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Looking Back at Open Source in 2005

bhmit1 writes "BusinessWeek is reporting on the open source progress in 2005. Their conclusion: "in 2005, the software movement finally gained traction in Corporate America and saw a new influx of VC cash." Has the shift in corporate america really occurred or are activities like the profitability of Red Hat signalling that the CEO's are still holding on to the old way of business?"

17 of 112 comments (clear)

  1. huh by dajobi · · Score: 5, Insightful
    Has the shift in corporate america really occurred or are activities like the profitability of Red Hat signalling that the CEO's are still holding on to the old way of business?

    Old way of business = profit. New way of business = ???

    Seriously that doesn't make sense. Surely Red Hat's profitability indicates that they have a handle on the new way of doing business.

    1. Re:huh by bhmit1 · · Score: 4, Insightful

      You're thinking about the business model of Red Hat itself, which is a good one. I was referring to the business model of the large corporations who seem to be saying "open source is great, where do we buy it from?" Support is a great argument to pay someone else, but that choice frequently backfires. Support organizations make their money by hiring cheap labor and postpone resolving the problem until the customer frequently does it themselves, or blames someone else for the problem. I've seen it happen so often, that I don't understand why managers think support provides a valuable benefit for the cost.

      So the better business model for larger organizations would have a stronger IT organization that has enough capacity to understand the applications they are implementing and provide support internally.

      For smaller organizations, I think they are better served by getting a local resource that they can call for problems and that performs a checkup a few times a year just like that organization would do with legal and accounting services.

      And for the record, I don't think we've crossed the threshold yet, but it's interesting to see what the business types are watching.

    2. Re:huh by Directrix1 · · Score: 1, Insightful

      I'm suing you because you stole my:
      1. Step 1
      2. Step 2
      3. ?????
      4. Profit! ... template idea. Seriously, thought processes can and do evolve simultaneously given similar environments. And communal usage of an idea almost always only helps the industry progress.

      --
      Occam's razor is the blind faith in the natural selection of least resistance and in universal oversimplification. -- EF
  2. Be happy, not excited by SilverspurG · · Score: 4, Insightful
    Industry estimates show some $400 million was invested in open-source startups in 2005
    All $400 million? That's enough to buy Bill Gates' lunch, maybe, if he's eating light that day.

    The market is still dubious about open source and for good reason. The big players, the ones pushing around 400 billion dollars, still control the legal avenues and we've seen that the legal avenues are being used in many ways to hedge out the OSS players. If $400 million in VC was invested in OSS startups then it really was venture capital in the truest sense of the term.

    I'm happy to see OSS getting a foot in the door but I'm not going to break out the champagne and glasses until we see some real reform on both the business and political fronts.
    --
    fast as fast can be. you'll never catch me.
  3. Support is King by JumpingBull · · Score: 5, Insightful

    IBM learned long ago that ongoing support generates a constant revenue stream.

    That lesson was not lost on Novell, Redhat and I believe Ubuntu is following the same path

    I think that we will see the application services and support companies running up the revenue stream. However, it takes talented people to seed this activity; one with a proven track record. I have been told that a VC looks briefly at the business plan, just to see it is thorough, knowing full well that as soon as the business opens it's doors, that plan will change as the prime movers identify the hot market needs.

    So the quality of the people in the enterprise, and their successes is what gathers the most attention from the VC. It is the people that will make or break the business.

    --
    This is progress?
  4. Companies want someone to yell at! by ErichTheRed · · Score: 4, Insightful

    Has the shift in corporate america really occurred or are activities like the profitability of Red Hat signalling that the CEO's are still holding on to the old way of business?

    The reason why open source vendors who act more like "real" companies do well is because corporate IT absolutely demands that they have someone to complain to when everything goes to hell. Imagine you're the CIO of a 25,000 person company who depends on its IT systems to make money. I think you'd be foolish to trust that the crew of experts you hired is going to stick around, and be able to solve any problem that comes up. Sooner or later, something high-profile will die. Who do you call??

    Companies like Red Hat enforce standards in an open source world that really doesn't have very many. They sell RHEL with the promise that you'll get tech support as long as you use their packages and software. That's a compelling argument. One thing I've been impressed with is commercial vendors' ability to call in massive amounts of help when a real emergency occurs. Red Hat, Novell, etc. are capable of that. Even if you have a support agreement with the makers of fooPackage, which happens to be the crucial link in your business process, can they guarantee that they'll work with you as long as it takes to solve a problem. Worse yet, let's say it's a multi-level problem between fooPackage, barPackage and blahPackage. Now you've got "dualing vendors" on your hands all saying "it's not our problem." Not that that doesn't happen in the commercial world, but a commercial OS vendor (Sun, Microsoft, IBM, etc.) is helpful in mediating those fights.

    The Red Hats and the Novells are going to be the ones who finally get a Linux desktop on the market. That's because they'll pick one office suite, tweak the hell out of it, and make it a standard akin to MS Office. Companies want to know that their training dollars aren't going to be wasted. Most users learn one software package to do their jobs, memorize the commands, and will not readily learn anything new. That's what the Linux desktop is up against.

    1. Re:Companies want someone to yell at! by richlv · · Score: 4, Insightful

      we just recently had a "situation" with a big, well known commercial vendor and their "enterprise" system.

      the application supports only ancient operating system. and an unpatched version of it. nobody knows wether there will be a new version that would support something else.

      then, without a warning, a new beta version is released. nobody knows wether this version will support a newer version of chosen operating system. support is silent.

      public download is available. file, sized 1.5gb and containing "multiplatform" in the name. when finally downloaded, turns out, it contains only a version for a single platform. support does not respond to questions about versions/platforms supported (it is in beta already, remember).

      and this is for a bloody PAYING CUSTOMER.

      oh, installation of the software takes some 7 manual steps, each including a lot of obscure prompts and chances to screw something up. from 8 installations at the education lab _none_ is able to finish on the supported platform, there are no error messages. almost each install stalls at a unique point. the best was a finished installation that was unaccessible for unknown reason. of course, software is closed source, so good luck figuring out what is wrong.

      screw big vendors. we have had similar experience with most of them - and problems are either solved inhouse, or we find ways to avoid them.

      I think you'd be foolish to trust that the crew of experts you hired is going to stick around, and be able to solve any problem that comes up.

      well, from my experience that is the only thing you can trust (of course, by designing systems both from technical and personnel viewpoint very carefuly). unless you can make or break their business, big vendors don't give a shit about your problems even if you are a paying customer.

      now, it is somewhat different with all these linux vendors, i assume - you get a support (and, at least at this state, they are interested in solving problems fast and nice) and if the support is unable/unwilling to help you in required time, you can tap into internal resources or look for help elsewhere. i believe that should be a requirement for any serious information system.

      --
      Rich
    2. Re:Companies want someone to yell at! by ErichTheRed · · Score: 2, Insightful

      I hope that wasn't with a top-tier support contract they could offer you. If it was, then I see why you can't stand big vendors. Some are really bad. HP is a good example...they don't seem to know what products they produce from day to day.

      Believe me, I've been in your shoes trying to get Oracle, BEA, RedHat and HP to play nicely together.

      As a counterpoint, think of this scenario...
      1. CEO reads airline magazine article about open source, tells CIO to get right on it. Also stipulates that only "free" versions of products (i.e. Fedora vs. RHEL) be used. When warned about the insanity factor for this decision, CEO rebuffs CIO and says to get trained staff.
      2. CIO realizes he doesn't have OSS expertise in house, and either trains his existing staff or brings in a crazk squad of experts.
      3. After many fits and starts, System X is running in production and documented.
      4. 20 of the 25 members of the crack squad quit for a better job offer.
      5. A year later, System X fails spectacularly. CEO calls CIO and says the downtime clock is ticking at $1M+ a minute.
      6. Turns out the documentation the crack squad wrote on all their code changes was incomplete or left out the "little hacks" that make the system work.
      7. Call up RedHat. No support for Fedora.
      8. Call up Apache. No support without a contract.
      9. Call up YetAnotherCoolSharedLibrary.h coder in some other country. Sorry, it's free software, can't help you.

      Your choices at that point are to hire consultants and write checks bigger than support contracts would cost, or to find the crack squad members again.

      Your argument's valid because big vendors really do suck, but the alternative could possibly be worse.

  5. Re:this sounds like an excellent idea by Anonymous Coward · · Score: 0, Insightful

    Well, it's good to set goals for yourself, but this seems a little impractical. If we assume Slashdot has a hundreds of thousands of readers in many countries, time constraints alone could prevent you from realising this. And how are you going to cover your travel costs? Or do you expect each and every one of us to come to you? Have you thought about age restrictions? And the fact that very probably not everyone would consent to this? You could very well find yourself arrested before you even manage 10% of us. I really don't wish to spoil your fun but I think your idea deserves some more careful thought and planning before it can be feasible. Good luck!

  6. Re:Really occurred? by Anonymous Coward · · Score: 5, Insightful

    Office suites are a bad idea. MS Office is proof of that; it's the best product in its category, but it still really really sucks.

    I hate comparisons like this. They are so useless. It's like saying the Babylonians were the best mathematicians in their day, but they were really, really stupid. Or the Germans were the best physicists in their day, but they were really, really bad at physics.

    You can gain no insight whatsoever with such a statement.

  7. Re:Really occurred? by linuxphile · · Score: 2, Insightful

    Open-xchange and Hula are both promissing. I would say that the Open-xchange version supported by Novell/SuSE is everybit as good as MS Exchange. Have you tried it?

    --
    http://linuxphile.org A lust for linux.
  8. My Impression by Anonymous Coward · · Score: 3, Insightful

    I think open source did very well. We've seen some enhancements to KDE and Gnome, and even VI. I think UNIX as a whole has surpassed all obsticles that we couldn't have foreseen coming and I only hope things will get better. I have converted many over from the dark side to Linux/UNIX operating systems. I am also doing my part by contributing to a few open source programs in my free time. The movement is only growing stronger and will eventually overcome corporations producing closed source software because we as a community do not have to answer to shareholders. We do not have to meet unreasonable deadlines, we are developing for other users and we tend to get it right the first time. I look forward to contributing more code to various open source projects in 2006. If fact, it is one of my New Year resolutions :)

  9. One word: by Dystopian+Rebel · · Score: 3, Insightful

    Ubuntu.

    --
    Rich And Stupid is not so bad as Working For Rich And Stupid.
  10. Re:Issues with Open Source by Anonymous Coward · · Score: 2, Insightful

    Recommending a customer to go with Linux would have required them to use GFS to keep it supported by Redhat, however there is no Veritas or Legato backup agent for GFS at this point in time which means they would have had issues backing up the file systems or having a system that would have been completely un supported.

    Excuse me sir, but this is an issue with Legato and Symantec (Veritas), not with Red Hat, Linux or Open Source. Legato and Symantec both claim to support Linux, but obviusly this support leaves a lot to be desired.

    It amuses me that when this (broken third party apps) happens in Windows, user's don't call Redmond but the vendor of the broken app.

    In conclussion, talk with your preferred backup software vendor, and if they are not helpful, look for an open source solution. Maybe Red Hat can give you some hints.

  11. Re:It's about time by Bert64 · · Score: 4, Insightful

    Training costs are a one-off, and exist because people are trained by repetition, and can't deal with something slightly different..
    Training costs will exist wether you convert to opensource or not, when you upgrade your proprietary software there will also be retraining costs associated.

    Support costs may increase temporarily whenever anything new is introduced, and will settle down once people get used to it. This goes for proprietary software and even hardware too.

    External support costs are likely to decrease, since companies will have to compete with each other to provide OSS support, whereas a proprietary vendor pretty much has a monopoly on support of their own products..

    Conversion costs will also occur in any case under oss or proprietary software, when the upgrade cycle occurs every few years..

    Future conversion/upgrade costs are likely to be much lower, since opensource software typically adheres to standards and is easy to replace with other standards compliant software.

    Open source doesn't force you to upgrade, if you have an external support-provider who is willing to continue supporting a 10 year old version of linux you've no reason to replace it unless you WANT to. On the other hand, support vendors for proprietary software can't provide you any fixes without the original vendor's help.

    To give some insight, i provided a few NAT/Email boxes to a few local businesses in 1997.. These boxes run redhat 4.x and typically sat on a pstn dialup when first installed.. These companies pay every month, and i patch the systems against any security flaws if necessary, and update them to handle new types of network connection (dsl etc).. I also add/remove users etc, if requested..
    These boxes just provide a nat gateway, and email services so users behind the gateway can read their mail.. Aside from a couple of hardware failures (no real issue since everything is backed up) nothing has gone wrong with these machines, and they're still patched up and secure.

    --
    http://spamdecoy.net - free throwaway anonymous email - avoid spam!
  12. Re:Issues with Open Source by Exter-C · · Score: 3, Insightful

    The problem is with open source from the management view of things. It may not be something that you agree with but when you take a very simplistic view of things.. "it works with Solaris, It works with HPUX, it works with windows.. Linux must be the problem".

    Unfortunatly its all about comparisons of products that people are familure with and know work. Once there are working products in those segments enterprise will have very little to moan about.

  13. Re:Issues with Open Source by spyowl · · Score: 2, Insightful
    Vender interoperability. Redhat Enterprise Linux 3 and Enterprise Linux 4. Some commercial applications will not work properly on 4 but will on 3 because of the compiler/libraries they had used to build the code.

    What? Likewise, many closed source proprietary software vendors will support their packages on Windows 2000 but not on Windows 2003. So, guess what - many businesses are running a mixture of Windows 2000 and Windows 2003 servers for this reason alone. When the next version of the Windows server OS comes out, many vendors will hold out their support for it until months and sometimes years later. Your argument makes no sense; and it suffers from the same fault as many other posts with the "ahh, I know what's wrong with open source - it's XYZ" while the case of that XYZ is the same, if not worse, with the proprietary OSes.