What happens when a software vendor decides not to follow the 'Silicon Valley path'

What happens when a software vendor decides not to follow the 'Silicon Valley path'

Summary: One portal vendor's open source journey builds on a community-based development approach.

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Do today's systems really reflect and capture the knowledge and aspirations of today's enterprises? Not yet, in the words of one software leader.

Bryan Cheung CEO LIferay cropped
Bryan Cheung, CEO, Liferay. Photo: Liferay

"I think the 20th century was one of the most unnatural things to happen to humankind," says Bryan Cheung, CEO and co-founder of Liferay, Inc. "People became machinified. They became cogs in factories, which were totally de-socialized.  Even today, there’s still a lot of dysfunctional things that happen, because people aren’t behaving naturally. They are not willing to be honest with their managers."

Cheung's company, Liferay, a Los Angeles-based company which provides portal technology to organizations, seeks to bring more of that natural interaction to enterprises. I had the opportunity to sit down with Cheung, who explained how portal technology is evolving to a new level, as well as his company's commitment to the open source model of software delivery.

Enterprise portals have been around for a long time, and their purposes are relatively straightforward: provide semi-personalized access to important applications from a single screen. Now, however, they're becoming a hotspot for enterprise social collaboration.

Cheung says he is seeing a shift in his company's business as social, mobile, analytics and cloud become the new foundation of enterprise computing. "Portals had their heyday in the 1990s, but what we're seeing today is a need for identifying the person that’s interacting with you and your digital presence," he explains. "In a way it has come full circle. Technology’s catching up to the way people have always behaved in social situations. When you give people the means and the channels, then a lot of the best attributes of social behavior come to the fore."

In the process, communities of customers or users will add far greater value to product offerings than the enterprise can provide on its own. The role of today's portal technology is to open up community collaboration and information-sharing.

True to this belief in the power of communities, Liferay Portal has been open source since its inception. "A lot of companies are following that typical Silicon Valley path," Chueng says. "They have their investors, and they’re aiming for that acquisition or that public offering. We're very conscientious about not doing that. We're still independent, privately held, with no outside capital." The advantage to staying private is that becoming beholden to shareholders stifles innovation, he adds. "We see a lot of benefits in staying private -- we can take risks,  and we can support of our superstar developers who are sometimes are working in stuff that doesn’t have practical value in the short term, but ends up being revolutionary off in the future."

For Liferay, it means building services and capabilities on top of an open source foundation. As is the case with Liferay's open-source business model, Cheung sees many types of online services moving to a freemium model. For example, both the news and music businesses are being disrupted in this manner. In the software business, the trend is to support community based, participatory software development, "and then establish our expertise in providing goods and services that are complementary."

For Cheung's organization, "it's about having a better high-quality model for producing high-quality software, that is community based and participatory, and then establishing our expertise in providing goods and services that are complementary," he says. "That ties back to our cloud strategy. You got our software for free, but here’s some very useful things that are going to add value to the core software that we gave you as open source."

Liferay's customer list includes many leading corporations, including Standard & Poor's, Intercontinental Hotel Group, Raytheon, and Accenture.

Ultimately, building an open source community around its portal platform will deliver more long-term dividends than short-term profits, Cheung relates. "If you look at Red Hat, they could have probably made 10 to 20 times as much if they were a traditional proprietary company. And you don’t know what Red Hat is going to look like 20 years from now. But they have a very strong open source community. There are a lot of fundamentals that aren’t part of the valuation of your traditional proprietary software company that makes Red Hat overall stronger than a Microsoft or an Oracle."

Topics: Open Source, Enterprise Software, Software Development

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  • A very destructive attitude

    This sort of attitude is what is destroying small business in the computer industry. Giving away stuff for free is something only businesses with significant resources can afford. How could mom and pop stores survive, if they had to give away a lot of stuff, before they could make sufficient sales in order to merely stay afloat? The answer is they wouldn't be, and you'd see far, far less of these stores around. Everybody thinks Open Source and giving away stuff for free is so cool! Even Microsoft appears to think this way now. Nobody appears however to care about the collateral damage this does to the computer industry - how this destroys prices, undermines economic opportunities for startups, curbs innovation, etc.. This in fact leads to the situation of the rich corporations getting richer, and the little guy going under.

    Does anyone realize that most of the innovation taking place is being done by companies with huge resources? Ten years ago, small companies were doing amazing things. Why? Because they could charge prices for theirs products, and customers wouldn't balk at paying for them.

    At the rate things are going, I don't expect much app innovation to take place on Windows 8, because Microsoft has not provided an economic environment for developers to do well. All you going to see is a landscape of cheap or free games and social apps. So how is Windows 8 going to gain traction in the enterprise? I have no idea. Oh, and that move by Microsoft to make Windows / WP free on small screen devices, only exacerbates the situation, as it places even greater pressure on software prices. Maybe this is the way things are supposed to be. Maybe the heyday of innovation by small companies in the computer industry are over.
    P. Douglas
    • You are a dinosaur!

      P. Douglas, you're stuck in the past! I have one word for you: ADVERTISING! Give away your programs then stick a big ol' ad in front of users when they're using it! Say you have a graphics editor. Every time a user draws an oval, pop up a "This oval brought to you by Ford" ad. Cha-ching! In addition, every five minutes cover your main window with a non-dismissible one minute video ad for Viagra.

      Seriously though, don't forget that hardware has been devastated by the new reality. No one is investing in high end CPUs or GPUs anymore. I hope you like the current performance of Intel's Core CPUs ... because it won't be surpassed for ten or more years. Supercomputers? They'll stagnate since they're dependent on clusters of Intel CPUs. The RAM makers will struggle to survive on SSDs.

      All of this because people have been convinced to want to walk around with their noses firmly planted in a crappy handheld computer connected to cellphone hardware. Amazing.
      windews
      • The absurdity of it all

        I believe only a fraction of one percent of apps in the Windows store, make enough money to sustain a business paying software developers. What is the point of providing world class tools to developers to create apps, when those apps make ISVs no money? It would be better if MS provided crappy tools, and a good software market, where developers could make money. All MS cares about is bragging rights about how many apps it has in its app store. (In all fairness, that is all, all platform providers - like Apple and Google - care about as well.) Also you would think MS would try and buck the trend of the price of software spiraling downwards, since it is only a matter of time before its Windows ecosystem collapses.

        You have this absurd situation where companies are embracing Open Source and free software, and it is causing increasing amounts of their business to become worthless, and they keep trying to move to higher ground to avoid being swept away by the rising tide, as small companies go under, and everyone acts as if everything is fine and dandy.
        P. Douglas
        • Totally agree with you

          The "app" world, which I would call the "applet world" since that's what they mostly are, is more like the lottery than a business. A few big winners but the vast majority are losers. That leads to review stuffing (Flappy what, anyone?) and other ugly tactics to climb out of the applet ghetto.

          You are also dead on when you talk about MSFT. The Desktop part of Win81 is the best version of Windows so far, by a large margin. And Visual Studio 2012/13 is the best version of VS as well. All that great work is wasted due to Metro and WinRT. It's like having a Ferrari engine in a Yugo body.

          Lets not even get started on the Windows ecosystem collapse. Instead of taking their 1.5 billion user ecosystem, Win32, and intelligently extend it to touch and small screens, MSFT decided to start at zero users with WinRT (which was ultimately based on a failed Flash competitor: SilverLight). They did this in a world of entrenched competitors: iOS and Android. How did they ever delude themselves into thinking that was a good idea? It has already cost them their CEO and multiple VPs along with a billion $$$ outright -- and there are billions of more $$$ of lost opportunity coming.
          windews
  • How delusional are you?

    >No one is investing in high end CPUs or GPUs anymore
    But that's just not true.

    >The RAM makers will struggle to survive on SSDs
    There is a huge difference between DRAM flash and NAND flash, and both are incredibly profitable today.
    yttrium-c4d8b
    • Misreply

      Whoops, meant to reply to "windews".
      yttrium-c4d8b