Once a concept thought to be oxymoronic, the business of open-source software is now working its way through adolescence to full-blown maturity. And the Open Source Business Conference (OSBC) in San Francisco this week proved that like the teen years, the transition brings growing pains.
As a new wave of applications vendors begin to take center stage in the open-source market -- replacing software infrastructure vendors such as JBoss and MySQL as the industry's up-and-comers -- consolidation threatens to consume some of those more established companies that led the first-wave of making a viable business model out of open source.
In fact, Atlanta-based JBoss itself was rumored to be a target of acquisition by Oracle as the OSBC opened on Tuesday. Instead, the Redwood Shores, California, company announced it would purchase embedded open-source database maker Sleepycat Software, another early entrant into the professional open-source market.
While market pioneers go to bed at night wondering which technology powerhouse may own them in the morning, startup applications vendors are chomping at the bit to make their mark using the business model that MySQL and JBoss made popular, and which now has the backing of more established companies like IBM and Sun Microsystems. That model is to offer open-source software with a free license, while using professional services, maintenance and support for these products to derive revenue.
Once a niche play, this model has become completely acceptable in big deployments as part of software infrastructure -- the plumbing layer that includes an OS, application server, database and other software on which end-user applications are built. This stack of software has become credible enough to have its own name -- the LAMP (Linux, Apache, MySQL, Perl/PHP/Python) stack -- and its establishment has made way for applications vendors to jockey for position higher up the open-source food chain.
"As predicted, open-source is moving up the stack," said Richard Daley, chief executive officer (CEO) of Pentaho Corp., during a demonstration at the OSBC of his company's open-source business intelligence application.
Daley's company was one of a host of other upstart applications vendors that were invited to showcase their wares at OSBC. Among them was the new darling of professional open-source, SugarCRM Inc., which offers CRM (customer relationship management) software. Another was Project.net, a company with a project portfolio management tool that recently decided to open-source its software because selling software licenses was no longer cost-effective, said its CEO Peter Windston.
"We realized we can drive this [company] a lot faster with an open-source model rather than a commercial model," he said.
This cost-effectiveness and the support of major players has made open-source software more generally accepted in an industry that five years ago scoffed at the idea of using it for major IT deployments, said Andrew Updegrove, an open-source advocate and attorney with Gesmer Updegrove LLP in Boston.
Because of this trend, startups in this market face no special hurdles coming out of the gate just because they use a professional open-source model, as they might have before big companies like IBM and Sun jumped on board, he said.
"I think we've gotten through a major knothole," Updegrove said. "When a company like IBM makes [open source] a strategy, you see a major company betting their future on the validity of this model."
