Linux and Open Source

Steven J. Vaughan-Nichols & Paula Rooney

Oracle aims to destroy open source software industry

By | August 17, 2010, 5:32am PDT

Summary: If proprietary companies like Oracle can buy up open source projects and then take back their open source status, how can an enterprise depend on open source software

If proprietary companies like Oracle can buy up open source projects and then take back their open source status, how can an enterprise depend on open source software?

It is with the aim of creating this kind of FUD that Oracle has made its moves against Java and OpenSolaris. Most analysts now expect similar moves against mySQL and OpenOffice.

(To the right, a proprietary Dana, not the open source one. All will be explained.)

Why would Oracle destroy assets it just paid good money for?

Two reasons.

  1. It didn’t really pay good money for them.
  2. It pushes enterprise buyers away from all open source.

Oracle paid $7.4 billion for Sun. Even with recent drop-offs in revenue (which can be made up) the company should easily clear $2.5 billion in hardware sales this year. If you can buy a viable computer hardware business for three times sales you’re doing pretty well. Oracle got the software assets for free.

Oracle’s moves against high profile open source projects like Java (and presumably OpenOffice and mySQL) also serve as a warning against enterprise dependence on other open source projects.

Open source companies practically live to be taken over. It’s the pot of gold at the end of their rainbow. Oracle is telling their customers that could leave them high and dry.

We assume that the license status of open source is fixed, like baby names. But the status of baby names isn’t fixed at all.

When I was born in 1955, most kids named Dana were boys. By 1970,  when the singer Dana Owens (Queen Latifah) was born, most Danas were girls. They will be when my grand-kids are born too. (Picture from Wikipedia.)

What Oracle is demonstrating with Solaris is that such status is not fixed. (Good news for boys named Dana.) Open source can be taken back. Which means that if you come to depend on open source, you may find yourself staring down the barrel of a large bill one of these days, if someone else chooses to be like Larry.

This has always been an Achilles Heel for open source businesses. They can’t make people buy their stuff. They make up for the revenue shortfall with lower sales and distribution costs. But they still have that revenue shortfall.

Thus proprietary companies have a big advantage whenever an open source company wants to cash in. They’re still the most likely buyers. With Solaris Oracle seeks to prove the rights enterprises think they have to open source code can be taken back.

If this can be seen to make financial sense — if Oracle’s strategy is copied even by Oracle — then the corporate way forward for open source may be closed off. Enterprises may decide they have to buy licenses for their own protection, and the open source era ends.

That seems to be the plan, and it’s a cunning one, because as I noted the assets Oracle is playing with were essentially free. All it had to do to get the crown jewels of open source was play a little poker, a game where you win by convincing others your hand is something it’s not.

Open source is not dead, of course. Solaris and the other projects Oracle has bought could be forked. Or can they? Didn’t Google fork Java for Android, and isn’t Oracle now saying in legal papers its control of Java is protected by patents?

And if there’s one thing an enterprise buyer wants to see less than a bill, it’s a lawyer. Lawyers can scare Danas of both sexes.

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Topics

Dana Blankenhorn has been a business journalist for 30 years, a tech freelancer since 1983.

Disclosure

Dana Blankenhorn

Dana Blankenhorn has been a journalist, writer and part-time futurist for over 30 years.

At the present moment I run only a personal blog in addition to my ZDNet open source blog.

DanaBlankenhorn.Com has the subtitle The War Against Oil. In the past I have used it to write about political history, e-commerce, personal matters, some ideas related to open source, and The World of Always On, which is the idea of using sensors, motes and RFID to turn WiFi links into platforms for applications which live in the air.

My IRA account at Schwab holds a few tech shares, most notably some Intel and Applied Materials, but there are no open source companies in it. I don’t even own any CBS stock.

Biography

Dana Blankenhorn

Dana Blankenhorn has been a business journalist for nearly 25 years and has covered the online world professionally since 1985. He founded the Interactive Age Daily for CMP Media, and has written for the Chicago Tribune, Advertising Age's "NetMarketing" supplement, and dozens of other publications over the years.

Talkback Most Recent of 58 Talkback(s)

  • Few open source projects are actually sustainable
    I have pondered this as well.

    FLOSS is often peddled as a "fair" development method which makes software much less expensive.

    This is because the savings goes to the customers and not to that big, evil proprietary vendor.

    But there actually is a price that's too low, even for the buyers. If the development of the software asset is not sustainable, you are not paying enough. Eventually the software will be abandoned or - as in this case - bought by a company with few intentions of honoring the FOSS ideology.

    I find it quite ironic that the old proprietary way of developing software is actually the most fair (socialist if you want): Those benefiting the most will have to pay the most as well.

    What Google did with Dalvik was an attempt to reap the tremendous benefit of being a "Java" player - without being willing to contribute back and help sustain the development. Google has indeed benefited a lot from open source. When you are that big you can set up your own support. It is the small and middle-size players who will have to pay for "support" to help sustain the ecosystem.

    The FLOSS model is flawed. At least for some types of software.

    Sun was not profitable. They never were able to monetize Java. Except for Java ME for which they did receive a fair amount of licence fees from handset vendors. Until Google wiggled a way around that.

    I believe that this is also why Microsoft has taken a lot easier on FOSS competition during the later years. They realize that they just have to sit it out. Sustainability of FOSS projects is rare and for a select few. Given enough time most projects will run into the ground or try to cash in selling to a proprietary vendor. The buyer *will* need to monetize the project and from then on the "open" part of the project will become a 2nd class citizen. Given enough time, customers will realize this as well. After the backlash we will still have FLOSS, but then with a more realistic face.
    ZDNet Gravatar
    honeymonster
    17th Aug 2010
  • wrong
    @honeymonster
    most FOSS projects are sustainable.
    Only proprietary companies go out of business taking the code with them to the grave.
    ZDNet Gravatar
    Linux Geek
    17th Aug 2010
  • RE: Oracle aims to destroy open source software industry
    @Linux Geek
    Prove it. You can't. There are very very few pure-play (sell OSS directly) OSS projects that make money. Very very few. The few ones that do (like Red Hat) don't make that much relatively compared to even niche proprietary companies (for example Symantec's Norton AntiVirus alone makes far far more money than Red Hat).

    Companies that use OSS indirectly (IBM, for example, make their money through services).

    If you look at revenue from proprietary companies like MS, Apple, Oracle and IBM they are making tens of billions of $.

    Google's core search engine isn't open source.
    ZDNet Gravatar
    DevGuy_z
    17th Aug 2010
  • RE: Oracle aims to destroy open source software industry
    @DevGuy_z

    "Prove it. You can't"

    GNU has been around since, what, the early 80s? X has been around about as long. Linux has been around since 1991.

    How many proprietary software projects from back then are still going?
    ZDNet Gravatar
    AdamWill
    18th Aug 2010
  • Many MANY more, actually...
    @awilliamson
    Can't count them all, but let's start with a few big ones and see where we wind up:
    - Windows (1985)
    - Mac OS (1984)
    - Norton Antivirus (pre 1990)
    - Great Plains Accounting (pre 1990)
    - Microsoft Word (1983)
    - WordPerfect (1980)
    - Photoshop (1990)
    - QuarkXpress (1987)
    - Filemaker Pro (1990)
    - Quicken (1988)

    See, the problem that Stallman and you have, is you forget one thing about Copyright and other intellectual property - it can be transferred. It is actually very rare for software to die with its developer, unless that software was a poor performer to begin with. In most cases, the torch is passed to another developer to continue to develop the software, as long as it makes sense to do so..

    Alternatively, in the Open Source world, indeed the source code is available for development, but unless those that need the software know how to program it, there isn't much value in having the source available if no developer has interest or incentive to do so for you.
    ZDNet Gravatar
    daftkey
    19th Aug 2010
  • RE: Oracle aims to destroy open source software industry
    Oracle can buy up open source about it is bank that website attacked from the site support from any soldier site to the light home page is great projects
    ZDNet Gravatar
    musdahi
    19th Sep
  • Lies, damn lies, stats and FOSS
    @honeymonster That's the four levels of lies in the software industry. FOSS may save some ramp up cost but in the long run has the highest true cost of ownership.
    ZDNet Gravatar
    LBiege
    17th Aug 2010
  • TCO - Irrelevant from Oracle's perspective
    @LBiege
    Oracle is about making money. You can make money off open source through services (e.g. IBM) but since Oracle is primarily a software company and is not just a service company that doesn't work. There are very few pure-play (sell OSS directly) that make money and those that do do not make all that much. Red Hat is a good example. MS probably makes almost as much on Halo as Red Hat does.

    The only thing that Oracle cares about TCO is if customers buy their software or not, and they do. Same with MS, Apple.

    Note, regarding IBM. It sells lots of proprietary software too. And don't say "Google" it makes its money on search and that isn't OSS
    ZDNet Gravatar
    DevGuy_z
    17th Aug 2010
  • RE: Oracle aims to destroy open source software industry
    @LBiege And here we are reading your post on Mozilla - Firefox, etc. You can NOT convince me that that has a high cost of ownership compared to MS's offerings.
    ZDNet Gravatar
    Westley52
    18th Aug 2010
  • daftkey your list is flawed
    lets start with Windows
    It has been abandoned & reinvented many times (next version will hopefully will be a better one), so when you put Windows is the same company but not the same software.
    Now mac OS, it was abandoned at 9.3 before switching to unix. Because that solid fundation it will be here, unchanged at the core, 15 years from now, same as Linux, same as FreeBSD. I wont elaborate on the remaining of your list, actually & use QuarkXPRESS, Adobe wares, FileMaker & I hope they will remain viable in the future.

    Now lets see FOSS:
    - Unix
    - Apache
    - PostgreSQL
    - Libreoffice
    - TCP/IP, DNS, Python, PHP, Javascript, HTML/CSS, the very foundations of internet. Nobody will buy that; is open & free
    - Postfix, Squirrelmail
    - many, many others...
    In fact, if commercial software disappears sudendly it will be a disruption to many; for me, I will keep computing as usual, I will regret Adobe, FileMaker can be replaced. Now if FLOSS disappears, it will stop the world: no more internet, no more unix/linux, no more routers, no more banking, etc.
    ZDNet Gravatar
    theo_durcan
    5th Nov 2010
  • I don't know what anyone expected...
    Oracle is a FOR PROFIT company and is competing in the market place. It would make no sense at all to continue supporting a competitive product.

    I just do not understand why some open source folks don't grasp the idea that it must be competitive or the belief that it should not be subject to market competition because it's "special".
    ZDNet Gravatar
    NoAxToGrind
    17th Aug 2010
  • If its
    if its really Open Source, it can't be taken over. If it has a critical mass of users a fork will happen since the source is out there.

    Java never has been open source, and thus all things dependent on it like Open Office, never really were either. There are some compatible Open Source java clones, expect interest in them to grow rapidly with this decision by Oracle.

    OTOH, I've never liked Java and if died tomorrow I wouldn't cry a single tear.
    ZDNet Gravatar
    wkulecz
    17th Aug 2010
  • Of course they can't take OpenSource. They'll just use it to spread FUD
    @wkulecz

    The code is out there and protected with a proper license, there's nothing they can do about it, not even the meanest ugliest dirtiest evilest lawyer can do anything about it. That's a settled issue.

    But as Dana wrote, Oracle only needs to play a little poker, a game where you win by convincing others your hand is something that it's not.

    I'd say this is all Oracle needs to put in place a very nice and elegant FUD campaign, one that will be very effective in delivering a powerful punch on software freedom. Remember, FUD is a hugely powerful weapon in the corporate world, FUD is hugely effective in any environment dominated by greed, fear and the forces of money.

    I'd say Oracle has a winner in its hands, all they have to do is play it well (and I'm pretty confident that they will, it's their game after all.)
    ZDNet Gravatar
    OS Reload
    17th Aug 2010
  • Incorrect....
    @wkulecz
    Sun released Java as GPL2 code, therefore Java is open source. It can be forked, modified,etc....What can't be done now is what Oracle is trying to do. SCO also release open source code and we have already seen where that got them....

    Keep it up (or is it down) Oracle!
    ZDNet Gravatar
    linux for me
    17th Aug 2010
  • True, but for all practical purposes...
    @wkulecz
    an OSS can be reduced to a historical curiosity rather than killed outright. I suspect Open Solaris is thus doomed.
    ZDNet Gravatar
    DevGuy_z
    17th Aug 2010

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