Lampitt or Leave It

A Head in the Clouds: How to Make Money in the Cloud, Serving Enterprises

zAgile exhibited at the SDForum called "Shaping the New Age of Application Development," in Santa Clara, CA this past Friday and Saturday.

A couple of cloud thought leaders provided keynotes each day:
- James Staten, Forrester
- David Chappell, David Chappell & Associates

Unfortunately I missed James Staten's presentation, but I heard rave reviews,and I enjoyed looking over his slides. I did attend David Chappell's presentation and found his presentation to be quite an  interesting way to view the various options for cloud computing today.

I tweeted some of my thoughts, and they crystalized more over the next couple days.

With all the talk of cloud, I felt a bit frustrated. On the one hand, it seems that everyone agrees that for ISVs, using the cloud is a slam dunk because their hardware requirements can scale up and down at will.  But apparently it's not obvious yet on how the cloud is going to make money while serving the enterprise. It seems that everyone weighed the benefits of PaaS vs IaaS, what kind of computing do you require, how big do you need to scale, etc.

I am not saying I have it figured out, but here are my thoughts... and I wonder if it's a lot simpler than all that.

My basic feeling is that to understand where the enterprise (ie, “the money”) will use the cloud, it is first important to recognize the strengths of the cloud and how it can save money for enterprises. Simply put, the cloud is great for “instantaneous” and “elastic demands” of customers. “Scaling” is the wrong word here in my view as I pointed out in one of the break-out sessions because if infers “scale-up” while diminishing the importance of “scale down” instantaneously.  (Someone tweeted nicely that Sun brought us scaling, and Amazon brought us elasticity). These elastic and instantaneous services are valuable in this context and could be charged at a premium in terms of a per minute or hour basis but might be more expensive over the course of a year. No matter, I will pay a premium if I am only paying for a few weeks for something critical and urgent.

Therefore, I propose to break the enterprise application types into 3 types:
a)    Permanent: traditional, mission-critical applications
b)    Temporary: sandbox applications, prototypes, temporary projects, a holiday campaign, etc.
c)    Unpredictable: we are launching this new app and have no idea where we will attract 100 or 10,000 users and over what course of time.

I propose that the Cloud vendors have the immediate opportunity in b) and c), and this is where  a proving ground is offered to the enterprise. Then, over time, they will feel comfortable with the benefits of the cloud, as well as the cost analysis saving for taking on “a)” eventually. I feel like people are trying to figure out a), because that’s how enterprises traditionally think – because the flexibility that the cloud offers has never been an option until now.

Finally, while I can agree that all cloud vendors may jump on the “reservation” pricing bandwagon because “the other guys are doing it,”  I do not believe that customers will buy-into it in a big way until b) and c) are proven out with the early majority of enterprises.

Presenting to Hundreds, Beers with Tim Berners-Lee, You Know, the Usual

Last night was a good night for zAgile on both coasts of the States.

I presented, along with other vendors, to the PAWS (Palo Alto Semantic Web) group as part of its first semantic web demo session, held at Microsoft's Mountain View offices. Standing room 100-200 folks, nice turn-out and great reactions. Mark Johnson of Powerset semantic search acquired by Microsoft) blogged good notes.  Many thanks to PAWS organizer Peter Berger,

Kayla and Devon at SHIFT, Katie from Powerset, assistant organizer Shamod, and Microsoft!  This was a speed demo of 10 minutes per vendor, and you can see my overview slides here.  I handled the demo straight from the regular zAgilie hosted sandbox that anyone may use to take Wikidsmart for a test spin.

(Slides from the longer version of the zAgilie presentation from the San Francisco Meet-Up last week
are here, and the video is to be posted on YouTube / zAgile.com within some days. )

Also last night, zAgilie CEO Sanjiva Nath presented to about 30 people at the Boston / Cambridge Semantic Web Meet-Up. Many thanks to Kingsley Idehen and Marco Neumann for the invite and management of the meet-up. In attendance was none other than Sir Tim Berners-Lee himself! And many folks went out for beers afterwards at a nearby watering hole.

Indeed, a night to remember...

zAgile Kicks off Roadshow by Hosting Semantic Web Meet-Up at Atlassian in San Francisco

Last night, we had a great turnout for the Semantic Web Meet-Up in San Francisco at the Atlassian offices in San Francisco. (The San Francisco meet-up is now the fastest growing semantic web meet-up group in the State; thanks to Marco Neumann, founder of the original 700+ strong group in NYC for driving the success of the groups across the country!) zAgile brought in Sorrano's pizza (highly recommended), and it was a crowd pleaser. Many thanks to Atlassian for agreeing to host at their location and particularly Trisha Hong for her great organization and work on logistics.

Sanjiva Nath , zAgile founder and CEO, delivered a presentation on the promises and tangible benefits of the semantic web. Importantly, he described that a "semantic approach" does not necessarily mean that semantic web technologies are being used. He described how you can practically apply semantic-web driven solutions today in your organization. Sanjiva presented some examples with Wikidsmart for Confluence, which turns the Confluence enterprise wiki into a semantic wiki allowing the ability to capture information in a consistent way, automate content and links generation, and find precise information quite quickly.

In addition you can "plug in" any other tools and applications with Connectors to the underlying zAgile infrastructure, called zCALM, and have a coherent semantic search across all applications and tools as well as deep interoperability amongst all applications.

We look forward to the upcoming Semantic Web meet-ups during the April zAgile USA Roadshow including an astounding 160+ signed up for the PAWS meet-up in Palo Alto on Tuesday. We look forward to seeing you there, and after the USA roadtrip is complete, we want to organize the same for Europe. Drop us a line at info at zagile point com to learn more.

zAgile Wikidsmart - Coming to a City Near You

zAgile is hitting the road and will be at the following 8 cities in the USA during April. Folks elsewhere, please email info at zagile point com if you would like a zAgile event to be held in your city.

Many thanks to Marco Neumann and the Semantic Web organizers in each city below for their help and organization with the events. Attendees will learn about the benefits of the semantic web and how to practically apply the semantic web benefits to their organization today.

April 9,   San Francisco 
April 13, Los Angeles   
April 14, Palo Alto, CA 
April 14, Boston       
April 16, Washington, DC 
April 20, Austin          
April 22, Chicago        
April 23, New York   

Open-Core Licensing: Variants Include VC and CC

I was a panelist on the open core business model panel today at OSBC. Open core seems to be a hotly debated topic in the blogosphere today, mostly I think because some folks fear being "left out" or FUD around the core product's value, when it's not about that at all. The open core model is about a particular business model that an increasing number of commercial open source vendors have chosen for its ability to both scale a business while serving communities. There are other successful commercial open source business models too, but it depends upon goals for the customers, community, and vendors to select the "right one” for their needs.

When it comes down to it, it's all about value. If the open source core adds value to the community, the project will thrive. If the commercial license adds valuable features, the vendor will thrive as well.

The moderator of the session was Dave Rosenberg, COO and GM of the Americas of RiverMuse and fellow panelists were Aaron Fulkerson, CEO of MindTouch, and Ed Boyajian, CEO of EnterpriseDB.

It was fun to participate, and I am grateful to the OSBC conference organizers for the opportunity to join the debate.

There was an interesting point raised about the copyright ownership of the core code and its implications. In my original post last year, I defined open-core licensing as when the vendor owns the core copyright codes and offers a dual license, where the commercial license has additional premium features. However, that definition excludes vendors who do not own the open source core product; yet "open core" seems to be descriptive of that business model still. In anticipation of the topic, I Tweeted a proposed modification before the panel discussion, which would modify the definition to include two variants:

1) Vendor Controls (VC) core's copyrights
2) Community Controls (CC) core's copyrights. Of course the vendor is part of community but does not have enough copyright control to dictate license. However, as a vendor backs the project, they are likely to be able to dictate some large direction of the product's roadmap.

I would like to explore the benefits and challenges of both variants a bit more, from communities', customers', and vendors' perspectives:

1) Vendor Controls (VC) core's copyrights
There are a number of benefits and potential challenges:

a) Benefits to the community:
- A commercial entity ensures value in the core open source product, with paid staff to provide support and new features

b) Challenges to the community:
- Is there a challenge in participation to the degree you wish? My feeling is this is really a FUD point. Any community will be pleased to have a productive contributor.

c) Benefits to the customer:
- customers know the core uses an OSI-approved license (probably GPL or AGPL), and they have an option to purchase a commercial license to release themselves from the GPL obligations
- core roadmap has a commercial entity methodically financing and driving a roadmap -- and innovation -- of both the core and commercial features
- customer has "one throat to choke" around both the core and commercial features

d) Challenges to the customer:
- the customer needs to understand the vendor's strategy for how features are determined to be included in the open source core and which features are reserved for the commercial product. The customer should ask the vendor to post the policy publicly to be clear if the vendor has not done so already.

e) Benefits to the open core vendor:
- vendor can offer a commercial license to ISV customers who wish to embed the product without GPL restrictions
- vendor can choose to change the open source license (eg, GPL 2 to GPL 3) or offer a commercial license
- Lower indemnification risk of vendor due to knowledge of core code
- Enforce violation of copyright of core

f) Challenges for the open core vendor:
- see 1b above. What is the best way, in terms of features, to simultaneously serve the community and drive revenue. This requires keeping a good pulse on the community's wishes and requirements. Probably if put to a vote, the community will always request more features in the open source core. But as mentioned above, it's all about value for both the open source core and the commercial features. If there is solid value in the open source core, and the community continues to download and participate, there may not be a huge requirement to move additional features into the open core. Whatever the policy, the vendor should be clear about it.

2) Community Controls (CC) core's copyrights

There are a number of benefits and challenges:

a) Benefits to the community:
- A community, whether reality or not, feels that it is free of commercial, emphatic control

b) Challenges to the community:
- Does the community have enough support? If there is a commercial entity backing it, chances are yes. But does this put point 2a into question?

c) Benefits to the customer:
- if permissive license, no commercial license required to embed core in your ISV product
- core's roadmap MIGHT NOT be dictated by vendor or single person (may be bad too)

d) Challenges for the customer:
- if GPL, probably no easy way to get out of GPL requirements when embedding
- maybe no throat to choke or difficult to find or influence someone on core's roadmap

e) Benefits to the open core vendor:
- Probably there is a large community contributing to the core which lessens the R&D cost burden on the vendor.

f) Challenges for the open core vendor:
- vendor cannot change the core license, e.g. GPL to AGPL or commercial
- vendor is financing a core for which it likely does not retain control

All in all, it's about value, and both of the variants of the open core licensing model provide both to customers and communities alike.

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****Special thanks to Matt Dahlman and Sherman Wood for their edits and input to this post.

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Check out my other posts on Open-Core Licensing:

• Open Core Licensing defined (AUG08)
• New and Improved Open Core, with AGPL (FEB08)
• Open Core: the New Standard in Commercial Models (MAR08)

Open Source zAgile Wikidsmart Goes GA - Testdrive It Online or Meet-Up With zAgile

It was great coverage from SD Times a couple weeks ago on how zAgile enables ALM 2.0, and now we just put out a press release on Wikidsmart.  Seems like word is getting out. With Wikidsmart, the ability to pull information from across an organization's tools and applications goes well beyond the confines of the engineering team. Now you can bridge the information gap between engineering, product management, sales, and marketing.

zAgile Wikidsmart just went GA last night, and it's available on SourceForge. I recommend going here for the download instructions. But before you download, you might want to learn more at the Wikidsmart overview page, see some videos of it in action (application interoperabilty or smart search - on the lower right), or even test-drive a hosted version on our sandbox.

When you add Connectors for tools and applications to Wikidsmart, your Confluence wiki will even become an enterprise information dashboard, allowing you to expose any information - and infer informtion - across your tools and applications.

If you would like to learn more in person, we have several events coming up in the Bay Area:
- March 19: Co-Sponsoring the Atlassian User Group in San Jose this Thursday
- March 25: I will be on a panel at OSBC
- April 9: Semantic Web Meet-Up at Atlassian offices in San Francisco

In addition, founder Sanjiva Nath has been asked to be a panelist at Enterprise Data World on April 8 in Tampa Bay, to discuss how enterprise data integration professionals can leverage semantic web technologies for rich information integration across the organization.

March 19, San Jose: zAgile Co-Sponsoring Atlassian User Group

We hope you can join us and our friends at CustomWare in San Jose, CA on March 19 at the San Jose Art Museum. Already looks like a great crowd signed up.

Please make sure to register here.

zAgile Invited to OSBC Panel on Open-Core

Many thanks to one of my favorite bloggers and OSBC organizer Matt Asay of Alfresco for the gracious invitation to join a panel with commercial open source vendor exectuives at OSBC.

The title of the session is, "Open-Core Licensing:  The New Business Model Standard for Commercial Softtware," taken from my most recent blog on the subject.

I will join moderator Dave Rosenberg, COO and GM, Americas at RiverMuse, Ed Boyajian, CEO of EnterpriseDB, and Aaron Fulkerson, CEO of MindTouch.

The topic is touched upon again today by Matt Asay and Zach Urlocker.

SD Times Recognizes zAgile's "No Tools, Open Source" Approach to ALM 2.0

It's quite a nice way to end the week with some great coverage from Jeff Feinman of SD Times.

Some of the more salient points that Jeff captured:

• When it comes to application life-cycle management, zAgile is saying, “Tools? We don’t need no stinkin’ tools!” That is the calling card of the latest company on the ALM block to offer an integration bus that allows for third-party development software. However, zAgile solely facilitates the use of outside development software, not its own.
• “We interpret ALM 2.0 as information sharing among the various products, and that’s what software information management means.”
• zAgile provides an open-source semantic framework, an integration bus that allows tools and methodologies from all companies. It touts the notion of software information management, which the company defines as the integration and management of information associated with all phases and aspects of the software engineering life cycle. The company gives real-time dashboards that track the performance of those tools.
• “We don’t get into the methodology or process religion: Is waterfall better than agile methods?” Lampitt said. “We accommodate the processes as to what the organization has. The one tool we do have is a process definition tool, where you capture the processes, and then you can instantiate your tools with projects corresponding to that methodology.”

And on our open source approach:

• In talking about the benefits of an open-source ALM framework, Lampitt said, “You’re not paying anything until you’ve proven it out in your own organization. You download it and say, ‘I know I need some integration, but I don’t feel like putting down a couple hundred thousand dollars just to see if it works.’

Finally, a nice summary quote by founder, Sanjiva Nath:

• “People were always trying to improve process, but I felt there were four things that ultimately make software endeavors happen successfully: community, knowledge, process and collaboration. I tried to envision a platform that brings all of this together, but not one that offers people a new set of tools, because there are 20,000 of them out there.”

Open-Core Licensing: The New Standard in Commercial Software Business Models

I am sure you can imagine how surprised I am that my first blog post (on the Open-Core Licensing business model) is the blog that just keeps on giving.

I think most of us are completely sick of hearing and debating about it, but to quote Michael Corleone in the Godfather series, “Just when I thought I was out... they pull me back in..”

Back in August when I first posted about the Open-Core model, I was simply articulating what Jaspersoft and other of the more successful commercial open source vendors were doing. I invented nothing, just articulated it. I composed that blog out of frustration and wonderment as to how industry pundits seemed to ignore the fact that the emperor was wearing no clothes. Back then the conventional wisdom was, “Red Hat is the most successful open source software company, so success must follow their model.”  I think points were ignored about the total potential size of the installed market determining how far you can go on services revenues. I simply pointed out the fact that traditional support-oriented open source vendors like MySQL over time were adding commercial features, AND … there is nothing wrong with that.

Now there is more weighing in around Open-Core:
-     “whether the Open Core model is sustainable in the long-term (I'm thinking 5-10 years).“
-    “There isn't one single model for commercializing open source, and things will continue to evolve as the market expands. What worked in the past may not always apply in the future.” No going out on a limb there. 

This all leaves me scratching my head again. Doesn’t everyone realize that the genie is out of the bottle? (sorry, all these clichés keep popping to mind.) Commercial open source is here to stay, everyone agrees. But the commercial proprietary model has been the most successful commercial model the past 30 years... Is it too outrageous of a claim to recognize the following convergence of the two, which appears to be happening before our eyes:

Open-Core is the new emerging standard in commercial software business models.

Forget open-core being popular just in open source circles, I mean commercial software in general. I predict that in 5-10 years (just about the time its diminishing importance is being predicted by some), Open-Core will be the standard for most new software companies arriving on the scene. Given the AGPL, this does not of course preclude SaaS models. The traditional proprietary MISO giants (Microsoft, IBM, SAP, and Oracle) will be considered legacy. Unless they act fast. Amazingly, Microsoft is making great strides toward open source (though they are using more of an Open-Crust, those features on top of the core, than Open-Core; still there is talk out there about open sourcing Windows. Reminds me of when I thought they were dead when Netscape arrived, and wham, they flipped on a dime! (How many clichés will I actually use in this blog?) That company re-invents itself more than Madonna. IBM is a big, obvious advocate and promoter of Open Source. Besides its investment arm, I am not aware of SAP making any big open source moves within its own software family, aside from MaxDB (what ever happened to that?). And Oracle has some open source projects here and there (SleepyCat, InnoDB), but can anyone imagine them open sourcing the Oracle RDBMS? Not likely.

Yes, you will have niche products whose creators will believe their products and ingenuity is so unique that they simply can’t divulge any secret sauces (think Ab Initio an exotic black box ETL / data integration tool – by the way how many people do you know using it? One, if you are lucky. I will reserve comment on that for a  different blog). But I think those products will be in the minority and be considered quaint ("your product is COMPLETLEY proprietary? Hey this is 2015, not 1995!").

Does this Open-Core business model drive the software industry to become a commodity industry? Perhaps... scary, ay?  But commodity only in some respects, I would imagine. Innovation may be driven with core and crust features alike, and revenue can be driven primarily with the crust features in a very successful way. This is why I think open source despite some conventional (forgetful) wisdom, and even more so with the Open-Core model, is actually a wonderful model to drive adoption of innovative technologies. Open-Core is not only for commodity core technology. And this is why zAgile has selected Open-Core as the business model to drive wide adoption of its own very innovative core technology (released into public beta on SourceForge 1 month ago). Remember, there were some very innovative technologies driven by open source, things like: the original Unix, Apache, Mozilla browser, and the world wide web, to name a few. So why can’t open source in general and the open-core business model in particular drive wide adoption of innovative technologies too? Over the next few years, far from fading and particularly aided by the dire economy, Open-Core will become the standard in commercial software.

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****Special thanks to Matt Dahlman and Sherman Wood for their edits and input to this post.

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Check out my other posts on Open-Core Licensing:

• Open Core Licensing defined (AUG08)
• New and Improved Open Core, with AGPL (FEB08)
• Variants on Open Core (APR09)