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Could Open Source Investment Save HP?
deadeyefred writes "HP's new CEO, Meg Whitman, has a number of issues to deal with to right the ship and put the company on a growth track again. Instead of massive changes to its organization and product line, could $4.5 billion in open source investments do the trick? An argument might be made that HP could boost its competitiveness by putting half of its R&D budget ($1.5 billion a year) into projects like Xen.org, Android and OpenStack. It would still be less than half what HP is paying for Autonomy and allow it to focus on solving problems rather than protecting proprietary product lines and fiefdoms."
Man, what a dream that would be! A company that focuses on solving problems for customers, and doesn't try to own every little crappy angle to squeeze their customers!
Seriously, imagine if HP took *every* possible open source option in building a PC, and opened as much of the system as possible to allow crowd sourcing of solutions to the problems that always pop up in systems! Now with Windows, that would still be pretty limited. But hey! This would be a company I could buy from!
The HP board of directors would never stand for the short term instability that such a dramatic move would generate. They're too focused on the immediate share value to even begin to think about the long-term health of the company.
Red Hat - Yes...
IBM - Yes...
It's all in how you go about it all.
However...
Sun screwed up and didn't "get it" quick enough to turn it around for themselves. Starting late on the game and/or not having a handle on it costs dearly.
Palm? OpenSource? I don't see a fully FOSS WebOS. I don't see a fully FOSS PalmOS either.
Netscape? They FOSSed things as they were DYING.
Your examples aren't.
I am not merely a "consumer" or a "taxpayer". I am a Citizen of the State of Texas
I'm afraid you'll have to wait the obligatory week for your chance. The HP board is trying as hard as it can to match the CEO replacement cycle with the Mozilla release cycle, so give them a chance.
The world's burning. Moped Jesus spotted on I50. Details at 11.
Sun's problem wasn't because they contributed to Open Source. The problem with Sun was that they couldn't be bothered with making money.
Oracle made their operations profitable within a year without any significant changes to their open source projects. Or in other words, had they chosen to support all the same open source efforts, the changes in marketing and management Oracle introduced still made sun profitable.
IBM contributes heavily to open source, and in fact might be the biggest contributor to open source, and they are quite profitable.
Google contributes heavily to open source, and they are quite profitable.
Companies that contribute to Open Source just cannot make that their *entire* business plan.
IMHO. It's been HP that has lead the way for corporations to outsource services to India, and manufacturing to China. Hell, at Fry's,(Fountain Valley), I was told HP hardware was being phased out. I use to like HP hardware, now the new stuff will become as tainted as the refugee from Goldman Sacks. If her job isn't to bring jobs back into the U.S., and manufacturing back to the U.S., then the only thing she has experience in is Mergers, and Acquisitions. I'll go out on a limb here and say, "SELL ! SELL ! SELL ! SELL !", because I wouldn't trust her engineering knowledge to properly plug in an extension cord for her portable hair dryer.
Your argument is like "Apple succeeds because of their Excellent Hardware, not due to their excellent advertising."
Seriously, Oracle didn't save enough money by cutting projects, nor made enough money by diverting users from open source to proprietary extensions to make Sun profitable. The fact is that Larry is pretty good at walking up to a company/government/organization and saying, "Say, why don't you buy my hardware? Oh, and here is your service contract!"
I will tell you how dumb Sun was.... Sun actively diverted service contracts to SUN HARDWARE to IBM!! Now cutting THAT off on day one went along way for Oracle making Sun profitable. Making Sun profitable had little to do with cutting Sun's support for Open Source. (Of course I am not claiming it hurt either; however long term if Oracle fails to continue to support Java and MySQL and other significant projects, it could come back to haunt them!)
IBM and Google have to make money. Open source both price cuts competition, makes friendly with customers, and provides them with a better product that they can make money on (hardware, advertising, whatever).
There IS a significant place for open source in a company's business plan.
did FOSS really save IBM? I was under the impression that what saved IBM was reinventing themselves as a "soloutions" company. They may use a bit of FOSS in their solutions and contribute a bit to the projects they use but I never got the impression it was critical to them.
As for HP the real question IMO is would they be able to monetize their contributions. Contributing to FOSS buys you experience with the software (useful for consultancy) and mindshare with the projects leaders (useful if you are trying to build a solution on top of the software and want it steering in your direction) but ultimately to make money you need a product or service to sell, preferably one that is hard to duplicate.
note: i'm known as plugwash most places but i screwd up registering that here somehow in the past and now can't register
IBM contributes heavily to open source, and in fact might be the biggest contributor to open source, and they are quite profitable.
Due to their proprietary hardware and software that they sell. Not due to open source.
Actually, that's not true. In 2010, IBM earned $58.7 billion from its business services, technology services, and finance divisions, compared to $40.5 billion for its software and systems and technology divisions. So most of IBM's money comes from consulting and services, in which might involve proprietary products as well as open source software. IBM's policy is to offer its customers solutions that are the best fit for their needs and budgets -- that is, they'll bleed you as much as they can, but if it makes the most sense to use open source software, they'll use that.
Also, even some of IBM's proprietary software is open source. Let me repeat that: Even some of the software that you describe as "proprietary" also comprises open source elements. Not every open source license forbids commercial use. For example, IBM's WebSphere Application Server bundles a modified version of the Apache HTTP server (unless you want to use something else). In reverse, IBM has donated a number of products to the Apache Foundation, and these are usually mature packages that IBM was already deploying for real-world projects (e.g. CloudScape, aka Derby) and continues to use today -- now IBM just gains the benefits of community development. To the extent that Java is also open source, IBM is obviously heavily involved in the Java Specification Process (even if it has its own, proprietary Java products).
So you really can't claim IBM isn't a good open source citizen, and you can't claim IBM isn't profiting from its decision to embrace open source,either (where appropriate). Consider this: In 2010, IBM earned $22.5 billion from its software business. You know what it's gross profit margin from that business was? 86.9 percent. That's right, 86.9 percent. Think open source had nothing to do with that?
The open source part is just leveraged to sell more proprietary hardware and software.
Correction: The open source part is just leveraged -- or, if we can drop the bullshit MBA jargon, it's used to make money. What's wrong with that? I thought that was the whole topic of the thread.
Breakfast served all day!
I am not sure this is a useful guide to what HP would do. After all, some of Apple's software is also open source; witness the Apache Server bundled with all the stuff on my Mac laptop. You quote numbers which look authoritative, but we don't know how much of consulting and services is attributable to open source and how much is attributable to proprietary, so they don't really make the case for open source.
It's worth noting that Sun under Schwartz had a plan for open source software, it just did not succeed. As related at the time, the goal was to use open source as a lever into Brazil/Russia/India/China and other places, and then sell other stuff. The goal was that almost all software would be open sourced, under the theory that most of Sun's paying customers (not to be confusing with non-paying non-customers) really didn't have a choice to just download their stuff from the net and service it themselves, either because of expertise issues, or regulatory issues, or quirky-customization issues. That is, Schwartz was pretty explicitly buying into the notion that non-paying software users need not represent lost sales, because the bulk of those users would not pay for it under any circumstances (unlike, say, the RIAA, MPAA, or BSA). They were serious about this; they flew a mess of people out to Santa Clara in late 2007 for a several-day open source summit, and I have 60 pages of notes that I took there.
Obviously the plan didn't work, but it was a plan, and it had connectable dots. My thinking is anyone proposing open source to save HP's business, had better be able to outline a plan that is better than Schwartz's outline to us.
I'd like to see the HP train stop wrecking. I have some friends who work there. There's lovely schadenfreude in seeing overpaid board members making stupid mistakes, till you notice that it's not their jobs that are on the line.
Sun's plan worked brilliantly. They dominated workstation markets pretty much everywhere, and their open source policy was central to that. The main reason for Sun's early success (remember how they killed Apollo?) was they just ran the same software that all the universities were using. I remember how my own code just ran on the things... it was awesome. Their open-source policy, which was long before the phrase "open source" was coined, enabled them to trash the competition. Then they got big, and as the number one company in their space, they got cold feet about open source. IMO, the single biggest mistake Sun ever made was to take Berkeley Unix private, and relabel it Sun-OS (and later, Solaris). It was unbelievably super-dumb. Had they kept it open, there never would have been any compelling reason for Linux, much less BSD. My guess is that they realized their mistake, and tried to the end to make up for it by becoming radical supporters of open source. It was too little, too late. However, it wasn't that their open source strategy failed. It was their choice of back-stabbing the community that killed them. Well, that and Moore's Law, and the lack of an evil marketing genius like Jobs.
Anyway, Meg isn't the marketing genius HP needs. She pretty much is a nail in the coffin.
Celebrate failure, and then learn from it - Nolan Bushnell
Your history's a little buggy. Sun switched OSes in the early 90s from Berkeley-based SunOS to AT&T-based Solaris (I was there at the time). Marketing helpfully muddied the waters by renaming SunOS "Solaris 1.0" and the new stuff "Solaris". This was pretty much a done deal by the end of 1994 (Solaris 2.3 shipped in late 1993; I recall there was still grumbling and resistance to the switch). After that came the dot-com boom.
I do agree that in the early years there was a lot of "open" stuff at Sun, including their processor architecture, but there was a big long spell during which they were only kinda-sorta-open yet wildly successful. Schwartz's re-Opening was probably timed too late, but I would not call it too little; again, I was there. I don't have it in my notes, but I recall that it was Our Fearless Ponytailed Leader himself who proposed that every single Sun software product should be open-sourced, unless there was a really compelling reason otherwise (and at least some of the perception was directed at getting the internal opposition to live with the idea that sometimes, "shit happens", e,g., compiler source might leak some details of a future processor). The lateness was the big issue, and I think everyone knew they were late (if this was going to be the strategy), hence the size of the push.
But if lateness was the problem for Sun in 2007, how would HP not be even more stupidly late with an open source strategy begin 4 years later?