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Why Open Always Trumps Closed?

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Why Open Always Trumps Closed?

  1. 1. WHY OPEN ALWAYS TRUMPS CLOSED? Janne Kalliola Exove
  2. 2. About Myself §  CEO of Exove §  Chairman of Finnish DrupalAssociation §  Board Member of Estonian DrupalAssociation §  I've been working with open source from '90s §  Currently rooting for Node.js, WordPress, and Drupal
  3. 3. About Exove Exove is a leading digital services design and development company focusing on open technologies. We help companies to grow their digital business. Quick facts: §  Founded 2006 §  Over 70 people §  Served more than 190 clients §  Offices in Finland, Estonia, and the UK §  AAAcredit rating §  CEO Janne Kalliola
  4. 4. …And We Are Hiring! §  Join us to experience the open source goodness I'm about to talk with you §  Numerous technical positions open, for example, Node.js dev, Drupal dev, WordPress dev §  Go to exove.com/careers Follow us on Twitter @exove
  5. 5. AND NOW TO THE TOPIC!
  6. 6. Back in 1999 Sun Microsystems CEO Scott McNealy said "Linux is like Windows: it's too fat for the client, for the appliance ... it's not scalable for the server ... Now why in the world would anybody ever write another cheque to Microsoft? I don't know. But why would you do Linux either? That's the wrong answer." 1) 1) http://readwrite.com/2014/07/01/linux-world-domination-complete-why-its-foolish-to-bet- against-open-source-communities
  7. 7. 2) http://fortboise.org/top100-history.html In 1999 §  Back then UNIX powered around 50% of world's supercomputer market 1) §  Five of ten the most powerful supercomputers ran UNIX 1) §  SUN Microsystems was 69th biggest company in the USA §  Value $54B2)
  8. 8. How About Now? §  UNIX powers 2% of top 500 supercomputers, and Windows 1% 1) §  The rest – 97% – is powered by Linux 1) §  SUN was bought by Oracle with $5.6B in 2009 3) 3) http://en.wikipedia.org/wiki/Sun_acquisition_by_Oracle
  9. 9. What Happened? §  Both Scott McNealy and SUN Microsystems were surprised by the power of the community §  SUN had an exceptional history of engineering innovations, but it was still a single company §  That needed to pay salaries to its employees §  And thus was constrained by the amount of the staff it could hire
  10. 10. Why Linux Succeeded? §  Linux was the first viable open source operating system §  Had enough features and applications to be adopted §  Linux overpassed its competition – commercial UNIX systems, Windows NT, etc. – in speed of innovation §  Linux gained numerous corporate sponsors that donated developers to work on the project
  11. 11. Community Does Matter §  Community makes it cool to adopt an open- source project §  Community makes it safe to adopt an open- source project §  Community creates a larger total addressable market §  Community makes it hard for rivals to compete
  12. 12. Perspective Through Numbers §  Surveys have found that developers expend on average 11 hours a week on open source efforts (a median of 7 hours), more than 25% of a standard work week4) §  This is 0.29 FTE (full time equivalent) §  Thus 3.4 part time open source developers lumped together work as much as one full time paid developer 4) http://www.health-policy-systems.com/content/9/1/36
  13. 13. Perspective Through Numbers §  Drupal Community has over 1.167M users and over 37,000 developers5) §  The estimate of full time equivalent of Drupal community development is thus 37,000 x 0.29 = 10 370 5) http://en.wikipedia.org/wiki/Drupal
  14. 14. 10 370 full time developers!
  15. 15. Show me a company that can invest over 10,000 people to develop a complex server side platform.
  16. 16. Or a company that has more than million registered users.
  17. 17. SUN Microsystems were not one of them. (Ifsuchcompaniesdoevenexist)
  18. 18. However, Every Community Is Not a Winning One §  The median length of project participation is 1.2 years4) §  80% of open source software projects fade away due to insufficient long-term participation 4) So choose wisely!
  19. 19. Define a Winning Community? §  Winning or sustained communities typically are very active §  Lots of developers and other people in various roles §  People working actively to keep the community together §  Clear vision and people pushing it forward §  No major arguments inside the community §  Conferences, books or other tangible items related to the project or the community
  20. 20. WHY OPEN SOURCE WORKS?
  21. 21. Participation, Participation §  Open source projects are driven forward with participation §  People donate their time to commit new code to the project §  New feature §  Bug fix §  The commits move the project from release to release Participation > Commits > Progress
  22. 22. Why to Participate? §  Being in a community is an act of working together for a shared goal §  The community must attract people that collaborate §  The project leader has a significant role in attracting highly skilled people §  Demand is high, supply is scarce §  People have different motivations for participating in the community
  23. 23. Motivational Factors6) Economic Developer earns money from contributions Fun Developer enjoys contributing Identity Developer identifies himself as an open source programmer and maintains that identity Learning Developer wants to learn more Networking Developer gains a peer network Own use Developer uses the software himself Political Developer thinks that all software should be free Signaling Developer wants to show his skills. 6) Årdal et al. Health Research Policy and Systems 2011
  24. 24. YOU LOVE 
 IT YOU ARE PAID FOR IT YOU 
 ARE 
 GREAT 
 AT IT THE 
 WORLD 
 NEEDS 
 IT @Frank_Giustra
  25. 25. YOU LOVE 
 IT YOU ARE PAID FOR IT YOU 
 ARE 
 GREAT 
 AT IT THE 
 WORLD 
 NEEDS 
 IT @Frank_Giustra Purpose.
  26. 26. Motivations Over Time §  Motives change during time §  People that learn through participation or identify themselves with the community continue much more likely in the community §  People needing the software for their own use typically leave when their needs are met
  27. 27. Companies as Desired Partners §  Companies have more long-term goals than individuals §  They also offer more considerable and stable resources §  Companies are also interested in non-development activities, such as testing and documentation §  Companies are motivated by economics §  They complement their portfolio with open source §  They use the system for their own use
  28. 28. How to Participate as a Company? §  Allow your vendors to commit fixes and new features on the open source systems you are using §  Participate in conferences §  Sponsor feature requests §  Donate developer time, full-time or part-time §  Donate money or become a sponsor
  29. 29. CASES
  30. 30. Apache Project §  Numerous systems and libraries, such as §  Apache web server §  Hadoop §  Lucene + SOLR §  Subversion §  Tomcat §  Licensed underApache 2 license that maximises the freedom of the users / developers §  www.apache.org
  31. 31. Results §  All web servers are nowadays free §  People used to pay for Netscape web servers etc. §  Tomcat & JBoss – not anApache project, though – caused licensing of J2EE containers to cease §  There are no commercial search engine servers sold §  SAAS search model is thriving, however
  32. 32. WordPress §  The world's most used content management and blogging system §  Has extensive commercial ecosystem powered by individual developers and small companies worldwide §  Project managed byAutomattic Inc. §  Licensed under GPL2 that maximises the freedom of the code §  www.wordpress.org
  33. 33. Results §  Web publishing used to be limited to people having a) money or b) technical skills §  WordPress has democratized publishing and created blogging business §  There used to be commercial blogging platforms that have mostly disappeared
  34. 34. Drupal §  The world's third biggest content management system and application development platform §  Has probably the biggest open source community (and a very fierce one, too) §  Project managed by DrupalAssociation §  Licensed under GPL2 that maximises the freedom of the code §  www.drupal.org
  35. 35. Results §  Drupal (and other high-end open CM systems) have pushed commercial CM systems into niches §  There are exceptions, for example, EPiServer is doing quite strongly – for now §  Drupal has made inroads to enterprise content management
  36. 36. Node.js §  Blazing fast JavaScript based server system built on top of Google V8 JavaScript engine §  V8 is also open source, licensed under BSD license §  Has sprung a lot of libraries and a lot of participation in a short time – albeit a lot of things are still in early phases §  Project managed by Joyent §  Recently forked to io.js §  Licensed under MITthat maximises the freedom of the users / developers §  www.nodejs.org
  37. 37. Results §  Node.js is moving high-end server development from Java and PHP to JavaScript §  It is eating market share from other open source systems – as the commercial options were made obsolete by the previous generation of open source
  38. 38. Other Interesting Ones §  Android §  The most prevalent mobile phone operating system §  MySQL, MariaDB §  The de facto standard for databases nowadays §  MongoDB §  The most thriving NoSQLdatabase §  Also all other relevant NoSQLDBs are based on open source §  Eclipse
  39. 39. HOW TO SUCCEED WITH OPEN SOURCE?
  40. 40. Don't Fight, Adopt §  There is no point fighting against open source §  Except in exceptional cases, a company cannot win a battle against open source §  Open source is like a slow tsunami – you better surf on it than drown in it You need to have a viable strategy to work with open source
  41. 41. Questions for Your Open Source Strategy §  Do you get benefits by switching to open source? §  Would it make sense to embed open source inside your services or products? §  Can you add value on top of an open source product? §  Is your market being consumed by open source products?
  42. 42. It's Tough, Though §  The market has not yet found an excellent open source monetisation mechanism §  Open source based business models yield less value than closed source ones §  Red Hat's market cap is around $13.56B (Apr 20, 2015) §  Compare to Oracle $187.78B, Microsoft $341.40B, SAP $85.73B §  Red Hat's yearly revenue is less than half of quarterly revenues of the aforementioned companies §  On the other hand, very profitable businesses – such as Google orApple – base part of their technology stack on open source components
  43. 43. It's Easier for Customers §  Compared to vendors, customers have a less rocky road §  Open source brings down the total cost of ownership and eliminates vendor locks §  On the other hand, you are fully responsible for the solution you own – it is very hard to get someone contractually liable for open source systems
  44. 44. Open Source Benefits §  Security – no hidden stuff §  Quality – way more people looking at the code §  Freedom – little bindings for you, if any §  Flexibility and customisability – have it your way §  Cost – no license and support fees §  Try before you buy – no monetary costs to try something before taking it into use
  45. 45. WRAP-UP
  46. 46. Wrap-Up §  You cannot fight against open source communities §  It is better to join them and reap the benefits §  When planning open source based business models, scaling is harder §  As a customer / buyer, open technology provides numerous benefits
  47. 47. QUESTIONS? COMMENTS? Nailed it? Follow us on Twitter @exove

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