Open Source Overhang

As the last major frontiers of computing get settled (* see note at bottom), there is a lot software and system vendors of what I call near misses or got brutalized or Open Source overhang. These are products that are not going to find a niche and be able to survive with small revenues but modest profits. Neither are they going to get bought out by the surviving big boys. And all the opportunities to deploy into adjacent markets or new directions may just not fit on their balance sheets. Let me assure you there are a lot ofcompanies with software products in these categories. BEA and Sun are two notable examples. So these companies and their still valuable software packages may become true Open Source Overhang.

Take IBM and BEA for examples. In the highly commoditized basic Web Server marketplace IBM decided that entry level Websphere just could not generate enough revenues – so they have given away for free Websphere Application Server Community edition as an Open Source package of absolutely reliable Apache + Eclipse + Derby database components with very solid getting started support. This gets customers used to the IBM family of products and hence easily channels them towards paying software such as the Rational and Enterprise Websphere line of products.

Ditto for BEA which has made BEA WebLogic Workshop available as the Beehive Open Source project. Which has in turn been adopted for inclusion into Eclipse. Beehive and other BEA Open Sourced projects lead users toward the high end tools that BEA wants to sell. The benefits to BEA and IBM are 3 fold:
1)customers can become familiar with their entry level software at low, no cost;
2)they get the software maintained and extended at low cost;
3)customers learn the basics of operating and developing with their software with community support including their own staff that may have been disaffected if the software had just been discontinued.
The community profits because it has low cost access to basic functionality which it can assess with access even to source as required. In addition, there is a baseline place and community to go to to resolve problems over and above any support the original company may elect to provide.

Now Sun has taken this to the logical extreme- Open Sourcing complete software systems with Solaris, NFS and now Java. Here the benefits to Sun are downstream hardware commitments (and therefore survival of its UltraSparc line) in the case of Solaris and its Java Applications Suites in the case of Java.

But imagine what others, brutalized by the Big Boys in the marketplace might do. Take the BI vendors. Microsoft mainly, but Oracle and IBM too, are cutting off the oxygen to these vendors by giving away major free BI components with their database software. The Big Boys know that they will make up in database sales what they lose in BI component revenues – and … heh heh heh … too bad, the BI vendors dont have any free databases to give away with their products. But the BI can consider doing an IBM Open Source – make available entry level components of their BI with free databases like MySQL and PostGresSQL, sell optimized connectors to IBM, Oracle and Microsoft databases for 1/2 or 1/3 of the original software price along with the rest of their BI software mix.

Finally, a number of companies may have been left for dead by Microsoft [think Windows Accounting, desktop Project management, OS utilities , etc, etc] and the other Big Boys. In this case , as appropriate, software vendors may want to use free or Open Source as a way to launch into a new business and as small revenue take aways [no revenue add-on opportunity for the Big Bad Boys]. But the biggest gain may be that more developers, developers, developers are contributing to and selling not just their Open Source software and projects; but the broader Open Source approach. So then integrating Open Source projects like Eclipse, Pentaho and XAMPP/WAMP start happening more often.

(c)JBSurveyer 2006
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PS: Note=>Harvards Nicholas Carr may have been half right – commodity pricing and maturing technology is making now very substantial markets such as Office Suites or desktop OS or entry level databases become likely very small or Open Source markets in the near future. This means, as Carr said, commodity pricing and substantially less revenue weight. But to brand the complete IT as going the way of the Commodity Dodo is at best facile. As IT computing continues to not only roil/disrupt massively, but also expand diversely into every nook and cranny of our economies and societies, one can hardly say that IT does not matter. Or even it is dangerous to suggest that IT is diminished because businesses and innovators everywhere are finding new ways to deploy chip intelligence and memory into their products and services at an almost alarming rate. In fact, this suggestion misses the moment => the Zeitgeist of our times is that Computing Machines are Making a Ghost of Humanity. Frank Herbert may yet see his 11th Commandment come to pass – Stem Cell Research is just one