about how Zimbra customers are spooked by the acquisition.  Zimbra is a commercialized open source mail server distribution that competes with Microsoft Exchange.   This got me thinking, Andy Oliver must be really happy right about now as it creates a nice opening and opportunity for his company Buni.  Buni was originally the JBoss Mail project.  I remember Andy 2 years ago presenting his project and business opportunity to JBoss’s technical board of directors.  Back then, it was pretty impressive what he and his project contributors had accomplished.  Since then, Andy left Red Hat shortly after the acquisition to pursue his entrepreneurial ambitions for his mail project after we failed to give him the support he needed to make it succeed at JBoss.  I can only imagine how much better his distribution has become since he was able to work on it full time.  I know they have some solid reference customers and a thriving community.

Radiohead and Open Source

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Let me preface by saying I’m an old man. I have never ripped and burned music CDs. I don’t have any music on my iPod (only TV shows and movies). And if you’ve read Why Angry Bill? you know that I don’t listen to music on the radio. So, if this blog is old news to you, then apologies.

Was on Google news today and saw discussion on the band Radiohead’s attempt to give away a free album with fans deciding how much they wanted to pay (if at all). The article said that only 38% of downloaders decided to pay anything and marked it as a failure. I was scratching my head at this. A failure? A disappointment? Are you bleepin crazy? I don’t know what the ratio is now, I’m out of the loop on such discussions, but pre-acquistion, I know JBoss’s percentage of paying users was something like 5%, and they got 38%? IMO, that’s a huge success! If JBoss had had that ratio of paying users we would have gone public in 2004 instead of getting bought-out in 2006. The article then went on to say that the band must average $1.50 per download to break even (they’re currently averaging $6.50 per download, pretty good margin!).

Most of the articles on the subject questioned whether the Radiohead model would work with smaller bands since Radiohead already had a strong brand and a fanbase of millions. I think the business model could parallel the evolution of an open source business model. Really, all it is is establishing a trademark and cross-selling your ‘free’ offering to what value-add you are selling.

In the beginning of an open source business, your main value-add is usually consulting and training. This is business that brings in easy revenue, but that you can’t scale effectively because of the amount of people that is required to drive this. For the music world, maybe a band could cross-sell on-site gigs. Yeah, maybe this is unrealistic to expect a fan to want to book a particular band, so something more creative is needed. Maybe the music download would require the fan to solely enter in their age and zipcode. Then the band could know where they are popular. For instance, if they were very popular in the Greater Boston area, they could call up nightclubs in the area and say “Hey, 100 people downloaded our album in Boston. There’s a good chance we’d be able to fill the place.” As the band gained a small following, this information could be used to drive up their fee.

Another way JBoss bootstrapped themselves was through documentation sales. At the height of this these sales totally funded the salary of Scott Stark, and subsidized the salaries of me, Dain, and Sacha. For a band, it could be as simple as selling a professional PDF of their song lyrics. Would you be willing to pay $1 for a printable PDF of your favorite band’s song lyrics? Then there is of course always band merchandise of t-shirts, mugs, towels, posters, etc. All this stuff is so easy and cheap to set up to sell online. We did it at JBoss.

The last step in the evolution of an pure open source business is selling subscriptions. This is where I’m at a loss of how a music band could push such an offering. There is always the possibility of going un-pure. Radiohead seems to be doing it by cross-selling their $80 dollar deluxe box set. JBoss did much of the same with JBoss ON. I know other open source companies are taking similar tacts.

All and all, it might be hard to break even on the Radiohead “honesty box” model for small startup bands, but there’s a lot of creative different ways I think bands could make money off of free IP. I really think open source business models could be applied to other forms of IP. It will be interesting to see how this evolves in the music industry and kudos to Radiohead for thinking out of the box.

Websphere Children’s Edition

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Its funny to see Novell re-hash a 10 month old press release that it is bundling Websphere Children’s Edition with Suse. My favorite quote from this newsclip is:

Users looking for more advanced features are steered towards paid WebSphere products, which offer more advanced features.

This is why we will never take Apache Geranium seriously.  As long as IBM is the major contributor to the project, they’ll never be interested in elevating Geranimo to the feature set of JBoss.   It will always be a hobbled platform.  This is why you should always read the fine print in vendor friendly open source projects.  If the project is dominated by a vendor which has a competing closed-source, expensive product, the project will never get anywhere.

Unbreakable Red Hat

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I’m angry again,

Came across Savio Rodrigues’s blog about whether Oracle would buy Red Hat and/or BEA. One particular comment is a very incorrect assumption, specifically Savio wrote:

By announcing Oracle Unbreakable Linux, Oracle has already proven that Red Hat doesn’t have a whole lot of technology that can’t be easily replicated. ….

Maybe Savio believes that Red Hat doesn’t produce any technology? JBoss aside, I used to think that Red Hat was just a packager and was surprised to find out this wasn’t the case. They are one of the biggest presences the Linux and FSF community. I was astounded by the kind of quality engineers Red Hat has in key positions in the OSS community.

Or maybe Savio believes what Larry believes, that since Red Hat is all open source based Oracle can steal whatever IP they want and that’s the end of that. I’m not sure either of them understands that professional open source runs on top of the same fundamentals of any other business. Brand, employees, management, happy customers, and ability to execute and innovate. Let’s face it, open source is a software industry segment. Only Red Hat has proven it can execute effectively in such a space. If you’re just going to “take Red Hat’s IP”, you still have to establish strong OSS community relations, you still have to have great engineers that know the software, productization teams that know how to take raw OSS projects and turn them into a product you can support for 5 years, you need sales people that know how to sell it, marketing that knows how to promote, management that knows how to deal with “freetards” and open source prima donas.

None of this means that Oracle can’t establish itself in Red Hat’s market, it just means that as long as Red Hat continues to execute and innovate they will still be the leaders. Over the years JBoss had to go through various crisis’s in order to grow up as a company, I remember myself panicking thinking we were done, it was over. Marc and Sacha, always the steady hands say, “just continue to execute and everything will be fine”. You know what? It was. When you see us stop being able to execute, then you can say we’re done.

Apache Business Model failure

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I recently read on TSS how Iona is rebranding their ServiceMix acquisition. This is what sucks about the Apache model. If you ever want to build a business upon an Apache project, you’d have to spend your own time and money to create your own brand. It begs the question, what did Iona get from purchasing LogicBlaze? Since they are rebranding ServiceMix anyways, why not just hire away great developers like James Strachan instead of ponying up all this money to LogicBlaze’s VCs?

Your only value as an Apache.org based business is your people and your customer list. This is why I would never ever start a project at Apache.org. They own the brand. Its harder for you to cross-sell without competition. Without a strong brand, what incentive does a company have to acquire your business as a whole? Why not just hire away your developers and sales people instead? Its hard enough to build a successful business with a brand, why make it harder by hosting yourself at Apache?

I’m not saying that Apache isn’t a great organization. It is in many respects. But as a OSS developer, you have to really think about the pros and cons before starting up shop there.

If you’re looking for a different opinion, Savio Rodrigues has some great contrary opinions on business effect of the Apache model both on companies and users. You’ll have to dig around in his archives though.

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