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MySQL CEO: Open Source Is Software's Game of The Future

Marten Mickos, CEO of MySQL AB, gave a keynote address at the Software and Information Industry Association software strategy summit in San Francisco yesterday. His topic was "Building A Sustainable Open Source Business." Like a good hockey player, he advised the audience to "skate to where the puck is going to be."

In the course of his talk to an audience of primarily commercial software company executives, Mickos said open source code is not one of several business models, similar to selling software through license fees. "Many people think of open source as a business model. I don't," he said.

"I think it's a smarter way to produce goods and a smarter way to distribute them," he added.

Many observers of how open source companies operate have come to the same conclusion. To be branded an open source company, such as Red Hat or MySQL, still leaves open the question of what type of business it is. But open source companies have in common the attribute of substituting a community development process and a free download distribution process as their R&D, marketing and sales. These costs amount to some 70% of a commercial software company's expenses, he noted.

That doesn't mean development is free, Mickos added. On the contrary, development at open source companies, with key developers on staff, is about as expensive as at commercial companies. But because a user community with an interest in the open source project is diverse, chances are high that it will subject new code to widespread testing, yielding higher quality. And problems encountered by one user may have been solved by another, offering deeper technical support through the community.

Open source companies must still decide whether they are adding enhancements to baseline open source code for a commercially licensed product; selling services on top of code that’s always free, such as consulting and installation; or charging a subscription that rolls several services together and includes upgrades, as Red Hat does.

Mickos said open source companies like Red Hat, which pulled in $406 million in revenues in fiscal 2007, "are still at a very early stage of their development," he noted. He thinks the future of MySQL AB and other open source companies are just beginning to realize their potential.

In the process of talking about the nature of open source code businesses, Mickos aired one of his favorite quotes, which might apply to some of them: "Success consists of going from failure to failure with undiminished enthusiasm," a comment by Winston Churchill.

Another was Wayne Gretzky's, "Skate to where the puck is going to be," and in software, Mickos thinks the puck is moving in the direction of open source code.

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