I've argued that cloud vendors are in a better position to monetize open source products than open source software vendors themselves. I'm not alone in this thinking.
In William Vambenepe's post, "Cloud + proprietary software = love," there may be yet another reason for open source vendors to drink the cloud Kool-Aid with caution.
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If Cloud providers get it right and software vendors play ball, the "proprietary vs. OSS" debate may become more favorable to proprietary software in the Cloud than it is on-premise.
Vambenepe's argument centers on cloud computing alleviating buyers from the hassle of license management.
The removal of license management as a concern may not make a big difference to large corporations that have an Unlimited License Agreement, but for smaller companies it may take a chunk out of the reasons to use open source software. Not only do you not have to track license usage (and renewal), you never have to spend time with a sales rep. You don't have to ask yourself at what point in your beta program you've moved from a legitimate use of the (often free) development license to a situation in which you need a production license.
With license management being equally unnecessary for open source or proprietary software in the cloud, buyers can focus on other selection criteria, such as costs. Unlike development or unsupported usage scenarios, both open source and proprietary products have an associated license costs in the cloud. This is obviously for products delivered and supported by the cloud provider or the cloud provider's partner.
To make Vambenepe's point, I decided to compare pricing for WebSphere Application Server and the most closely related Red Hat product available on Amazon EC2. Amazon charges $0.795 per hour to run the IBM WebSphere Application Server on Novell Suse Linux on a Standard Small Amazon Machine Image (AMI) in the United States. This charge includes Amazon EC2 costs and the per-hour license costs of Novell Suse Linux and WebSphere Application Server. Alternatively, Amazon charges $1.21 per hour to run JBoss Enterprise Application Platform on Red Hat RHEL on a Standard Small EC2 instance plus a monthly $119 recurring fee. [UPDATE: 2009-12-11: JBoss' Rich makes the point I am comparing apples to oranges. That was not my intention. I simply picked the only two application server Amazon Machine Images (AMIs) that I could easily find pricing for. And in retrospect, my intention was not to compare proprietary versus open source pricing in the cloud, but rather to compare the price differential of proprietary versus open source products in the cloud versus on-premise. I have tried to remedy by comparing Windows vs. RHEL here.]
Obviously, this is simply one comparison, and other comparisons will play out in favor of open source product pricing on the cloud. But that's not the point. As Vambenepe argues, both open source and proprietary products require a license in the cloud, and the license cost differential doesn't always favor open source product in cloud environments.
With license management a wash and the license cost differential being much more balanced than one may instinctively think, Vambenepe argues that choosing proprietary software in a cloud deployment is likely to be an easier decision than on-premise.
Tim Bray wrote, "Makes all sorts of sense to me," when tweeting about Vambenepe's post. What do you think?
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p.s.: I should state: "The postings on this site are my own and don't necessarily represent IBM's positions, strategies, or opinions."