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The Death of Licensed Enterprise Software?
tfsm writes "Andy Singleton wrote a short, interesting article about the looming death of traditionally licensed, proprietary, enterprise software over at The IT Manager's Journal. In it, he talks about the declining revenues of software giants such as Siebel. There are several causes, but one, he suggests, is erosion from Open Source offerings."
Great articles. No sales numbers. No real explination given. Just lots of guesses and assumptions my some guy. I'm impressed. About all I've learned is that Siebel's licensing revenue is down. That, and it's written by a guy whose job is to sell software to big companies. Wow.
I don't respond to AC's.
.. if it isn't "Roll Your Own"?
..
A company which purchases the infrastructure it requires to operate and expand, isn't an enterprise. It's, at best, half of the solution.
If you have a business scenario which is driven by software processes, confronting the software creation, and being fully responsible for the continued evolution of that software, is the only way to guarantee continued survival as an enterprising solution to your customers. Buy something from someone else, and you put the majority of the True Value of your company in someone elses' hands..
Do it Yourself. This is the keystone for future business success.
If its hard, all the more reason to do it in-house
; -- the corruption of government starts with its secrets. a truly free people keep no secrets. --
In addition, the traditional "support" argument is pretty much out of the picture these days.
If you're talking about boxed software then support is limited to a "knowledge base" database and rudimentary and usually dire scripted phone support.
Support for customised applications is expensive and no different to the support contract you are likely to get from a good consultancy that has built your enterprise application on an open source platform.
Depends on your situation, really. If you're a small operation, sure, the free stuff makes sense. But when you're a $4bn+ healthcare operation, you've gotta have someone to sue.
Rather than a product. The problem with software (any information) as a product is that there is no scarcity, it's easy to copy and make more.
Markets require a supply and a demand, to make any information a product rather than a service you have to find a way to limit supply of something which isn't naturally scarce, licenses, keys, dongles etc. Without these, limitations the supply increases to infinity and the price therefore tends towards zero.
You may not like him, but Richard Stallman is a bloody clever bloke. The GPL and similar basically eliminate the artificial scarcity limitations imposed by most commercial software vendors.
Deleted
This trend is definitely true in smaller companies. Why spend thousands of dollars on proprietary software when you can get an open source project for free that you can modify to your heart's content? Granted, you're going to spend time and money to make those modifications, but it can be worth it when you get exactly what you want/need.
Compared to 5 to 10 years ago, the number of open source software apps available now is mind-blowing. So much so that whenever we are researching and deploying a new application, we immediately go looking for the open source one. The proprietary version is a last resort.
Whoever Has the Most Toys Wins!
The commoditisation of software that open source represents is a rising tide. There are two ways to handle a rising tide: float or sink.
Siebel, like many big software firms, are unable to float. They don't use open source for their processes, so don't benefit from it. They are stuck in a niche, so are basically anchored to the sea floor while the water rises around them. Their customers have the choice of remaining anchored with them, and drowing as well, or cutting free and floating.
It's a bit sad if you're in the position of the drowing man. But it's been the same in Big Auto, Big Steel, Big Textile, Big Science, Big Pharma, Big Business... competition is a tough game.
The smart money is on those firms that learn to float. IBM, CA, Novell, Apple. Maybe Sun and SAP. Apparently not Siebel, definitely not Microsoft.
My blog
But when you're a $4bn+ healthcare operation, you've gotta have someone to sue.
That would be your insurance company.
These are some of the most annoying things ever invented, having to mass deploy software and then worry about ... we have 26 students and 25 lics.. Cuz it only comes in 5,10,25.... OMG time to run to the store and buy another one..
Really, software should be lic'ed to an individual company based on the total number of deployments that they have used the past year. That way its fair to the developer, and fair to the end user. Flexable lics would be a very nice thing indeed, getting rid of them all together would be a boon of even bigger proportions!
So just about anybody can be a programmer, and get payed only if his software will be usefull and people will use it. Wouldn't you like to live in that future?
Not really. I've seen plenty of code written by that "almost anyone who can be a programmer" person you speak of. 99 times out of 100 it is complete crap and I wish I had the time I spent dorking with their crap back.
That isn't quite correct. If someone comes up with a nifty utility to base their business on, then yeah, the OSS community will duplicate it in no time, but then, so will commercial vendors.
It seems most of these complaints come from companies who charge money for the most trivial of crap, such as this password generator. Nevermind that it has one of the worst user interfaces ever designed (look at that screenshot), it's a freaking PASSWORD GENERATOR! Trivial software is trivial to reimplement. It's offensive that someone would even charge money for this.
Now if a company develops something non-trivial, for which there aren't already a thousand similar products, this shouldn't be a problem. For example, just try finding an F/OSS product that can compete with 3D Studio Max or Maya. Blender isn't even in the same league. Photoshop? The Gimp is neat for web logos or hobbiest graphics, but doesn't even fully support the most fundamental Photoshop features such as native CMYK color.
Siebel Systems makes non-trivial software, but it is only non-trivial in that it is large. It isn't innovative; it's just a lot of work. I don't know of any OSS products that compete with, for example, their customer management software, but if there are, I would not doubt that it is because Siebel's stuff sucks (I've used it), and some smart developer got fed up and decided to show Siebel how it's done. If they do a better job, should we feel sorry for poor Siebel for losing revenue to the F/OSS guy, or should we root for the OSS project because any multi-billion dollar company which can't make a better project than a handful of F/OSS programmers needs to die?
Another example is the game market. There are neat OSS technologies such as the Irrlicht engine, but Itari and Blizzard aren't exactly concerned about F/OSS games taking over their market. When's the last time you played an open-source game which was even comparable to Farcry, Starcraft, or Alpha Centauri in terms of refinement, scale, and fun factor?
With all that said, I don't see how F/OSS is any different than another commercial competitor. An intelligently run business targets their product to account for competitors' weaknesses and tries to downplay its strengths. Seems to be working for Microsoft, and every single one of their core products have powerful and mature F/OSS competitors, yet their revenue has grown every year.
Specifically, the F/OSS community may be great at making low-level technical stuff, such as libraries, web servers, and DBMS software, but it isn't very good at polishing user interfaces (compare Visual C++ to KDevelop or Anjuta, though this being Slashdot will probably prefer the latter two regardless), at making high-end enterprise software (MySQL is neat but it can't even touch Teradata), or making the absolute highest-performance software (Apache is sort of fast, but Zeus and even recent versions of IIS can blow it away, especially in static page serving [That said, most corporations are even worse at making performance software, using bloatware tools such as MFC to make bloatware apps such as Norton Utilities]).
In short, the reasons given sound like the kind of reasons given by the kind of companies that make password generators or horribly poor quality customer management software and then complain that the F/OSS community is stealing your marketshare. Hell,
Computer Science is no more about computers than astronomy is about telescopes. --E. W. Dijkstra
Now, I'm not a Open Source freak at all, but I know that by looking at the trends in Open Source software. Aside from really powerful speciality stuff, the Open Source movement is very quickly catching up on all fronts.
Mostly due to two factors.
1. Last programmer base. Lots and lots of people are coding open source software, and it seems the more people who code it, the more people who want to code it. So slowly, the curve grows more and more vertical with development. As well, more and more companies are actively supporting Open Source and adding a lot of umph to the movement.
2. Open Source code that is being used never goes stagnant. If people are using it, it's getting updated and modified and cleaned up. Unlike Windows XP, which has not significantly changed since it's release, there have been many significant good and useful improvements to a variety of good Open Source projects, and if the project does the job you need for free already, you may as well use it. Case in point: CuteFTP Filezilla. I used to use CuteFTP until Filezilla became significantly more stable and had better features.
You cannot beat Open Source using any corporate strategy, unless you are willing to put as much money as they have people. The best strategy right now, from what I can tell, is to do something similar to Net Integration, or other companies like that. Take an existing open source project, and make the saleable feature something truly new and revolutionary. Competing against open source is truly an uphill battle. Especially when you can just use the open sourced code, and make it work well for yourself.
Just my thoughts.
~ kjrose
Read the author's bio:
Andy Singleton is president of Needham, Mass.-based Assembla, which brings "inspired by open source" applications and development processes to enterprise software.
His business is implementing enterprise open source software. Of course he's going to say that that's the future.
I think the key point of your argument was this:
Pay for a contract and you will get highly knowlegable engineers to solve whatever problem that crops up within the confines of the contract.
This is true whether the software in question is a based on closed-source or open-source. You need to find a vendor who will meet your business needs first; whether that solution is closed- or open-source should be a secondary consideration
Open-source software allows more businesses to get into the "Enterprise Software" business by using existing (Free) products that they're free to tailor to customer requirements, and the customer is free to find a new consultancy if the old one goes under / is bought out / starts to suck.
After numerous dealings with "Enterprise" software (read: $$$) 90% of the time I end up dealing wtih a reseller/parter/consultant/whatever who is just a $140/hr guy with a certificate who's just going to call support and/or lookup my problem on the website. And usually these guys fly in and start loading software on any server they happen to spot 'cause that's the way they did it in the class. And they have no knowledge of the difference between an app server, SQL server, or anything else. Nor do they know what thick or thin clients are nor can they tell me wheether I'm going to run into bandwidth, CPU, RAM, or disk limitations first. Recently, I had these problems with a well-recommended "parter" selling us SAP Business One.
I think there's something your forgetting about television. They are supposed to pander to the lowerst common denominator. You know why? The viewers are not the customer. The advertisers are the customer. The viewer is, get this, the actual product.
Picture the TV networks as a fisherman. The advertiser is the customer who buys the fish. The viewer is the fish, and the television shows are the net that he casts. The thing is, most diners want tasty fish, so you use the kind of net that usually gets the tastiest fish around. In the case of advertisers, tasty fish are gullible viewers, stupid people who's purchases are strongly affected by the commercials they watch. So, the television networks cast the type of net that will draw in these tasty fish, and that's why the news is so dull and trite, why sitcoms just aren't funny, and why reality TV is the king of television. Because the viewers are the product, not the customer.
I'd imagine that the story is pretty much the same with cable TV, even though the product has to pay a premium to be sold to the advertiser. Commercials are supposed to be appealing to gullible people, not intelligent and rational people. Movies are starting to head in the same direction with previews getting longer and longer, product placement, etc. As a larger portion of the studio's income is earned through advertising then the viewer becomes more and more product and less and less customer.
Radio stations, same thing. That's why any free thinking, truly rocking station quickly gets replaced with cookie cutter ClearChannel programming. Because the advertisers want tasty fish. The sort of fish who are amused by "two annoying guys with wacky sounds and their bemused female sidekick with an occasional bitter tongue in the morning."
RIAA, they're making plenty of money. And buying enough laws to make sure that the money keeps rolling in. The DIY or die indie scene has been rallying to take down the establishment ever since punk rock in the seventies, and guess what. RIAA just keeps getting more and more power by producing shittier and shittier music (but at least they are giving the consumer less choices. Seriously, most major labels are cutting back on the number of artists they are officially promoting.) Every now and then the major labels will come out with a new "artist" that looks to be a rebel, and so conforming to the teenage ideal of what a musician should be. That veneer is usually gone after a couple of albums and people start to see the strings that are really moving the puppet.
Wow... that was a really nice rant. Gotta keep that one in my archives.
I'll never make that mistake again, reading the experts' opinions. - Feynman
One thing I noticed about a lot of these packages is that they often have terrible underlying data models, or at least data models that do not fit a particular business well. They tend to throw indirection and duplication at the problem. Perhaps this would not be a big problem if the package hid the underlying mess from the users, but if you ever want to extract and use data from such monsters, which is a common request, you have my sympethy.
If you want to make a better tool, allow one to model the particular company, sticking with certain conventions for hooks into the package.
Or better yet, sell development and expertise to help companies build one to fit their own company. In other words, become a domain expert company instead of software box company, and market that expertise. "We know how to build sales-force systems" instead of selling a pre-packaged blob of software. Such a company could still sell software, but in bits and pieces or as part of a bigger semi-custom-built package. Build a Lego kit that fits sales-force software (for instance) instead of the whole deal itself.
Domain specialists seems to be a missing software-related niche.
Table-ized A.I.