Open source's promise -- and pitfalls

"Sorry Darl [McBride, SCO CEO], Al Gore didn't invent the Internet, and you didn't invent Linux or intellectual property law. We still own Unix. We believe Unix is not in Linux and that Linux is a free and open distribution, and should be and always will be," Stone said, addressing an audience of 700 attendees at the Open Source Business Conference 2004 in San Francisco.

The verbal fencing between SCO and its rivals isn't much different from Bush and Kerry trading barbs in this highly charged election season. The battle over Linux won't be settled as easily as the Presidential race, but eventually the courts will try to sort out Unix/Linux ownership and rights issues or the parties will reach some out-of-court settlement to make the legal ambiguities, ongoing litigation costs and possibly SCO go away.

In the meantime, Stone spent most of his keynote telling vendors and software developers how they could make money from open source software and why customers should care. According to Stone, open source is very disruptive to the vendor community, as it has been for Novell. In the 1990's, Novell's NetWare had a 70 percent market share, and today it hovers closer to 10 percent. On the road to extinction, Novell spent US$260 million, according to Stone, on open source stalwarts such as Ximian and SuSE to turn itself into more of an open source platform.

Now Stone praises the virtues of open source and rails against the evils of proprietary software, which he said results in customer lock-in. "Proprietary software forces you into a box and an upgrade model. You need to give end users the ability to tailor solutions -- not one size fits all." Stone noted that the cost to swap out one component for another in the proprietary model is cost prohibitive. "Customers need to determine when to upgrade at their pace, not at our pace, and it doesn't mean they don't pay for maintenance," Stone added.

The conventional wisdom is that open source software offers more flexibility and modularity, and forces vendors to compete on innovation rather than in locking in customers. "Choice will be the open source legacy," Stone proclaimed. "Customer choice is bad for incumbents but good for customers."

All the talk about flexibility, choice and eliminating customer lock-in is a somewhat idealised view of open source software.

Open source is certainly more flexible than closed source. Having the source code allows developers to customised programs more easily. If one vendor or developer can't resolve a problem or create a new function, the open source ecosystem goes into action to fill the void. More and more vendors are bringing their applications to support Linux as well. However, open source so far has proven most capable at the bottom levels of the stack, where a critical mass of developers is focused on a project.

Open source does allow for more choice up and down the software stack, but it's not like a huge street market with dozens of vendors selling you an operating system. Currently, Red Hat dominates the enterprise market in the US with SuSE and others bringing up the rear. However, incompatibilities among Linux or other open source distributions could mean that you can't simply swap out one distribution for another. "You can't run PeopleSoft on Linux and pull SuSE and run Debian the next day," said Alan Nugent, senior vice president and chief technology officer at Novell. "If you talk to major vendors, they have said they don't want one Linux distribution and they don't want Linux to be heavily Balkanised like Unix."

The vendors don't want to have to support more than a few distributions, which tends to anoint limited choices that have the infrastructure required to support corporate customers. The reality is that enterprises want the option and negotiating power to switch operating systems, application servers or e-mail systems, but aren't attracted by the switching costs and potential disruptions. If you are a Red Hat customer, and switching to SuSE is not a frictionless operation, just how flexible is Linux?

"[Migrating between Linux distributions] is not completely fungible, but it's not as difficult as with Windows and Netware. The economics are more open and you have a more predictable path using open source solutions," said Jeff Hawkins, Novell's vice president in the office of the CTO.

Thus, you have a few big players dominating the market with not-quite-compatible Linux distributions, who will charge as much as the market will bear for licensing, maintenance and support, providing a viable alternative to Windows and Unix flavors. That doesn't sound like a lot of choice within the Linux operating system world.

Of course, Novell's Stone argues that the operating system has become a commodity. A few players own the space (with Novell's SuSE a contender and Netware a loser) and if you want to make money you need to innovate higher in the stack with open source or proprietary software.

"All software will not be cannibalised by open source." Stone said. Although GNU General Public License creator Richard Stallman, who is also the founder of the Free Software Foundation, might beg to differ, Stone said that "open source is not equal to free and the GPL doesn't mean free." Even the home page of GNU.org says, "The GNU Project was launched in 1984 to develop a complete Unix-like operating system which is free software." To prove he understands the nuances within the open source world, perhaps he should have said that the underlying principle behind the GPL may indeed be free, but for enterprises that are looking for a vendor to answer the phone in the middle of the night, a price will have to be paid.

Novell and nearly every other vendor is taking a hybrid rather than pure play approach. Some open source vendors, such as MySQL and JBoss, offer dual licenses, with versions of their software that carry commercial licenses in which subsequent code developed doesn't have to adhere to the GPL.

Novell has open source distributions and builds its proprietary software--such as secure identity management, Web application development, resource management, collaboration services and high performance clustering--on top of Linux. As Linux penetration grows, Novell wants to offer customers a comprehensive stack or piece parts, as well as support. But the more comprehensive the stacks from operating system or distribution vendors become, the greater the likelihood that we'll see more, rather than fewer, binary incompatibilities.

At the same time, Novell, IBM, HP and others are figuring out how to give back to the open source community without giving away the farm. Via its acquisition of Ximian, Novell is funding the Mono project, a community initiative to develop an open source version of Microsoft's .Net development platform, allowing Linux and Unix developers to build cross-platform .Net applications. Hawkins said that Novell would contribute more code to the open source community, with an announcement coming next week at its annual BrainShare technical conference. IBM has contributed much of the Eclipse development environment, and HP employees are in part responsible for Samba.

Novell has many challenges and opportunities due to the rise of open source software, not the least of which is competing with the market leader Red Hat, which is looking to fortify its stack with an application server and utility computing capabilities.

For Novell, as well as others coping with the open source phenomenon, the challenge is in determining which parts to open source, which to make proprietary, and even which to offer for free. Sun's front and back office stacks (the Java Desktop System and Java Enterprise System), for example, are not primarily open source, but they include components, like Application Server 8, that are basically free.

It's a slippery slope unless the company is able to build trusted partnerships with customers. As Novell's Stone said in his OSBC 2004 keynote: What is good for the customer is ultimately best for vendors to practice. However, many vendors fail to heed that advice.

For enterprises today, it's a good time to find out which vendors are willing to play it your way and offer you the best blend of open source and proprietary software and world class support. Vendors will have to pay more than annual lip service to the notion of customer support. The game is changing, and as Novell has discovered, it must either embrace and extend open source (to use a Microsoft phrase) as part of hybrid solution or gradually become irrelevant to the marketplace.