Welcome!

Open Source Cloud Authors: Pat Romanski, Yeshim Deniz, Liz McMillan, Stackify Blog, Wesley Coelho

Related Topics: Open Source Cloud

Open Source Cloud: Article

EOS Editorial — The End of an Era

How software-as-a-service and open source are reducing our licensing costs

The other day I was driving down the highway when I passed an American classic, a 1965 Ford Mustang. As I waxed nostalgic, I realized that there will never be another era in history where we will appreciate automobiles like those produced in the 1950s and 1960s. No matter what their merits, I don't foresee automobile aficionados 50 years from now tooling around in a Toyota Prius, Honda minivan, or any of today's plastic-covered modes of transit.

This realization saddened me to a degree. I spent the years up to my 16th birthday in my father's car dealership admiring these gas-guzzling steel monsters. At the same time I had my first dedicated access to a computer, a 286 model that was used to keep the accounts for our swipe-card gas pumps. It was a time before Microsoft Windows, and computer users were in a minority in comparison to automobile drivers.

Times have changed; the golden era of the automobile has passed. Today I would suspect that there is more parity in those who own an automobile and those who own a computer. Now we are paying for the smog-spewing sins of our past as we look at more efficient economy cars and those powered by hydrogen cell batteries. I think the time is coming for software companies to pay the piper too. They have delivered for too long their own brand of inefficient product at a premium price.

During the past 20 years, I also observed another evolution. While car companies have seen many ups and downs, information technology companies have grown into huge multi-national corporations that have dwarfed the car manufacturers. For example, Microsoft has a market cap of over $310 billion while Ford Motor Company is somewhere between $14 and $15 billion.

Just as the auto manufacturers have seen their best years come and go, I believe that software companies like Microsoft and Oracle are part of an era that has passed. These companies have risen to become industry leaders as the PC desktop and the server has become omnipresent. They have benefited from a model where you build software once and sell it millions of times over. There was nothing wrong with that either as long as the market would bear it. For these to continue their leadership roles, they will have to adapt.

That industry is changing. Consumers of technology are getting smarter, more demanding, and value-conscious. There are too many choices for the software users to be held hostage by one vendor. The new "software" giants like Google offer hosted software and services to millions of users every day, compensated not by users but by advertisers. The reason they have been able to scale is an infrastructure built on open source and customized to their needs. Six years ago I would have asserted that Yahoo! had already won the search engine race, but Google provides evidence that there is still plenty of competition for the number one spot in that industry. Salesforce.com evidences another business model where users don't pay for software but subscriptions for software that they "rent" for a period of time. Their success probably gives the folks at Seibel heartburn. The former has a market cap of $156 billion and the latter almost $5 billion. These are the Microsofts and Oracles of tomorrow and they don't sell software, they sell software-as-as-service.

Next-generation technology companies are decidedly different; many are focusing on industries that have matured. They are leveraging open source software to realize efficiencies that established leaders have not. In some cases, they are innovators but in many cases they are taking the fat out of the software delivery model. For example, it is common for software users to invest upfront in a software package that entitled users to perpetual use and some degree of support. But more and more users are adopting software without an upfront investment other than their time. MySQL users, for example, can download and deploy a database without even contacting the Swedish vendor. Sun users can download Open Solaris, without contacting Sun. When they are ready to buy, they are signing up for updates, support, and value-added services. Since these software vendors haven't had to pay for a BMW-driving, Rolex-wearing sales guy to wine and dine you, you aren't obligated to help them recoup that part of the sales cycle.

The ability to do-it-yourself is well and good but even those who chose to deploy systems on their own realize in a crisis they will want the backing of a corporation that can help them quickly resolve a problem. That's where the open source vendor will add the most value - in the way that they service their software. In this model you aren't tethered to a solution; if they don't deliver, you haven't sunk a huge chunk of your budget into a solution that you must recover. It also puts the onus on the vendor to deliver a level of service that continues to win your business.

I was recently relayed an anecdote by a managed services provider who had bought a costly systems management solutions a few years back. He was upset that after he installed the solution, the vendor was unresponsive. His take was that once they had bought the software, the vendor felt little need to keep winning his business. He was looking to replace the proprietary software with an open source solution, but his primary concern, past the features and functions, was the level of responsiveness and ability for the open source vendor to provide service.

The point is that because of increased pressure by open source providers who focus on service rather than licensing, they increase their value to you; you pay for what you need, their service and expertise. In many cases they won't be able to continue to operate on a model that focuses on licensing without a high level of service or at least the availability of a higher level of service. By creating this pressure your established vendors will likely increase their efforts to provide what you need. This new model probably won't spawn another software superpower because the economics for service-based businesses are quite different but it will allow for many mid-tier value-oriented software vendors who are striving to provide you with not only useful software, but exceptional service. As you look at growth in 2007, I suggest you consider the following things. Do your current vendors delivery a good value? Are they servicing your needs or just licensing your software? Maybe it's time to consider looking for a vendor whose business is service.

More Stories By Mark R. Hinkle

Mark Hinkle is the Senior Director, Open Soure Solutions at Citrix. He also is along-time open source expert and advocate. He is a co-founder of both the Open Source Management Consortium and the Desktop Linux Consortium. He has served as Editor-in-Chief for both LinuxWorld Magazine and Enterprise Open Source Magazine. Hinkle is also the author of the book, "Windows to Linux Business Desktop Migration" (Thomson, 2006). His blog on open source, technology, and new media can be found at http://www.socializedsoftware.com.

Comments (0)

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.


@ThingsExpo Stories
SYS-CON Events announced today that Dasher Technologies will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Dasher Technologies, Inc. ® is a premier IT solution provider that delivers expert technical resources along with trusted account executives to architect and deliver complete IT solutions and services to help our clients execute their goals, plans and objectives. Since 1999, we'v...
SYS-CON Events announced today that MIRAI Inc. will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. MIRAI Inc. are IT consultants from the public sector whose mission is to solve social issues by technology and innovation and to create a meaningful future for people.
SYS-CON Events announced today that TidalScale, a leading provider of systems and services, will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. TidalScale has been involved in shaping the computing landscape. They've designed, developed and deployed some of the most important and successful systems and services in the history of the computing industry - internet, Ethernet, operating s...
SYS-CON Events announced today that TidalScale will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. TidalScale is the leading provider of Software-Defined Servers that bring flexibility to modern data centers by right-sizing servers on the fly to fit any data set or workload. TidalScale’s award-winning inverse hypervisor technology combines multiple commodity servers (including their ass...
Recently, REAN Cloud built a digital concierge for a North Carolina hospital that had observed that most patient call button questions were repetitive. In addition, the paper-based process used to measure patient health metrics was laborious, not in real-time and sometimes error-prone. In their session at 21st Cloud Expo, Sean Finnerty, Executive Director, Practice Lead, Health Care & Life Science at REAN Cloud, and Dr. S.P.T. Krishnan, Principal Architect at REAN Cloud, will discuss how they b...
Amazon is pursuing new markets and disrupting industries at an incredible pace. Almost every industry seems to be in its crosshairs. Companies and industries that once thought they were safe are now worried about being “Amazoned.”. The new watch word should be “Be afraid. Be very afraid.” In his session 21st Cloud Expo, Chris Kocher, a co-founder of Grey Heron, will address questions such as: What new areas is Amazon disrupting? How are they doing this? Where are they likely to go? What are th...
SYS-CON Events announced today that IBM has been named “Diamond Sponsor” of SYS-CON's 21st Cloud Expo, which will take place on October 31 through November 2nd 2017 at the Santa Clara Convention Center in Santa Clara, California.
Infoblox delivers Actionable Network Intelligence to enterprise, government, and service provider customers around the world. They are the industry leader in DNS, DHCP, and IP address management, the category known as DDI. We empower thousands of organizations to control and secure their networks from the core-enabling them to increase efficiency and visibility, improve customer service, and meet compliance requirements.
Join IBM November 1 at 21st Cloud Expo at the Santa Clara Convention Center in Santa Clara, CA, and learn how IBM Watson can bring cognitive services and AI to intelligent, unmanned systems. Cognitive analysis impacts today’s systems with unparalleled ability that were previously available only to manned, back-end operations. Thanks to cloud processing, IBM Watson can bring cognitive services and AI to intelligent, unmanned systems. Imagine a robot vacuum that becomes your personal assistant tha...
SYS-CON Events announced today that IBM has been named “Diamond Sponsor” of SYS-CON's 21st Cloud Expo, which will take place on October 31 through November 2nd 2017 at the Santa Clara Convention Center in Santa Clara, California.
In his Opening Keynote at 21st Cloud Expo, John Considine, General Manager of IBM Cloud Infrastructure, will lead you through the exciting evolution of the cloud. He'll look at this major disruption from the perspective of technology, business models, and what this means for enterprises of all sizes. John Considine is General Manager of Cloud Infrastructure Services at IBM. In that role he is responsible for leading IBM’s public cloud infrastructure including strategy, development, and offering ...
SYS-CON Events announced today that N3N will exhibit at SYS-CON's @ThingsExpo, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. N3N’s solutions increase the effectiveness of operations and control centers, increase the value of IoT investments, and facilitate real-time operational decision making. N3N enables operations teams with a four dimensional digital “big board” that consolidates real-time live video feeds alongside IoT sensor data a...
In a recent survey, Sumo Logic surveyed 1,500 customers who employ cloud services such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP). According to the survey, a quarter of the respondents have already deployed Docker containers and nearly as many (23 percent) are employing the AWS Lambda serverless computing framework. It’s clear: serverless is here to stay. The adoption does come with some needed changes, within both application development and operations. Tha...
SYS-CON Events announced today that Avere Systems, a leading provider of enterprise storage for the hybrid cloud, will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Avere delivers a more modern architectural approach to storage that doesn't require the overprovisioning of storage capacity to achieve performance, overspending on expensive storage media for inactive data or the overbui...
With major technology companies and startups seriously embracing Cloud strategies, now is the perfect time to attend 21st Cloud Expo October 31 - November 2, 2017, at the Santa Clara Convention Center, CA, and June 12-14, 2018, at the Javits Center in New York City, NY, and learn what is going on, contribute to the discussions, and ensure that your enterprise is on the right path to Digital Transformation.
Smart cities have the potential to change our lives at so many levels for citizens: less pollution, reduced parking obstacles, better health, education and more energy savings. Real-time data streaming and the Internet of Things (IoT) possess the power to turn this vision into a reality. However, most organizations today are building their data infrastructure to focus solely on addressing immediate business needs vs. a platform capable of quickly adapting emerging technologies to address future ...
Digital transformation is changing the face of business. The IDC predicts that enterprises will commit to a massive new scale of digital transformation, to stake out leadership positions in the "digital transformation economy." Accordingly, attendees at the upcoming Cloud Expo | @ThingsExpo at the Santa Clara Convention Center in Santa Clara, CA, Oct 31-Nov 2, will find fresh new content in a new track called Enterprise Cloud & Digital Transformation.
Most technology leaders, contemporary and from the hardware era, are reshaping their businesses to do software. They hope to capture value from emerging technologies such as IoT, SDN, and AI. Ultimately, irrespective of the vertical, it is about deriving value from independent software applications participating in an ecosystem as one comprehensive solution. In his session at @ThingsExpo, Kausik Sridhar, founder and CTO of Pulzze Systems, will discuss how given the magnitude of today's applicati...
SYS-CON Events announced today that NetApp has been named “Bronze Sponsor” of SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. NetApp is the data authority for hybrid cloud. NetApp provides a full range of hybrid cloud data services that simplify management of applications and data across cloud and on-premises environments to accelerate digital transformation. Together with their partners, NetApp emp...
As popularity of the smart home is growing and continues to go mainstream, technological factors play a greater role. The IoT protocol houses the interoperability battery consumption, security, and configuration of a smart home device, and it can be difficult for companies to choose the right kind for their product. For both DIY and professionally installed smart homes, developers need to consider each of these elements for their product to be successful in the market and current smart homes.