What Do You Care What Other People Think?

Open vs. Free in Cloud APIs

Open and free are orthogonal in cloud computing APIs, but in this world the free aspect isn't typically interpreted as freedom, but price. Freedom in the cloud is more typically associated with data and your rights to move it from one service to another and this is a very important attribute. Application portability has also been raised as an important attribute but currently the application models are early in their maturity curve and vary from straight web programming with a REST or SOAP front end to prepackaged virtual machines to application frameworks like Microsoft's Azure and Google's AppEngine.

Open and free are both crucial attributes in order for a market economy to grow. There are many aspects of cloud computing but for the developers and users of cloud services, the atomic unit of the cloud is the API. Openness and economic growth is a deep subject that may provide clues for how to build a better cloud – in reading the linked paper, consider that a company's APIs represent the "export goods in which it has a comparative advantage". In the software industry open platforms have typically outperformed closed platforms in the long run due to the economies that develop on top of them, cementing those platforms' place in a range of markets.

Open APIs…

Open APIs in the cloud are:

• Openly documented
• Available via self-service (i.e. developers can sign up on a website, get an API key, with no hassle)
• Using open technologies (SOAP, REST, RSS)

An easily accessible example of this is http://bit.ly. There are enterprise services that meet these criteria as well, but bit.ly is clear and can be used to understand the broader applications of APIs. Bit.ly is a simple URL shortening service that also lets you see how many people have clicked on your shortened version of that URL. It's really useful if you want to both project important articles on the web and understand the reach of your projection.

Test 1: Openly documented

• APIs are documented here: http://code.google.com/p/bitly-api/wiki/ApiDocumentation)

Test 2: Available via self-service

• Go to bit.ly and you'll be able to sign up for an account right away for their direct website
• Click the "account" button at the top right and look at the second section, "API Key"
• You can now access their APIs programmatically by using this key

Test 3: Using open technologies

• You can see this is a REST API from reading the API documentation (granted, it is a mix of verbs and nouns)

… lead to 3^rd party innovation

Tweetdeck has already used this to integrate with them, so Tweetdeck users put their bit.ly API key into Tweetdeck, which then uses the Twitter API to talk with Twitter, and automatically uses their bit.ly account (indicated by the API key) to shorten URLs that are typed into tweets. It made Tweetdeck better and probably increases the traffic to bit.ly.

This could also work on the iPhone application of Tweetdeck but it's not yet implemented in the version I have. Many iPhone applications work by combining the native client capabilities of the iPhone with one or more cloud APIs that provide access to services in a clean, machine-friendly way.

From the efficiency of innovation perspective, keep in mind that Twitter never contacted Tweetdeck to use their API, nor did bit.ly (as far as I know).  The Tweetdeck guys simply built a killer application that uses those services via APIs rather than scraping their web sites (a brittle and slow approach).  In the last month, Tweetdeck also added Facebook and MySpace support via their APIs.  Again, efficiency and reach through designing your core business service to be "remixed" is found through APIs – Tweetdeck users got new value through the app they like and Facebook and MySpace got a new stream of user-driven content, all without sales or business development teams engaging at the outset.

If we take that example and scale that across different services offered by different businesses in different industries - media, financial services, marketing, e-commerce – we see that open APIs against these services are leading to increase usage and revenue due to new innovation by their partners and customers.  The classic example of this is eBay's statement back in 2008 that 60% of their traffic was coming through APIs rather than their website – 6 billion API calls per month. That API has been available since 2001, and what we're seeing in 2009 is an API tipping point as Dion Hinchcliffe articulated last November. 

Coming next: Free vs. Paid APIs.

Free Is Not The Opposite Of Commercial

Free software is not the opposite of commercial software. It is not an attack on commercial software; it can be a way of getting work done that enables software companies to collaborate with community projects for the betterment of both. Users can benefit, because they have access to software that is the product of the efforts of vibrant, diverse communities, dedicated to creating great software, efficiently and cost-effectively.

For those who have followed these topics for some time, this is not new information, but I wanted to take the opportunity to clearly establish the CodePlex Foundation's perspective on these issues.

There are successful software companies whose businesses are based on free software.

The CodePlex Foundation’s Board of Directors and Board of Advisors prove the point. The individuals who are contributing their time and effort to our success have decades of industry experience leading companies that have successfully built revenue and profit solely from free software. Ximian, VA Linux, MySQL, SugarCRM, and DotNetNuke are examples of how to run profitable software companies, built on a free software license base. Ximian (Miguel de Icaza) and VA Linux (Larry Augustin, Mark Stone) were built on GPLv2-licensed software technologies; MySQL (Monty Widenius) is licensed under GPLv2, SugarCRM (Larry Augustin) is based on GPLv3, and DotNetNuke (Shaun Walker) is based on BSD.

Ximian provided Linux-based applications for email (Evolution), messaging (Gaim), and productivity (OpenOffice.org) which were packaged into the Ximian Desktop and were all free software.  The company was acquired in 2003 by Novell.

VA Linux, which began life as one of first commercial businesses focused on distributing and managing Linux-based IT systems, provided companies with an alternative to more expensive UNIX-based workstations; the company has since changed its business model to become a publisher and provider of software development support. Now known as SourceForge, the company operates SourceForge.net, Slashdot, IT Manager's Journal and Freshmeat as well as Ohloh.

MySQL used GPLv2 to establish one of the early dual licensing businesses, offering a free community version under GPLv2. For companies that wanted to embed the database into proprietary products, MySQL was offered under a royalty-based non-GPL license.

SugarCRM in 2007 was re-licensed under GPLv3. It had previously offered its software under a custom license.  Like MySQL, SugarCRM has a dual-license business model: the Sugar Community Edition is available as free software, and the company also sells annual subscriptions to SaaS versions of Sugar Professional and Sugar Enterprise. This model has built value for SugarCRM, its partners, and also for developers looking for a good CRM system.

Shaun Walker of Dot Net Nuke built a great content management system on a BSD license.  Contributors sign a Contributor License Agreement (CLA) that enables the company to defend the project in the event of a legal dispute regarding intellectual property claims. 

There are also business models beyond software companies that can build profitable enterprises based on free software - including development services, hosting, and deployment services companies - which are beyond the scope of this discussion.

So from my perspective and that of the CodePlex Foundation, free software is not the opposite of commercial software.  The two terms are orthogonal and can either apply or not apply to any given piece of code. We also acknowledge the distinctions present in the community between “free software” and “open source software”.  We will tend to use the latter to describe the broad range of software projects that we want to support. We believe in making it easier to get things done, with the best tool for the job, with the best license for the tool; and we believe that by enabling more software companies to contribute to community projects, we can help advance the state of software.

Open Source Strategy at Microsoft

I've been quiet on this blog for the last few months because I've taken on a new role at Microsoft: Open Source Technical Strategy.  At this point, some of you are thinking:

a) I'm joking
b) I'm crazy
c) I've joined a dark conspiracy

But in fact the truth is:

d) none of the above

As Director of Platform Technology Strategy (official title), I run the Open Source Software Lab at Microsoft, where we have hundreds of physical and virtual servers running 40+ distributions of Linux, 12+ variant of Unix, and several versions of Windows.  The research projects we do run from testing interoperability of network protocols like IPSEC and IPv6 between Linux and and Windows technology, the user experience and technical capabilities of HPC projects like ROCKS and Ganglia, to the broader attributes like size of developer base and changes in the development model for different Open Source projects.

We're also working with JBoss and SugarCRM on optimizing their open source applications for Microsoft infrastructure like Windows Server and SQL Server.  This has been fun, rewarding work that has helped to demonstrate the truth of our statements about working with Open Source.

Finally, I'm active in the Microsoft Shared Source Initiative, where I am responsible for Technical Strategy.  We are seeing some great work from inside the company - teams from all product groups wanting to contribute to Open Source in some way.  This week, Microsoft launched CodePlex in beta.  CodePlex is a developer community infrastructure hosted by Microsoft on behalf of Open Source developers - a place for code from both Microsoft product teams and the community to reside and for the developers themselves to collaborate.  Currently a dozen projects are there, ranging from IronPython to the Commerce Starter Kit.

I have a new blog at http://port25.technet.com, a site we've built to have a constructive dialog on Open Source, Interoperability, and Microsoft. 

Change is coming and I'm thrilled to be a part of it.  I'm particularly grateful to people like Andrew Aitken, Mary Coleman, and Matt Asay for what they taught me about Open Source and the Open Source community.

Future of Commercial Open Source

I got to take part in a workshop in Santa Clara yesterday put on by SDForum - "The Future of Commercial Open Source" - unlike a standard event in the valley, this started with "opening comments" from the panelists and then broke out the 70+ attendees into 6 working groups, each discussing a question about "What will Commercial Open Source be like in 2010?"

Andrew Aitken of The Olliance Group was the instigator, and brought together a really outstanding set of people - Tim O'Reilly, Rod Smith of IBM, Simon Phipps of Sun were panelists, and the constellation of VCs and open source companies was amazing.  As a bonus, Mark Radcliffe of DLA Piper Rudnick summarized the first draft of the GPL 3.0. I've worked with Andrew Aitken in the past for insights into Open Source and given his knowledge and connections, it was no surprise that the event was a success.

It was no surprise that Microsoft was mentioned many times - but the big surprise to me was hearing Tim O'Reilly say, "If you consider companies that contribute to Open Source projects to be Open Source Companies, then you would have to say Microsoft is one, because they contribute a lot of source code."  He went on to say that his definition of Open Source companies is companies that use OSS, like Google, SugarCRM, etc.

Tim's insights:

• Open Source is about sourcing commodities - we should look at the core this phenomenon as the software supply chain enabled by Sourceforge
• Can SourceLabs, SpikeSource, and OpenLogic become part of the Sourceforge ecosystem?  This would mean that they are truly integrated into the software supply chain.  What about Palamida, Black Duck, and CollabNet?
• There is a linkage between OSS and the Long Tail - find niche markets and use OSS to source niche technologies
• Ultimately, success for OSS will come from applying the Dell model - instrument the front end and back end of your business and find the inefficiencies - this is where the opportunities for OSS ecosystem infrastructure lies
• By 2010, the business frontier and the hacker frontier will move.  The hotspots will be very different and we should expect to be surprised.  OSS will be part of every software business, and every company's strategy - much like the Internet has done.

Simon Phipps (who is the chair of OpenSolaris) commented that "customer progress with open source is much slower than the industry's progress, so we must be careful and not rush in where customers fear to tread."

We were told not to blog about the content of the roundtable "thinking sessions" themselves, and I won't, but I will say that I had the pleasure of working with some real luminaries in the space - John Roberts (CEO of SugarCRM, the most interesting OSS business model today in my view) and Mary Coleman of Walden International.  I learned a lot from the discussion and met some very sharp people.  It was very lively given our table consisted of two commercial OSS companies (SugarCRM and Alfresco), two commercial giants (Microsoft and SAP) and four VCs...

Finally Doc Searls had an amusing and insightful summary of the state of OSS and software in general, drawing heavily on the construction industry as a metaphor for the mature state of the software industry.

A Billion Emails via SaaS on .NET

I've had the chance to some time with ExactTarget in the last week.  They're a SaaS email marketing company based on .NET with a very slick AJAX interface.  Since they're an email-centric company, they use Outlook as their design center - task pane selection and folder trees on the left, interaction page on the right, etc.  This parallels feedback I've heard from customers about email interfaces in the recent past.

The impressive statistic I got from our conversation was that they will send a BILLION emails this quarter - perhaps it's my ignorance of the email marketing space but I thought that was impressive.

While talking with their CTO and VP of Engineering, I learned a few things. 

First, they're doing all of this on end-to-end .NET (Windows Server, SQL Server, etc.) and have achieved massive scale.  Second, they're based on AJAX.NET, an elegant Open Source AJAX framework for ASP.NET (for example, to make a method asynchronous on the client, you just add an attribute: [AjaxMethod]).  Furthermore, they've hand-built a number of generally useful client-side features using AJAX - a WYSIWYG editor like Writely, and due to their server-side architecture, they've been able to integrate useful data cleansing tools via SOAP interfaces.  With the number of comments I get about REST >> SOAP these days, I had to ask about their use of SOAP.  They said they got it for free by using ASP.NET (.asmx pages), and that the automatic harnessing of SOAP rather than raw XML was useful.

The new stuff they're coming out with - and which they demoed at Salesforce's conference recently - is significant - partly because of their use of AJAX for some sophisticated drag & drop workflow features, and partly because of the breadth of scope they can handle with their workflow engine.  I can't give it all away here, but be sure to check them out when they launch the new stuff in December.

The ExactTarget team was happy overall with our technology, but were not happy with our licensing.  Running on Windows and SQL Server perpetual licenses, they are charged in a way that's out of sync with their business, and while standard "failover" servers are not charged for by Microsoft, "unutilized production" servers are.  Fortunately, we do have a better offering for them - I believe that the Service Provider License Agreement (SPLA) will be the solution to most of their issues.

If you're a SaaS ISV and you're using Windows, you should almost certainly be using the SPLA instead of perpetual licenses - it's pay-per-use and is a much closer fit to the SaaS operations & cashflow model.

Open Source as the Big Bad Wolf?

Having spent time with inventors, entrepreneurs, and the analysts who love them down here in Silicon Valley, I have come to expect generally positive comments from CIOs about Open Source.  Quite surprisingly, at the IDC Software Leadership Council today, the CIOs on the roundtable were consistently "strongly against using Open Source" software in their organization and "realized that they were placing their companies in jeopardy" with their current lack of governance around OSS adoption.

I was fairly shocked - and no, I'm not spreading FUD nor am I against OSS (as Director of Engineering at Ofoto from 2000-2001, I ran a department that used Linux, Apache, Tomcat, and Jakarta for 100% of development; the only software we paid for was Sybase).  The key issue they all raised was indemnification against IP and Open Source Licensing violations.  Jason Matusow was there and raised the point that the concern is really around commercial vs. non-commercial OSS.  Commercial OSS providers take responsibility for understanding the licenses and resulting restrictions embedded in the software they provide, which appears to effectively deal with the core issues the CIOs were raising.  Despite making these points, the CIOs were not mollified and continued their conservative stance on the topic.

Bob Zurek of IBM was at the meeting as was David Gee of HP - very interesting group of people with whom to discuss SaaS, Open Source, and industry consolidation.  Amy Konary of IDC was insightful as usual on the SaaS topic.  Wonder where the conversations will go from here?

Fortunately, I get to sit down with Palamida later this week and am looking forward to learning more about the expanding business implications of using Open Source.

GPL (Gates Public License)

Great article at Linux Magazine on recent shifts in Microsoft's stance and dealings with Open Source.  I mentioned similar sentiments last month.  Watch this space - this is only the beginning. 

I met with some very sharp guys last night who are going to launch an Open Source business based on the Microsoft platform - very interesting.  I would like to see a dozen new Open Source applications running on Windows - not just .NET versions of LAMP applications (although I applaud Shaun Walker and where he's taken DotNetNuke!) but the "next cool OSS application", whatever that may be (maybe management scripting for Windows & SQL Server environments?)...

The Greenhouse and the Rainforest

My friend Dmitry Dimov came up with an amazingly powerful idea to describe the difference in how we have to think about the services world vs. the software world.  He calls it "The Greenhouse and the Rainforest".

The Greenhouse is the place where things are well controlled, nurtured, given sunlight and food when necessary, and grown in pots in neat rows.  Things work well because they are designed to work well, and the situation is consistent and manageable.

Step outside the greenhouse, however, and you will see the Rainforest - a vast jungle so vibrant and full of life that lightning storms and lack of perfect conditions cannot contain its progress.  Everything ends up interoperating because it has to; not in the most perfect or designed way but in a way that lets everything evolve independently according to its capabilities.

This is the difference between controlled infrastructure and open infrastructure, between object orientation and prototyping, between XML schema and raw XML documents.

The last thing he said is that if you're operating a greenhouse, you'd better look out because the laws of nature and economics are on the side of the rainforest.

Interesting.

The Next Little Thing Isn't Free

Gary Rivlin wrote a great article in the New York Times today on the combination of Open Source and too much money chasing too few opportunities:

Any resemblance to 1999 is strictly isolated, more what might be called bubblets than outright bubbles. Open-source software, podcasting, social networking, security - these and other areas have been so hot at different points over the last couple of years that occasionally prices have inflated wildly.

Open-source technology companies in particular are in demand, with the widespread adoption of the software by corporate users. The group behind XenSource includes a pair of faculty members from Cambridge University and two software industry veterans. The young concern, in Palo Alto, Calif., received a first round of $6 million in January from Sevin Rosen and Accel Partners, also in Palo Alto, and Kleiner Perkins Caufield & Byers, on Sand Hill Road. But by midsummer, the start-up needed more money. "We wanted to scale this up faster than originally planned," said Mr. Sturiale of Sevin Rosen.

"I know of open-source deals being funded almost automatically right now," he said. Many venture capitalists, he added, are convinced that the open-source phenomenon represents a fundamental shift in the software market, "so they want to have a play there." That's what happens, Mr. Sturiale added, echoing others, when there are too many venture capitalists pursing a small pool of ideas.

The important thing to note here is that this is a leading indicator of the future of commercial Open Source, once thought to be the anathema of the Open Source revolution - VCs are putting money in only because they can see ways to get more money out, despite many failures in the recent past.  However, many people I've spoken with use the term "Open Source" very loosely and aren't always clear on why it's a good answer to a given problem.

I believe one of the reasons for this is the conflation of the term Open Source across multiple domains.  Don't get me wrong - I think Open Source makes a lot of sense, but there is confusion here.  Here's a stab at a useful set of distinctions:

1. Open Source as Development Model - leveraged software development approach using a small set of core committers with contributions from a broad community of developers and users.

2. Open Source as Commons - mutual investment into a designated shared property, where all are rewarded disproportionately to their involvement; originally described by Yochai Benkler and discussed extensively at FLORA.

3. Open Source as Business Model - disruptive low-friction distribution and marketing model which enables users to try software that was previously infeasible to acquire due to cost and complexity.

The industry has not yet adopted distinctions between these three meanings (and there are probably good cases to be made for additional meanings).  In the meantime, it behooves all of us as entrepreneurs, investors, and industry watchers to know what we mean by Open Source.

Many variations on the Open Source Business Model are currently in play and many more are coming - but the new wave of Open Source, as the VCs know well, is anything but non-commercial.

Venture Capital Open Source

Death of a Dialectic

Cliff Reeves mentions the strangeness of advocating for the power of the Open Source approach while working at Microsoft.  I agree that this is a nonsensical dialectic whose time has come and gone.  Even Ballmer was quoted recently saying "We don't compete with movements."  The common sense has been to take the Windows vs. Linux competition and turn that into an all-out "us vs. them" situation - both within Microsoft and the Open Source community.

Open Source is a perfectly valid - and frankly brilliant - model for developing software.  In an odd way, it's a combination of Friedmans' Flat Earth and Surowiecki's "Wisdom of Crowds", bringing together a highly intelligent, globally distributed self-organizing community that gets smarter the more challenges are thrown at it.  More on this in the future.

The point for this post is that people are still shouting but thousands of servers running Windows are hosting Apache, MySQL, PHP, Ruby, and hundreds of SourceForge applications - so it may be time to think about how OSS and MS can be less like oil and water and more like peanut butter and chocolate.

Microsoft Open Source