A New Model: Open Source Software After It's Acquired - InformationWeek
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A New Model: Open Source Software After It's Acquired

From MySQL to XenSource, open source companies are in increasingly high demand. For users of the software, it presents a new set of questions.


Sun isn't the only big vendor breaking new ground with the integration of major open source software projects and companies. Same goes for Citrix Systems, which acquired XenSource and the expertise behind the Xen hypervisor for $500 million in October; Yahoo, which acquired Zimbra and its desktop application suite for $350 million in October; Oracle, which bought Sleepycat and its BerkeleyDB embedded database for an undisclosed amount in February 2006; and even Linux distributor Red Hat, which acquired JBoss and its Java application server for $350 million in June 2006.

Over the past 24 months, a premium has been placed on open source code, as it moved from the backwater of the enterprise to the mainstream. In the process, open source has become big business. The idea: Develop open source code quickly; make it available for free download in hopes of winning early market momentum; rake in some technical support revenues as the code develops an enterprise following; and cash in via an acquisition by a deep-pocketed vendor.

The movement highlights how much has changed from the days when the Apache project was started by a bunch of volunteer developers who built--and then gave away--the world's best Web server. Such contributions still occur, but open source projects increasingly started as a commercial enterprise, or morph quickly into one. Hyperic, Terracotta, SugarCRM, MuleSource, SpringSource, and dozens of other open source outfits aimed at business IT hope to follow in MySQL's and JBoss' footsteps.

Nokia acknowledged the open source momentum in June when it said it would acquire Symbian for $410 million, then make Symbian's popular mobile operating system available as open source code. In doing so, Nokia hopes to neutralize a fledgling Linux mobile platform and steal a march on Windows Mobile. It also hopes openness will spur creative application development, giving people new reasons to buy high-powered phones. Nokia could have spent more on marketing and sales; instead, it invested in open source code.


For businesses using open source, the biggest risk in the acquisition of those projects is a weakened community, where the core developer relationships fall apart. One of the biggest business advantages of using open source code is the ability to tap into software that iterates quickly and transparently, incorporating a range of new ideas.

At its best, open source software provides businesses with a fast, low-cost way to deliver something the market is ready to try. Charismatic project leaders attract skilled developers, who self-organize into a fast-moving team motivated by the ability to contribute to solving a problem. Ross Mason, CTO of MuleSource, producer of a lightweight enterprise service bus used at financial services firms, and Rod Johnson, CEO of SpringSource, the lightweight Java development framework, are two such personalities. The team attracts outside contributors, users, and reviewers, who give early feedback that helps the open source code become a business-ready product. JBoss started as such a project under Marc Fleury.

At small companies like JBoss, MySQL, Sleepycat, XenSource, and Zimbra, leaders are in direct contact with users and work personally at building a community's trust. Almost everything happens transparently on mailing lists and online discussion forums. When those leaders step inside a much larger company, at least some transparency--and trust--is lost.

When Open Source
Is Acquired
• Weakened developer and user community relationships
• Leadership walks away
• Development moves away from open source, toward proprietary products
• Innovation slows, and long-shot enhancements have no channel

• More paid developers working long-term on project
• Access to larger, enterprise IT customer base
• Project becomes part of larger

Six weeks after the MySQL acquisition, Sun had what one observer called the dreaded "Slashdot moment." On April 16, Sun announced it would launch a backup system for MySQL invoking advanced features including compression and encryption as a commercial product for which people would have to pay. The announcement was met with a flame war of protest on the open source discussion board.

Until this point, all MySQL offerings had been freely downloadable, rather than one free "community" version and a more advanced, feature-rich version for a price. Having a free and a for-fee version is hardly unheard of in open source projects, but it's a tricky transition when people are hooked on getting the best version for free. "For those of you who put your time into helping MySQL become a great DB, and who must feel like a child kicked in the tummy by mother, my condolences," said commenter Margrave, the day after the news broke. "Maybe we'll see a fork."

If a second open source version of MySQL veered off from Sun's subscription version, such a fork could divert developer focus, something business users don't want. Likewise, the community worried that MySQL's focus would shift to proprietary additions, rather than free, open source offerings. Open source companies are judged by the developer community in part on how much of their code they make freely available. Keep the finest bells and whistles for commercial products, and the risk is that enthusiasm to contribute wanes.

Sun backed off charging for encryption and compression. "We listened to the reaction, we've had time to reconsider, and that was done," said Rich Green, Sun's executive VP for software, in an interview in May during JavaOne. The enterprise-friendly enhancements were added to the core system instead.

However, it was revealed later that MySQL's open source founders had planned the same move in hopes of boosting revenue ahead of an IPO filing. The incident shows that an add-on product that might have been sold by an intact, small open source company faces greater suspicion once that company is part of a major vendor.

A related risk to losing or fragmenting the developer community is losing the open source company's leadership. Sun so far has retained CEO Mickos, VP for products Zack Urlocker, and other MySQL execs, who are among the most experienced at walking the tightrope between community interest and profitability. Mickos walks that line deftly, and Sun executives who want to lead the company in MySQL's direction can learn a lot from him, says Fielding, if Sun "thinks of itself as part of the community, not the leader of the community." Johnson, originator of the Spring Framework and someone who has worked with Sun through the Java Community Process, says he has been encouraged lately by Sun's efforts to open up Solaris and Java. Johnson says he feels "more positive" about Sun's ability to produce good open source code and relate to open source communities, and about the the potential for the MySQL organization to thrive inside of Sun.

Asked in April if he's concerned about Sun's acquisition of MySQL, Bruce Lowe, owner of Center Stage Software, a maker of show business events software, said he tends to believe CEO Schwartz will protect MySQL's open source integrity. "Better to be acquired by Mr. Schwartz than Mr. Ellison," Lowe said.

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