Explaining open source strategies used by big corporations like IBM, Oracle, Sun and Microsoft

1. How big corporations play the
open source game
Henrik Ingo
Froscon 2012
Froscon 2012 1

2. Henrik Ingo
open source technology and
strategy specialist
active in MySQL, Drupal
communities
worked in mobile and LAMP with
business management, sales, R&D
current: Senior Performance
Architect at Nokia
author of "Open Life: The Philosophy
henrik.ingo@openlife.cc
of Open Source"
www.openlife.cc
http://openlife.cc/blogs/2012/july/cloudstack-has-
proof-foundations-way-create-foss-community
Froscon 2012 2

3. What we want to learn today
IBM, Oracle, Google, Microsoft...
...are now all involved in open source
Why?
= business justification
How?
= strategy
We are perhaps familiar with Red Hat, Canonical or MySQL
AB business models. But what business do these
companies get out of open source?
Idea is to learn how to "read" these big corporations when
they are active in our communities.
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4. The web companies
Google, Yahoo, Facebook, Twitter...
Startup phase:
Use stuff for free, foss is more agile, etc...
Mature phase:
Web scale would not be possible
with proprietary licensing
Value is not in controlling the software:
commoditization is good
off the shelf is good
This strategy is well understood in the community
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5. Google and big data
Pretty closed compared to peers
Invents Bigtable, MapReduce
...but doesn't tell anyone.
Realizes that being too isolated is counterproductive.
Publishes academic papers so universities can teach the stuff
to a new generation.
Doug Cutting & Yahoo write Hadoop
Same has happened with newer Google data platforms, HW
architecture, etc...
Essentially, by publishing papers about its proprietary tech,
Google invites the world to "catch up". Work is done by others
than Google.
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6. Alliances vs the proprietary market leaders
Market leader Open source as the
proprietary framework for
alliances
Microsoft Linux
Google Hadoop
Amazon OpenStack
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7. IBM (1998)
What does IBM sell? Operating systems 1998:
Servers?
Windows Growth
Operating systems?
SW: Databases, J2EE, Solaris, Digital
Middleware, Tivoli... Unix, HP Unix...
Integration? AIX
Solutions? Mainframes
C-level consulting?
Answer: IBM sells
"everything"
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8. IBM (1998)
Low end operating
systems not controlled
by IBM
Microsoft, Sun, HP,
Digital are competitors
Linux is controlled by
nobody
Famous 1 billion $
investment
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9. It's about control / independence
IBM activity Against who To get access to
Linux Windows, Solaris... Low end servers
Apache Foundation ? httpd server
Apache Harmony Sun Java JVM / JDK
Eclipse Sun Netbeans Developers
Apache Geronimo JBoss OSS J2EE,
Wesphere CE
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10. Oracle vs Sun: Share of wallet
Stack (1990's) New stack (1998 -> )
Sun Solaris Red Hat Linux
(bloody expensive) (cheap, once upon a time)
Oracle Enterprise
Oracle Enterprise (bloody expensive)
(bloody expensive)
Weblogic
Weblogic or Websphere (bloody expensive,
(bloody expensive) owned by Oracle)
Cannibalize complementary products
=> customer has more money to spend on your product
Round 2: Oracle Enterprise Linux vs Red Hat
Round 3: Expand into HW
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11. Sun
The famous "too little too late" strategy
Compare w Netscape 1998 :-)
SCSL in 1998 was not an open source license
SISSL from 2000 to 2005, then LGPL for OpenOffice, GPL for Java
Continues to "invest in innovation" the old school way, while giving away SW for free
under FOSS licenses
Solaris, SPARC, Java, OpenOffice, even MySQL, are all in house developments. Community
participation problematic.
CTO-level comment from Sun's biggest customer:
"We are standardizing on Linux but we still allow Solaris only because you open
sourced it."
+90% of revenues from selling Sparc+Solaris systems. Linux and X86 efforts suffer due to
short term choices.
Lessons learned:
Merely picking an open source license is not a substitute for real community engagement, good
PR nor competent sales strategy
Open Source was a good defensive strategy. Without it, Sun would have died faster.
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12. The Fortress theorem
Most companies have a single
star product, which generates
most of its revenue. All other
products and strategies are
simply additional layers of
defense around this central
revenue generator.
Examples:
Microsoft => Windows+Office
Oracle => Database
Google => Search+ads
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13. Google, Mozilla, Chrome, Android
This explains Google's investment in
some open source projects:
Mozilla:
If everyone uses IE, they will use
Microsoft's search by default.
Microsoft's HTML, etc...
Chrome:
Since we are paying 300MUSD/yr
to Mozilla, it makes sense to
invest in your own browser
instead.
Android:
If everyone uses iPhone, [you get
the point...]
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14. Microsoft
2001: Shared Source,
"Cancer"
2007: MS-RL and MS-PL
Perens et al: "It's a trick,
don't do it!"
License proliferation
Contributes to Linux in
2009. Top 10 Linux
contributor in 2011.
Contributes to Samba
2011
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15. Actual MSFT internal slide. 2003
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http://stephesblog.blogs.com/my_weblog/2009/09/open-source-business-tactics-in-one-slide.html

16. Microsoft: Outercurve foundation
Codeplex. Microsoft's Sourceforge. 2006
Froscon 2012http://web.archive.org/web/20060525054710/http://codeplex.com/
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17. Microsoft: Outercurve foundation
2008: 2009
"Ramji sat down with Gates, chief software Outercurve Foundation
architect Ray Ozzie, and a few others to
discuss whether Microsoft could actually start License and tech agnostic
using open source software. Ramji and Ozzie Legal Proxy
were on one side of the argument, insisting
that Microsoft embrace open source, and - IBM and Apache,
Gutierrez offered a legal framework that IBM and Suse, Red Hat
could make that possible. But other top - Google with OHA
executives strongly challenged the idea.
2012
Then Bill Gates stood up.
Wholly owned subsidiary
He walked to the whiteboard and drew a
diagram of how the system could work, from Legal proxy towards FRAND
copyrights to code contribution to patents, obligations in standard bodies
and he said — in no uncertain terms — that
the company had to make the move."
Qualcomm following
http://www.wired.com/wiredenterprise/2012/01/meet-bill-gates/
http://news.cnet.com/8301-10805_3-57413395-75/microsoft-
folds-interoperability-team-into-open-source-subsidiary/
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18. What have we learned?
Web companies use FOSS for the low licensing and
R&D cost
FOSS provides a framework for alliances to attack
proprietary market leader (Amazon, Microsoft, Google)
FOSS products are promoted so that proprietary
competitor/partner won't control key component of your
stack (IBM, Google)
Oracle: Share of Wallet
Google: Protect the fortress
Foundations shield companies from legal liability
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19. What does it mean for FOSS?
Big corporations use FOSS as a weapon to beat
each other in the head. (Or defensively as a
helmet...)
The good news: FOSS prospers regardless of their
motives:
When Oracle contributes to Linux, to attack Sun or Red
Hat, Linux wins
When Sun buys MySQL to attack Oracle, MySQL wins
When Microsoft supports CentOS to attack Red Hat,
Linux Wins
FOSS is designed to prosper from engagement!
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20. Sources
Skyscraper: CC BY http://www.flickr.com/photos/rene-germany/28095903/
Sun:
SCSL http://en.wikipedia.org/wiki/Sun_Community_Source_License
SISSL http://weblogic.sys-con.com/node/128267
Fortress:
http://en.wikipedia.org/wiki/File:Fortbourtange.jpg
Microsoft:
Shared Source: http://en.wikipedia.org/wiki/Shared_source
Black Duck Top 20 licenses: http://www.blackducksoftware.com/osrc/data/licenses/
Stephen Walli internal slide:
http://stephesblog.blogs.com/my_weblog/2009/09/open-source-business-tactics-in-one-slide.html
Codeplex 2006: http://web.archive.org/web/20060525054710/http://codeplex.com/
Contributions to Linux: http://www.wired.com/wiredenterprise/2012/04/microsoft-and-linux/
Contributions to Samba:
http://www.wired.com/wiredenterprise/2011/11/how-microsoft-learned-to-stop-worrying-and-almost-love-open-source/all/1
Bill Gates and Outercurve: http://www.wired.com/wiredenterprise/2012/01/meet-bill-gates/
Microsoft Subsidiary:
http://news.cnet.com/8301-10805_3-57413395-75/microsoft-folds-interoperability-team-into-open-source-subsidiary/
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