What Do You Care What Other People Think?

Why It's Called the CodePlex Foundation

It's taken from www.codeplex.com, an open source project repository built by Microsoft a few years ago that has now expanded to host over 10,000 open source projects built by individual developers as well as roughly 500 by Microsoft employees.  The "code" part of the name refers to the source code which is the substance of an open source project.  The idea behind "plex", like metroplex or building complex is that it's a commons which serves a wide range of individuals. 

The CodePlex Foundation (www.codeplex.org) is intended to serve a wide range of projects, regardless of platform or technology base, to enable the exchange of code and understanding among software companies and open source communities.  Many people benefit from open source software, but a small number of people contribute back.  It seems to us that software companies should be in a very good position to contribute back based on employee skills and the benefit that these companies derive from specific open source projects, but in our experience there are a variety of obstacles that prevent or reduce contribution.  These range from development culture to copyright and patent licensing practices.

We are working with the leaders of other foundations, including the Apache Software Foundation and the Eclipse Foundation, to ensure that the CodePlex Foundation is a useful complement and enables community-based open source projects to expand their reach through increased contributions from software companies.  We are also receiving a great deal of thoughtful input (including Andy Updegrove's article and the community input on our Google Group).  There's a long way to go - this really is a brand-new startup and we are clearly in the alpha release - but from what I've seen I'm very optimistic that we can provide value to open source community projects.

Moving on and the CodePlex Foundation

After 5 great years at Microsoft I am moving on.  Yesterday, the creation of the CodePlex Foundation was announced, as well as my departure from Microsoft.  I'll be joining a cloud computing startup later this month in Silicon Valley.

It was a hard decision, as the time I've spent at the company has been both challenging and rewarding.  I remember a sense of disbelief when I first interviewed for the Open Source Technology Strategy role in December 2005 and Bill Hilf told me that one of the core responsibilities of the job would be a quarterly briefing with Bill Gates and Ray Ozzie on open source technology trends.  On the other hand, he said it would involve external public speaking - primarily to fairly polarized audiences.  That was a doubly scary proposition as I was not a public speaker and I knew the audiences quite well, since I'd competed with Microsoft for many years in prior companies and used Slashdot as my homepage. 

I was certain that open source was an industry wave that Microsoft would not be able to ignore, and that it was getting closer to an inflection point.  I had spent over a year at the company in the Silicon Valley-based  venture capital team under Dan'l Lewin and Cliff Reeves, and I could see that the company's approach to disruptive market dynamics was starting to change.  No matter what happened, I was sure that being at the center of the open source team at Microsoft during the coming years would be fascinating and important.

46 months later, I am amazed at the changes that have occurred for the company, for the team I belonged to, and the sentiments of the industry.  There is much work left to be done but the distance we traveled was remarkable.  I have a feeling that I'll be reflecting on this period for the next several months, so I won't try to cover it all here.  Matt Asay wrote a very generous article with a brief reflection of the changes which is here.  I've learned an enormous amount thanks to the intelligent, energetic, and fearless people that worked for me, the bold and honest open source community leaders who engaged with me, and the Microsoft executives who supported me.

I have heard some strange speculation on why I'm leaving and the answer is simple - for personal reasons, my wife and I have decided to move our family back to California.  I had many discussions with executives at Microsoft about how to continue my work from here, and received a warm reception along with a range of opportunities.  Ultimately I decided that I could not do justice to a corporate/worldwide position from afar, and that I could not bear to live away from my family and commute to Seattle five days a week.

So the change is made, and it has been very challenging.  But it's now complete and I am excited to launch the CodePlex Foundation and join my new startup.  As a close friend told me this week, "The best is yet to come" and I do believe that.  To everyone who has helped bring me this far, I say thank you; I am very grateful.

Architecture Strategies for Catching the Long Tail

Fred Chong has completed his work on the overview of the architectural guidance for building Software-as-a-Service (SaaS) applications on Microsoft infrastructure.  If you haven't seen it yet, check it out.

Fred spent several weeks in the field with SaaS providers who have built their applications on Microsoft in order to understand the key issues core principles in building a scalable, multi-tenant on-demand environment.  Many of the companies they worked with are startups managed by the Microsoft Emerging Business Team (EBT), and I had the privilege to connect with some of them.

The EBT is actively reaching out to and working with SaaS providers building on the Microsoft platform in order to improve their market exposure and business relationships.  If you are interested in connecting with the EBT, check out their SaaS page and drop a line to SaaSMS@microsoft.com

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.

SaaS Architecture Guidance

I've had the privilege to work with Fred Chong and Gianpaolo Carraro, a pair of extremely bright guys who work in the Architecture Strategy group.  They have a passion for SaaS and are applying themselves energetically to mapping out the space of SaaS application architectures.  They realized that there is very little guidance or documentation on best practices for SaaS architectures in the community at large - while there is some shared knowledge and a set of conversations, no hard documentation exists in any comprehensive way.

Fred is now on a mission to build definitive guidance on how to grapple with tough issues like multi-tenancy (including defining what that means), security, customization, metadata, and operations readiness.

Fred has posted the outline of the SaaS architecture guidance book that he is developing on his blog, and I'm pasting some of the chapter outlines here as well.  Fred is an expert in Identity Management and Web Services management (he literally wrote the book for WSM at Microsoft), so he knows what he is talking about.

1. Introduction
2. Business Model
3. Application Architecture Overview
4. Scaling 101
5. Data Management
6. Tenant Management
7. Tenant Customization
8. Application and Data Security
9. Programmable Software Services
10. Programmable Software Service Consumption
11. Instrumentation and Monitoring
12. Configuration Management
13. Metering
14. Infrastructure Security
15. Operation Structure

If you're interested in this, drop by Fred's site and take a look - better yet, send him an email and tell him what you think.

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.

Where are the OSS/BSS companies for SaaS?

Most of the companies I've spoken with have had to build their own OSS/BSS systems to run their Software-as-a-Service operation.  Provisioning, metering, and billing are core business functions for service delivery organizations, and while there are custom aspects to them, and hence good reason to build your own, there are probably better reasons to buy them off the shelf… if they were available.

Companies like Portal Software and Convergys have long supplied these systems to the telco industry, yet I've seen no indication that they are moving to engage the SaaS segment; nor have I heard of VC-backed startups targeting this critical infrastructure space.

A related need is that for a robust pricing engine that is capable of handling multiple pricing schemes (i.e. per transaction, per user-month, or per CPU-month).  Again, this is a core business function, and as we saw in the great Telco battle between Verizon and AT&T Wireless, the winner is the one that can combine their difference service assets into the widest variety of packages.  The story behind this (from my perspective) was partly due to integration (Verizon made the investments required to integrate their dozen-plus backend billing systems) and partly due to pricing & packaging - the ability to target a new demographic or customer segment with a custom package that is more attractive than the competition.

One quote I heard in the last few months - and I apologize, I have forgotten who said it - is that in the end, telco margin per customer is probably the same between "friends and family", "small business", and "enterprise" packages… but the success of the business is in crafting the package that feels right to the target customer and incents them to make the purchase.  So Verizon won, because they used their pricing agility to win new customers.

The corollary for SaaS that I'm taking away is that pricing flexibility is going to be key to competitive advantage… which brings me back to "where are the OSS/BSS apps for SaaS?"

Scoble Interview: Enterprise Mash-ups

I got the chance to sit down with Robert Scoble for 20 minutes last Friday.  The thing that has puzzled me recently is whether mash-ups are for real, or just another Web 2.0 buzzword.

So I asked Robert: "Are mash-ups going to make a real difference outside of the digerati - do you think they'll make it into the enterprise?"

His take was: what's to prevent mash-ups from being the main way that departmental apps are built in most enterprises 3-4 years from now?

We've seen composite applications pitched for years, with some very cool companies like Digital Harbor building development environments for constructing them, but in a way mash-ups are an even simpler way to build a composite application - pull together a set of ICCs (still looking for the definitive term for this, as are others, it seems - see Harry Pierson's discussion).

So what would an enterprise mash-up server look like?  How would it have to be packaged in order to be adopted by departmental users?  Would it be hosted like the other new technologies that are breaking into departmental use (salesforce.com, MarketTools, ExactTarget, etc.) or would it need to be a local server?

One of the other issues Robert raised was that of attention, and its necessary evolution to make the computing experience more useful.  Currently, attention is captured and processed only on the server, which makes for some thorny issues about trust (who am I trusting with my attention data? and why?).  To deal with these issues it seems to me that there will need to be a client-side standard for attention, implemented by browsers for inter-ICC communication, as opposed to relying on the server to have good behavior.

Then, in a twist of synchronicity, I got to talk with a very early-stage company building a mash-up server that can run on the client or the server.  It's in stealth so I can't disclose much more yet... but I am becoming convinced that this programming model could be just the thing to build SaaS composites on.

[Updated to add reference to Harry Pierson's entry.]

Contrary Evidence at the SLC

At last week's IDC Software Leadership Council, opinions on Open Source were not the only surprise.  The IT Execs from 4 companies (Manufacturing, Healthcare, Heavy Equipment, and Financial Services) were generally against subscription models for software.  As the conversation progressed, two key statements came out:

1. The CIOs did not want to go with subscriptions because if their business grew beyond expectations, they didn't want to pay the software provider more ("Why should we share the upside"?)
2. The CIOs did want providers to reduce pricing if their business failed to grow to expectations

I think this was a case of two things - first, the natural expression of greed (wanting vendors to share the downside but not the upside) - but more importantly, a need for the industry to provide clearer guidance on standard pricing models.  There was a clear conflation between value-based pricing and usage-based pricing in the mind of the customers.  Additionally, they were concerned that in the long run it would be cheaper to go with perpetual licenses and pay maintenance, dealing with amortization internally, rather than pay a subscription cost which would never go down.

So where do we go from here to advance the understanding of the SaaS industry's offer to CIOs of mainstream companies?  Are the doubters right, and will SaaS fail to penetrate large enterprises because of these issues?

Disruptive Innovation and Darwin

I have great respect for Clayton Christensen, who has done serious work putting real meaning into the term "disruptive innovation".  He's quoted in the latest Newsweek article on Skype, saying:

Still, the novel pay schemes "are hugely interesting," says Harvard Business School professor Clayton Christensen, who cites both Kazaa and Skype as great examples of the "disruptive innovations" he studies. "It's almost never the technology itself that paralyzes the incumbent—it's that the incumbent has a system for making money that's irrelevant to the new guys."

The combination of companies growing up after the bubble burst, dealing with recession and market pressure by using free software and then reducing customers' cost to use through "rightsized" pricing (moving amortization costs of hardware and software from the customer to the vendor, and reducing overall management costs through centralization) has produced some very fit organisms - not unlike biological organisms that have deveoped in impoverished environments, they may be tougher than the incumbents of enterprise software.

Axel Shultze of BlueRoads has said that no one originally set out to get to the current state of SaaS - it was a series of changes to fit the customer environment that led the industry here.  It will be very interesting to see where the intersection of pay-as-you go and ad-funded software business models leads us next.  I think Darwin would be having fun right now watching this industry evolve in real time.