Microsoft Azure set to capture open source revenue streams

Azure follows in Amazon's footsteps -- and other large IT vendors can't be far behind

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Let's turn our attention to the popular Apache Tomcat runtime. Covalent, now part of VMware via SpringSource, and OpenLogic are leading providers of Tomcat support. Realizing that the scalable revenue potential is in selling products, SpringSource launched tc Server, or "Apache Tomcat with enterprise management." While I applaud the "selling products" angle, I reiterate that enterprise management not enough of a differentiator when up against cloud services from large IT vendors.

I still think that proprietary features in the "enterprise" version of the open source product, which are note available in the "free community" version, will be the path forward for open source vendors. Large IT vendor cloud offerings for open source products will rely on availability of the "free community" version and whatever features are supported in this version. If there are compelling features outside of administration and management tooling in the "enterprise" version, then customers have a reason to skip the IT vendor cloud service and pay for the "enterprise" open source product. I know the proprietary features suggestion is difficult for open source vendors to accept, and more importantly, difficult to rationalize in front of customers -- difficult, but necessary.

In the end, there is no way that all expenditures on open source products such as MySQL or Tomcat will occur through a large IT vendor cloud service. Clearly customers will want to use open source in their private datacenters and acquire support and admin/management tooling from the open source vendor. There is also clearly an issue if IT vendors capture too much of the customer expenditure on open source products via their cloud services, leaving open source vendors behind these products to scrimp on future product development. A happy medium will be found. Well, it may not be happy enough for open source vendors as they watch large IT vendors capture revenue around open source products. But that's competition for you.

Fun times ahead.

Follow me on Twitter: SavioRodrigues.

p.s.: I should state: "The postings on this site are my own and don't necessarily represent IBM's positions, strategies, or opinions."

This story, "Microsoft Azure set to capture open source revenue streams," was originally published at Follow the latest developments in open source at


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