Slashdot Mirror
Oracle Wants Proof That Open Source Is Profitable
An anonymous reader writes "Since Oracle's acquisition of Sun, all open source projects that now have Oracle as their primary sponsor are worried about their future, and FUD is spreading quickly. Very few public statements have been made by Oracle executives, particularly regarding OpenSolaris. The community is arguing about the difficulties of forking the code base when most (if not all) of the developers are employed by Oracle. Now Oracle wants the community to prove that open source can be made profitable. What arguments can the Slashdot crowd provide to convince Oracle about that?"
Reader greg1104 tips related news about licenses for Solaris. According to an account manager, "Solaris support now comes through a contract on the hardware (Oracle SUN hardware)."
IBM & Red Hat are profitable, right?
There is a war going on for your mind.
Redhat does pretty good for itself, doesn't it?
Open source by itself is not profitable. But services around it surely are.
RedHat, is a Linux corporate support company that was the first and so far as I know the only company that's making money doing that. Although, almost half of RedHat's income is from financial activities. In other words, they're not making all their money from FOSS.
So, there hasn't been a business model based upon FOSS that's really been proven - completely.
Yeah, yeah, yeah, FUD blah blah blah. But just brushing off criticisms as FUD doesn't cut it to the accountants, I'm afraid.
RIP America
July 4, 1776 - September 11, 2001
Ok, so I'm the author of that message that is quoted in the article. And while an employee, I was *not* speaking for Oracle. I didn't use an Oracle e-mail account, or a Sun account for that matter.
I am not authorized to speak for Oracle. So please make sure attributions are correct.
Also, most of the posters here are confused due to lack of sufficient context. I was talking about Open Development (where anyone can integrate changes and participate in design, etc.) -- not Open Source. Open Source is clearly a win for everyone involved, I think. I'm personally less convinced that Open Development is a win for Open Solaris. There are lots of people using it, but almost nobody contributing, and the contributions are expensive to support.
Oh yeah, and in case anyone thinks I don't know what I'm talking about -- have a look at https://www.ohloh.net/p/opensolaris/contributors -- that would be my name at the top of list. And yes, I integrate changes for other people in the community as well, but those numbers are mostly not part of the ohloh statistics.
Based on Sun's financial demise I'm sure that Oracle is already aware that closed source software isn't always profitable either
I remind you that Sun open sourced almost their entire software portfolio.
This is a very hard argument for numerous companies, not just Oracle. If the answer was simple, then Linux on the desktop would be much more prevalent. Instead we see it hidden away in the Server rooms happily consuming Microsoft's market share.
Profit models are always based on software sales with a percentage cap. As an example, a CAD support company will sell you AutoCad. They pay $400 US to Autodesk, and charge the customer $600 US. Sure, many companies offer support, but in the application space it's not easy to make money. How hard is it for a Windows power user to install a Windows application on their own? In reality, it's not difficult so most companies have minimum installation support. They can count on each year receiving a check for the latest version of AutoCad. Even if the company pays for installation service one year, there is no assurance that the customer will pay again for the services.
Some companies have "Managed Service Models", where you don't have to pay the 600 bucks for AutoCad. Instead you lease the seat with support for a fixed rate. This is closer to where you want to go since it covers both guaranteed software sales, and guaranteed support staff payments. Even still, these are pretty limited since most companies can not see much benefit in paying a company a large monthly rate for something one of their power users can handle. You also run into numerous issues where power users convince the people they work for (and rightly so) that it's a waste of money to use the managed service model. This could increase their pay, and add stability to their job (pretty important in this economy).
Where companies like IBM and RedHat make their money from OSS is a much lower level of Managed Services. When you can package the app, package the OS, security, patching, infrastructure to support everything, and have a knowledge base able to reduce down time companies see much more benefit. They can also cater lower cost services to companies with lower budgets. It's cheaper to get a start up moving with RedHat Cluster, Apache and MySql than it is an equivalent Oracle package. IBM and RedHat can not only show you the benefit, but will help you implement it.
This is where Oracle needs a different mind set, which I doubt will happen. Oracle does Oracle. They don't want to support SunOne, MySQL, or Netscape Products. They want customers to pay for Oracle Directory Server, not get SunOne for free. They want customers to pay for Oracle DB, not use MySQL. They want customers to use Oracle Web server, not the SunOne products or other proven free software.
The big bucks revenue that Oracle receives each year from contracts like Oracle Apps, Oracle DB, Oracle Identity Manager, etc.. comes from huge players with tons of cash to spend. Small companies don't have the budgets to pay for Oracle, and Oracle has traditionally had an attitude where they don't want to deal with small budgets. I have seen Oracle Sales reps laugh at customers with small budgets, or just completely blow them off and ignore them.
As long as Oracle has the mind set that they should make a mint off of every deal, there is nothing anyone can do to show them OSS is profitable. Profit to them is a relative term.
-The wise argue that there are few absolutes, the fool argues that there are no probabilities.