Open Source Software Business Models at USENIX
Updated [10-Jun-2006]: Added a link at the end to Brian Aker's blog commentary on the panel.
Brian Aker (MySQL), Miguel de Icaza (Novell/Ximian), and Mike Olsen (Oracle/SleepyCat) joined me on a panel on open source software business models at the USENIX Annual Technical Conference in Boston last Thursday (1 June, 2006). At last year's main technical conference, I gave an invited talk (587.6K) on a similar topic. This year, I thought it would be more interesting with people instead of slides.
The entire 90 minute panel was recorded. I've broken it into three ~27MB MP3 files for posting, and provided a key with (very) rough times (hour:mins).
- Download HeadUSENIX.mp3 (27.3MB) covering the first 30 minutes.
- (0:00) The First Act begins with introductory remarks.
- (0:02) Introductions by Brian, Miguel, Mike. Miguel remarks he might not do an open source company "next time". Brian suggests, "Selling software at this point is like putting out a tip jar."
- (0:08) The panel discusses the challenges of growing out the community and growing the company. Mike discusses the early ownership of the asset and dual licensing.
- (0:11) Miguel talks about early days at Ximian, and the discovery that one of the more valuable assets was Red Carpet, which wasn't the focus of the company at all.
- (0:14) Miguel discusses the value of Skype versus JBoss on acquisition and whether that had to do with the fact that JBoss was open source software, and Brian's responds that it may have had more to do with the number of people that could be monetized between a VoIP company versus an app server.
- (0:18) A discussion about community contributions, from the ratios to the value of the contributions, and the nature of the community contributing. How the maturity of a community may effect where and how contributions happen is discussed. Contribution value from Windows users is also discussed (with some amazing references).
- The value of contributions from an intellectual viewpoint is discussed. Mike (referring to MySQL) observes, "They can hire the smartest guys for their product and project. You can shop for brains wherever they happen to be." Brian confirms that MySQL has people in 26 Countries, and, "There is no point in the day where someone isn't awake working on MySQL."
- Download MiddleUSENIX.mp3 (26.3MB) covering the middle 30 minutes.
- The Second Act starts with a discussion about Licensing and how each company thought about licensing, the community it would enable, and the leverage it would provide as a business. Interesting commentary on the inability to dual license Linux at this point, and how valuable the Samba project really is. Some discussion on subscription value in the business.
- (0:40) The patent discussions begin (and we get our first audience question asking about opinions on provisional patents)! What we've collectively seen from a business perspective and an investor perspective is discussed, with little straying into software patents being "right" or "wrong". This IS a business panel after all, and we point out why they're not necessarily a good investment, and how the different companies have used them.
- (0:49) Audience questions finally start in earnest: What were the unexpected things that happened with respect to your business in the community or with open source? Mike discusses surprises about the cost of community engagement, and not pursuing traditional marketing tactics. Miguel discusses early learnings at Ximian. Brian talks about early things he did at MySQL, and comes back to the importance of committed communications with the community.
- Download TailUSENIX.mp3 (28.8MB) covering the final 30 minutes.
- (0:56) The Third Act continues with excellent questions from the audience. Audience question: Are there good ways of working with international clients/customers as a small companies? (The question comes from someone that has not had good experiences.) Mike and Stephe offer up different perspectives.
- (1:03) Audience question: How do you deal with QA to ensure your customers come back, especially when the support and maintenance from a commercial system can be inferior to the community itself? (The question comes from someone that has had bad experience with the Red Hat Network.) Brian answers in terms of the competition that is enabled in an open source environment.
- (1:07) Audience question: The panel is asked to speak to the differences between collaborative organizations around “open source standards” (e.g. The Gnome Foundation) versus more traditional standards organizations. Some discussion ensues about standards and open source in general. (I must apologize. This is a topic near and dear to my heart and I got a little long-winded here.) This discussion was kicked off by Andy Oram (O'Reilly Media) who wrote up an audience view of the panel.
- (1:16) Audience question: How would you maximize your buyout opportunity using open source? This question carried us almost to the end. Each panelist and the moderator came back to passion and conviction and the need to build the company you want, regardless of an acquisition end game. Miguel discussed some of the accounting involved for a large company investing in acquisitions over R&D, and how he thinks about it. Mike discussed the emotional investment in building a company and the ability to execute compared to trying to “build something flip.” Brian talked about different motivators and Adam Bosworth's “6 F's”. Stephe filled in his own experience (with odd references to Canada Day).
- (1:25) A last quick audience question (with minutes to spare): Can you use open source for time to market advantage in building a company? Stephe takes this one with a discussion of the use of open source in the development of Interix at Softway.
I want to publicly thank my panelists. They were an awesome experienced panel. They have all been in the game long enough, and each with remarkable success so as to be able to properly discuss free and open source software in the context of a business and its growth and execution. There are few panelists I would trust to deliver the experience shared here without needing to wrap it in positions and agendas. Each of these gentlemen shared their experiences frankly and brilliantly. Thank you!
Here are Brian Aker's comments on the panel as well.
Picture courtesy of Tom Christianson.