Open Source Commentary from Navica's CEO,
Bernard Golden
October 2007
In This Issue
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The Future of Open Source
The Future of Open Source
Over the past couple of months, I’ve started to see
open source begin to really take root in IT organizations.
Most of them have implemented open source on an ad hoc basis
– in other words, outside of the usual IT processes
and controls – and seen excellent outcomes: quicker
implementation, high-quality support, community sharing, and
far lower prices.
As a result, a number of IT organizations I’ve spoken
to are now moving to formalize their open source use; they’re
integrating it into their everyday processes in order to manage
it as an important part of their standard operating environment.
Frankly, it’s taken longer than I expected –
I always assume people will grasp implications more quickly
than they do. It’s just the way organizations work,
I guess. But having seen the beginnings of this movement,
what should we expect the future of open source to look like
– what will the IT world look like after open source
becomes standard operating procedure?
Here is what I think we’ll see:
Islands of Legacy Apps Surrounded by Oceans of Open
Source
Nobody is going to yank out what’s already in and working
– especially if they’ve spent years and millions
finally getting it right – especially given the fact
that humans, once having put effort into something, are reluctant
to recognize a mistake and move to another alternative. So
legacy apps will stay, and legacy vendors will continue to
cash their maintenance annuities.
The glory days of proprietary apps are long gone, though.
The starkest evidence is Oracle’s continued buying spree.
Consolidation is a strategy based on improving financial results
by removing costs, and Oracle’s behavior communicates
clearly that they believe all that’s left is recarving
a fixed-size pie.
However, just because Oracle and its ilk cannot succeed in
tomorrow’s IT environment doesn’t mean that the
use of IT has crested: Far from it. As the move to cheaper
hardware and virtualization (more on that in a moment) continues,
more and more software will be consumed. It will just be cheaper
and delivered without the proprietary package trappings. And
it will all be based on open source. The result: legacy apps
continue into the future with open source engulfing them.
Take This Ticket to the Cash Register and Someone
Will Bring Your PC Out From the Back
What will the software industry look like post-engulfment?
For a vision of the post-open source software world, a look
at the history of the PC is informative. Twenty years ago,
PCs were expensive. Stores had experts on staff who offered
insight and advice. Then PCs got cheaper – lots cheaper.
Today you go to Best Buy and heaven help you if you need anything
beyond basic (and I mean really basic) information. The complaints
about Dell’s service degradation are legion. However,
these changes are an obvious result of the fact that there’s
less money sloshing around the PC channel. Of course, there
are many sources of information about PCs available, particularly
online. I get a weekly newsletter called Extreme Tech, which
has excellent articles and benchmarks – but I still
have to be enough of an expert to figure it out for myself.
That’s the future of IT. With less money sloshing around
the software world, vendors will do less hand-holding. IT
shops will need to self-educate about the important technology
developments. And, by the way, with less vendor money available,
other parts of the technology marketing ecosystem will get
less, too. That means less analyst- and PR-generated marketing
(I know it gets presented as objective research, but everyone
knows it’s fueled by vendor dollars).
Consequently, IT organizations will need to develop new sources
of information, either internal or external, and will need
to pay for it directly. Overall, they’ll need to get
smarter. One possibility to replace the traditional “free”
sources of information (i.e., analysts, etc.) will be for
IT organizations to collaborate on research and experimentation
as a way to reduce individual costs.
I Build the Foundation, and You Just Drop a Prefab
House on It
Today houses are very nearly custom-built from the ground
up. Even though contractors work from plans, the house itself
is constructed on site – and every house is done as
a one-off. Prefabrication is starting to take hold, where
the site-specific work is confined to the foundation, and
pre-built modules containing walls, wiring, plumbing, and
so on are snapped together on top of the foundation. Just
as the assembly line vastly reduced the cost of manufacturing
an automobile, so too does prefabrication for housing.
The IT analogy of this world is that the future IT organization
will create a stable, scalable infrastructure containing common
services like network connectivity, identity, and security,
and pre-built applications will be dropped onto the infrastructure.
Instead of calling these pre-built applications modules, we’ll
use the fancier term virtual appliances.
Virtual appliances will drop the amount of tedious IT activity
by a huge amount. All of the installation and configuration
of software components necessary to get an application up
and running will vanish since it will all be done by the appliance
creator, which is the real expert in installation and configuration
of their application.
To echo last month’s newsletter, the virtual appliance
world will be a world that glories in wasting software –
computer processing will be applied in any useful context
rather than being rationed by capital and labor availability.
Your Car Dealer Makes More Money on Service than
on Selling Automobiles
The average new car dealer, in some sense, uses new automobiles
as a loss-leader as a way of forming a service relationship
with the customer. The cost of ongoing maintenance serves
as a steady revenue stream for the dealer. Overall, car dealers
have transformed their businesses, moving from individual
high-ticket transactions to a higher-level ongoing value delivery
business.
That kind of model is how IT vendors will make money in the
future. Rather than selling expensive infrastructure software
in one-off transactions, they’ll make money by offering
services or applications that run on top of the infrastructure.
And the value of these services or applications will be far
higher to the user.
These new offerings will take two forms. The first will be
services to help make the cheap, open source-based infrastructure
perform more efficiently. As an IT user, I will pay not for
access to the product, but for making the product run well,
a goal which can easily be tied to business metrics. In my
view, this offering will be well beyond today’s typical
open source offering of support subscriptions. This offering
will be more akin to the vendor taking responsibility for
running the infrastructure, rather than merely helping the
user in his efforts to run it.
The second form of offering is even more interesting. Because
there will be no shortage of software infrastructure, and
budget won’t be tied up in proprietary infrastructure
products, money will be available to fund new software products
that run on top of the infrastructure. These applications
will be (naturally) delivered as appliances, and will be business
benefit-oriented.
Both forms will be money-spinners. I refer to the shift in
software business opportunity as “the migration of margin,”
meaning that infrastructure margin is heading downward (save
for legacy implementations, which, as already noted, are high-margin
annuities; nevertheless, there is little high-margin new opportunity
in the future), but higher-level services will offer great
opportunity for margin.
It’s a Virtual World
Already mentioned, but worth repeating: virtualization is
going to transform both the software industry as well as the
world of IT. Installing applications goes from days filled
with frustration and swearing to mere minutes. No more trying
to figure out cryptic documentation. Up and running. Magic.
It goes much further than that, however. Virtualization offers
the ability to shunt virtual machine images around the network,
executing them wherever spare machines cycles are available.
Virtualization also offers the ability to fail over virtual
machines when hardware fails.
In ten years we’ll look back on the old labor-intensive
mode of software installation like our grandparents looked
back on operator-assisted long distance dialing: a wistful
nostalgia combine with gratefulness for having moved on. And
guess what? Virtualization is going to be driven by open source
or by software given away for free, forced to zero price due
the competition offered by open source products.
Gee Grandpa, How Bad Were the Old Days?
I’ve referred to the coming IT world as a time of post-scarcity
software. Up to now, we’ve had to ration our use of
software, but open source converts software from a luxury
good to a commodity.
We can’t even imagine where this will end up, but if
you want a peek at software’s future, take a look at
another mode of publishing: music. That industry is going
through a protracted convulsion as digitization makes music
universally available. The established order has its hands
clenched onto digital music, trying to prevent it from breaking
free, all the while overlooking the fact that digital music
offers the opportunity to make music available so many more
places and in so many more ways that the opportunities are
unlimited – but only if the incumbents stop confusing
their businesses with the future of music.
Packaged software will go through its own upheaval as established
players attempt to keep customers imprisoned in outdated business
models. From the outside, this transformation is invigorating;
from the inside, it’s hellish – but inevitable.
The great thing is that you don’t have to wish for this
future; all you have to do is watchfully wait.
Navica News
You can hear me speak at these upcoming events:
December 11, 3rd DoD Open Conference, Tysons Corner, VA:"Creating
an Open Source Policy for Your Organization" session.
More information here.
If you are interested in having me speak at your
organization:
Contact me directly via email.
New Book Availability
I am pleased to share the news that I have completed my latest
book, Virtualization for Dummies (you thought that
virtualization stuff in this newsletter was off-topic, eh?).
It will be published by Dummies Press in early December, just
in time for the all-important technology book Christmas season.
You Might Enjoy Reading My Blog:
Sun's
interesting virtualization initiative
Does
the world spend 6% of GDP on IT?
BEA:
Icahn, not Ellison is key player in this drama
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