Ex-software executives from Lawson, Hyperion, Oracle, SAS and other companies in the analytics field are heading up a new open source community and company, the Pentaho BI Project. (The Pentaho Indians were responsible for domesticating the West Indian Manatee.) It's part of the growing trend of former executives of proprietary software companies bootstrapping new firms in application categories by leveraging the open source model. SugarCRM, for example, was formed by a three founders whose career stops including E.piphany, BroadVision, Aurum Software, Octane Software, Hewlett Packard and Symantec. The founders of JasperSoft, which has a commercial open source reporting application, did time at Sybase, Actuate, Business Objects and Oracle.
Pentaho doesn't have distribution yet. The company said it will deliver an Alpha release using the LGPL (Lesser General Public License) in the next few months and ship the completed set of components later this year. The company states its mission as follows:
- Building components for the Open Source community.
- Enhancing components developed by others.
- Integrating components into cohesive and flexible building blocks that Java developers can use to rapidly assemble custom solutions.
- Using these building blocks to create complete out-of-the-box products and a comprehensive BI Platform for End-Users.
- Providing comprehensive technical support, release management, quality assurance, and enterprise services.
The project will include components for reporting, analysis, dashboards, data mining, workflow and frameworks.
Like SugarCRM CEO John Roberts, the Pentaho team believes that its model of community development and free software; competing on implementation and services; and not spending a high percentage of revenue on sales and marketing activities like commercial companies is a recipe for disrupting the incumbents.
They also claim they can deliver higher quality software compared to proprietary/commercial companies because of the number of developers and end-user testers. There is some truth to that notion, but many of these more commercially oriented open source projects have a core team of developers who create the vast majority of the code. SugarCRM has 18 developers who create most of the code, and open source database developer MySQL develops its own code. Open source has an advantage is that the ecosystem, which is far more than customer test sites, can make significant contributions. Roberts claims 450 code contributors to the SugarCRM project and 250,000 downloads of the software to date.
The open sorcerers like to talk about tearing down the walls of traditional commercial software with free software. But it's not free software to the open source vendors or to their customers. Most open source vendors have a staff of developers who do the vast majority of productizing coding for a project, just like commercial vendors. Both open source and commercial vendors have staff for maintenance, support, training and consulting services--that's where open source vendors make their money. Open source lets customers look at and modify the code--but how important is that to most companies who just want the software to work as advertised. Open source vendors claim that the cost of commercial software is heavily weighed down with sales and marketing expenditures and R&D costs of commercial vendors. In theory, if the applications are of similar quality, open source applications should be less costly to deploy than commercially developed software and the open source vendors should be able to garner decent margins on their services.
A challenge for the open source vendors is to maintain their happy and engaged communities, which can become increasing difficult as the vendors have more financial success. Yes, contributions are available to anyone who wants to use them, depending on the particular open source license scheme, but what's the incentive if a Red Hat or an IBM is getting all the financial fruit from the effort and you need to eat. Not every open source developer has an enlightened attitude about the relationship between code sharing and how the community is legitimately leveraged for corporate profits. And, as the number of open source projects increases, the pool of developers attached to any particular community can be diluted. That said, it's not lost on commercial developers like SAP or Microsoft that building communities and ecosystems are critical to success. But the success is more of a financial measure--eking out a profit in the ecosystem--whereas open source is based on sharing and egalitarianism.
The two are not mutually exclusive, and they will be blended as the models for commercial and open source software evolve. For now, many of the commercial vendors will be looking over their shoulders at these upstart open source projects, and figuring how fast they need to run...and in what direction.