Larry Augustin's Weblog

Open Source Census: More Numbers on Open Source Adoption

The Open Source Census today released some great results after six months of collecting data.  A few highlights:

• Government and financial services companies show the highest use of open source per machine scanned. On average, government agencies have 123 different open source packages installed per machine; financial services companies have 117 different packages installed per machine.

• Europe shows the highest usage of open source, with the United States lagging behind. For example, the U.S. averages 51 open source packages per machine and Europe averages 68 packages per machine.

• OpenOffice has been found on 73 percent of personal machines scanned vs. 28 percent of enterprise machines scanned.

Once again the numbers confirm Europe's leadership in Open Source adoption versus the US.

The OpenOffice number is fascinating.  One of the technology trends of the last 10 years is the "Consumerization of the enterprise."  That is, consumer technology being adopted by the enterprise.  Traditionally enterprise technologies trickled down in some form to consumers.  In the last 10 years that trend has completely reversed and new technology adoption has become consumer driven and new technologies have been "pushed" into the enterprise by users.  One has to believe that the imbalance of OpenOffice appearing on 73% of personal machines versus 28% of enterprise machines is something that will have to correct.  The pressure to adopt OpenOffice in the enterprise has to be mounting.

Actuate Open Source Survey Shows Europe Leads in Open Source Adoption

Continuing on the theme of my previous post on the adoption of Open Source in Europe versus the US, Actuate today released findings from their aannual survey of Open Source adoption.  Some highlights:

• Europe leads the way in its preference for open source platforms, particularly in the deployment of new applications, and replacement of outdated systems, with France and Germany at the forefront.
• Close to two-thirds (61.6%) of French respondents and German respondents (63.6%) stated that Open Source software is either the preferred option, or explicitly considered as an option when procuring software.
• In the UK, that the proportion of respondents believing that the benefits of Open Source software outweigh the inhibitors increased this year to 54.0% (from 45.3% in 2007). This figure rises to 65.4% in France, North America 53.5% and Germany 48.6%

I don't think the results will come as a surprise to anyone familiar with the market for Open Source software inthe US and Europe.  The implications for Open Source businesses remain unchanged:  US Open Source software companies must find ways to take their business global from day one.

Commercial Open Source in Europe Versus the US

We just finished the first Europe Open Source Think Tank (OSTT). Andrew Aitken of Olliance and Alexandre Zapolsky of Linagora hosted a fantastic event. I highly recommend it to anyone who can attend.

During the course of the two days a common theme I heard repeatedly was the difference between commercial Open Source businesses in Europe versus in the US. The differences are best illustrated by examining different views on a number of concepts. This isn’t a scientific survey, but reflects opinions I heard consistently from multiple people over the two days of the conference:

Concept/Idea	European View	United States View
Primary reason for adopting Open Source.	Avoid vendor lock-in.	Cost.
Key driver of commercial Open Source business creation.	Creation of a local software industry.	Venture capital/entrepreneur driven to create a big business and make money for investors.
Dual licensing business models.	Not true open source. Proprietary business models using Open Source for PR and marketing.	Widely accepted as the most common Open Source business model.
Software sales model.	Channel oriented: VARs and SIs.	Direct.
Open Source business models.	Service and support subscription focused; 100% open source software.	US companies don’t want to be in the services business. The focus is on products, typically proprietary add-ons or an Enterprise Edition paired with an Open Source product edition.
Expectations around "Open Source" products.	All code is available under Open Source. There is often a community governance of community participation model.	Same, but not necessarily all products are available under an Open Source license. Commercially licensed versions of the products are commonly available. Projects are managed by a commercial vendor.

Let’s explore each of these in a bit more detail.

Primary reason for adopting Open Source.

The week prior to the OSTT I spent a few days with senior IT people from the financial services industry in New York. The last two OSTTs in Napa both featured CIO panels. In all three cases I heard a common theme that the primary driving factor for their adoption of Open Source was cost. Likewise The451 Group did a survey of CIOs regarding Open Source adoption and identified cost as their primary reason for selecting an Open Source alternative. That’s in stark contrast to what I heard this week at the Europe OSTT. Cost is still important, but the Open Source nature of the software is more important; specifically, the ability to have multiple vendors (avoiding vendor lock-in) and the ability to influence and support the direction of the project.

Key driver of commercial Open Source business creation.

I’m somewhat biased living in Silicon Valley at the center of the information technology Venture Capital business, but in the US we are definitely driven to create Open Source businesses with venture capital. The US has a large and successful existing proprietary software business. Our motivation in the US is to build the next generation of software companies. But in Europe that’s not the case. Here there is a natural desire to build a local software economy and Open Source offers that opportunity. That’s a major motivating factor in the adoption of Open Source.

Dual licensing business models.

Business models based on dual licensing (either relicensing Open Source code under a commercial license or selling a commercial version of an Open Source project with added features) have become commonplace in the US. I definitely heard from the European attendees at the OSTT that there’s a negative reaction among European customers to those models. This contrasts with the US CIOs I talked with last week who were definitely more comfortable with getting their Open Source software from a vendor with a commercial license.

Software sales model.

Commercial Open Source in the US has relied heavily on an ability to disintermediate the software selling process and go direct to the buyers. Interestingly enough that doesn’t appear to have happened in Europe. Here the buyers still seem to acquire software predominantly through VARs and SIs. The direct model does not seem to be as widely accepted here. Perhaps it’s because the VARs and SIs in Europe are more heavily invested in Open Source than they are in the US.

Open Source business models.

Support and service subscription models clearly dominated the thinking among the Europeans here at OSTT. This contrasts with our thinking in the US that services models are not scalable and that the models should be product based.

Expectations around "Open Source" products.

The bar for Open Source companies is clearly higher in Europe than in the US. That is, expectations are that if a company is primarily an Open Source vendor that 100% of their software is available under an Open Source license. Further, that there is some community model or interaction model that allows a customer to participate in guiding the direction of the software.

Conclusions.

I’ve said this many times: Europe and most of the rest of the world is ahead of the US in Open Source adoption. This has been the case since I started tracking Linux usage numbers by country in the mid to late 90s. I believe the attitude differences I observed at this OSTT reflect a more sophisticated view of Open Source than we have today in the US. In the US the Open Source nature of the software is almost irrelevant to a company’s buying decision. The US buyers want better, cheaper software and a better relationship with vendors; all of which Open Source helps create for them. But they are not so interested in the source code itself nor in how access to the code created those benefits.

I believe the European Open Source software community has moved beyond that. The European community sees those benefits, but in addition recognizes that the Open Source nature of the code is the driving factor behind those benefits. As a result they have embraced Open Source to a degree the US market has not; insisting in many cases on acquiring the software under an open source license, not an alternative commercial license. It’s great to see this level of sophistication among the commercial Open Source community in Europe, and I have hope that eventually the US market will catch up.

Congress Moves to Support Open Source in Healthcare IT

On Monday Sep 15 Representative Pete Stark (D-CA) Chairman of the House Ways and Means Health Subcommittee, introduced the Health-e Information Technology Act of 2008.  If enacted as law, Stark’s bill will require the federal government to both establish standards for an interoperable health IT system by a set date and create an Open Source health IT system that will be made available to all healthcare providers at little or no cost.

Let me repeat that last part for emphasis, if enacted the bill will require the federal government to create an Open Source health IT system that will be made available to all healthcare providers at little or no cost.  This marks a truly disruptive change in the Healthcare IT landscape, and one that Medsphere has been advocating for some time. 

Of course, such a system already exists. It's available under the AGPL Open Source license and is based the Department of Veterans Affairs award winning VistA system.  It is available for download at Medsphere.org.  I'm pleased to say that Medsphere had a hand in lobbying for this legislation.  Medsphere Chairman Dr. Ken Kizer has testified multiple times in front ot Congressional committees advocating Open Source in Healthcare IT.  It's great to see Dr. Kizer's efforts beginning to bear fruit.  While VistA is not mentioned by name in Stark's press release, the VA solution plays a significant role in the announcement.  Representative Stark has been a vocal advocate for retaining VistA and applying it to both public and private sector healthcare concerns even while the VA and Department of Defense mull over alternative systems and configurations that would dismantle the venerable and proven IT system.

Medsphere's Open Source version of VistA, OpenVista, has been customized for commercial hospitals over the past five years and remains the only version of VistA deployed in a commercial hospital setting in the US today.  Medsphere's success at customers such as Midland Memorial Hospital, West Virginia Department of Health and Human Resources, Memorial Hospital of Sweetwater County, Lutheran Medical Center, Century City Doctors Hospital and others is well documented.

Medsphere and Hewlett-Packard are jointly sponsoring a 1-day summit on Open Source in Healthcare on October 2 in New York City.  Dr. Kizer and I will both be speaking there.  If you are interested in learning more about Open Source in Healthcare IT I encourage you to attend.

Open Video Player - Open Source on Proprietary Technologies?

You may have see the Open Video Player initiative was announced today.  First, I want to applaud the people and companies involved for coming together to help create a developer framework for video player applications on the Web.  Developers can download player source code and reference plug-ins for advertising technologies.

However, a couple of things disappointed me about the  announcement.  First, although the license for the code appears to be a fairly simple and liberal license and is likely OSD compliant, it is its own license.  I'd like to see them use an existing open source license rather than draft something new.

Second, I don't see anything about collaboration on the code.  There's nothing about a community process around advancing the code.  I think to truly engage the developer community this has to be more than just publishing code.  The code has to become a living, breathing project that can grow.

Finally, from the announcement:

Open Video Player is a community resource for developers wanting to build online video players using Adobe Flash or Microsoft Silverlight.

What about building online video players using open source technologies?  I agree that we need to open up standards and code for building media players because those technologies have become core to the Web experience today.  But they need to be truly open technologies.  Akamai has a chance with Open Video Player to do just that and I encourage them to consider supporting a truly open source video player platform.

HP FOSS Talks, San Francisco, August 2008

I spoke at the HP organized FOSS Talks in San Francisco in August 2008.  The idea behind the talks was  to bring together industry experts and enterprise IT customers for practical and informative discussions around Free and Open Source Software (FOSS).  The recorded talks are now online.   Check them out.  Speakers included myself, Phil Robb, Andrew Aitken, and Bob Gobeille.

Chrome: Google’s New Operating System With Built-in Web Browser

Perhaps the most interesting question raised by Google’s Chrome is when does the Web browser stop being a Web browser and start being the operating system?  For those of us that have been in computing for 25+ years now it's fascinating to watch technologies come all the way back around. Since it's beginnings the Web browser has moved from document viewer to application UI to application platform. Can operating system be far away?

Pardon me for a moment while I digress a bit and show my age.  If you're not an old-time Unix user you may want to skip to the next paragraph.  How many of you old-time Unix users out there remember the jokes about the "Emacs operating system‘?  For those of you not familiar with it, Emacs started life as an editor with a complete Lisp interpreter built-in as a way to extend its functionality.  Of course with a complete Lisp environment built-in, people eventually developed some fairly complex functionality inside the system, including email clients and a Web Browser. People have even experimented with Emacs running standalone on a Linux kernel.  The idea being that the only application environment one really needed was Emacs.

With Chrome Google is taking the Web browser in exactly that direction: making it the application platform.  None of this should come as a surprise.  The more people use the Web, the more money Google makes.  That's the beauty of Google's business model. Google doesn't make money when you or I install and run a piece of software locally on our machines.  So Google has to make the Web application experience as good or better than the local application experience.  To do that they need to take a big step forward from the existing browser technology and re-architect the browser assuming that's the use case.  That means treating each "Web page" as a separate application, running in its own memory space, isolated from other applications.  It also means taking the application development language (Javascript) and dynamically compiling it down to machine code for best performance.

We are also not always connected, so applications need an offline framework (Gears) that always them to run on a local copy fo the data and synchronize when connected back on line.

Sounds to me an awful lot like an operating system.

Well not quite. Chrome doesn't manage hardware. And although it runs each application (Tab) as a separate task and manages those tasks it doesn't do the task scheduling, swapping and other low-level memory management features an operating system does.  So there's still some work to be done.

Oh yeah. It lets you view Web pages too. :-)

Where does Google go with this next?  How hard would it be to add the hardware and process management features of an operating system?  Well there are already several Open Source projects out there that do that. Linux and FreeBSD come to mind.  A Linux kernel that boots and execs Chrome can't be too far behind. Anyone want to bet on how quickly someone makes a minimal "boot to Chrome" Linux installation?

Open Source Revenue Models: Pay for What You Really Use

Matt Asay's recent posting on Open Source revenue models prompted me to pen some thoughts on the difference between the traditional license model (where many costs are hidden/paid for by the up-front software license fee) and the typical Open Source subscription model where customers pay an annual charge but with no up-front license fee.

One of the things companies using an Open Source model need to do is make sure they get paid for up-front costs up-front. For example, in the more traditional model a software vendor would get paid an up-front license fee. That license fee would help defray to costs of sales (including extensive pre-sales technical support for evaluations or pilots) and the extra support costs during initial deployment.

A subscription-based Open Source model does not include that up-front license fee. So to the extent that a customer wants pre-sales technical support or technical support to run a pilot they have to pay for those services. To the extent that a customer needs extra help in deployment they need to pay for those services. This can be a benefit to customers as the costs are explicit (not hidden in a license fee) and incremental (you can pay hourly for what you use as opposed to a big license fee that may or may not align with your actual resource usage).

Part of the challenge is educating customers about this different model. The Open Source company needs to explain to the customer that they can pay for consulting services to support their pilot, and then pay for the subscription service as opposed to getting the pilot for free from the proprietary vendor but now having to pay a large licensing fee when they deploy.

Ultimately I think the explicit and incremental pricing structure of the Open Source model is better for customers in the long run. But it will take some time before more customers are used to buying this way.