Is Open Source Ready for Prime Time?

CAMBRIDGE, Mass.—The emergence of stacks of open-source infrastructure software will spawn new opportunities for companies to enter and succeed in the open-source space, according to a panel of experts at a recent conference.

At the Harvard Business Schools annual Cyberposium here on Saturday, David Skok, a general partner with Matrix Partners, of Waltham, Mass., said, "We see the emergence of the open-source stack as a new phenomenon that will allow new companies to break into the enterprise. And with that stack, quality will come into the equation."

Companies such as SourceLabs Inc. and SpikeSource Inc., have entered the market with just this model in mind, offering an open-source software stack and providing services around it. The stack typically includes Linux, Apache, MySQL and PHP/Perl/Python components, otherwise known as LAMP.

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"A lot of enterprise companies are scared of dealing with small companies so theyll look for big brands," Skok said. "And companies like JBoss [Inc.] will bring in lots and lots of smaller [open-source] projects and fold them into their brand."

Marten Mickos, CEO of MySQL AB, of Uppsala, Sweden, said the reason he got into the open-source business "is to produce profits in the long run. For us it is reducing marketing costs and reducing product development costs. We go out to Google and type in MySQL sucks, and we find out all the things that are wrong with our product and then we go and fix them."

Click here for a column on the benefits of open-soure software.

Mickos said altruism is not a driver behind open-source development. He said people who write open-source code do so because "they want to learn something, they want to show something, they want something fixed—then after they do it they may want to become altruistic."

Meanwhile, Skok said that as a venture capitalist looking at the open-source businesses, he marvels at how "theyre really amazing businesses. We put $10 million into JBoss and they never touched the money.

"However, to start an open-source business, you have to have a very, very vibrant community and then you can create a business around that," Skok said.

Skok said Matrix got onto open-source software "when we started to notice something important in that our companies didnt want to pay royalties to Oracle [Corp.] and BEA [Systems Inc.]—they went to MySQL and JBoss. That was the trend and we were surprised by the quality of the software. That showed us this could take off in the enterprise."

Mickos agreed on the community issue but said that "community is not just the invention of open source. Borland [Software Corp.] had a great community and Microsoft [Corp.] has a very vibrant community and ecosystem of developers."

Brian Stevens, vice president of operating systems development at Red Hat Inc., of Raleigh, N.C., said to succeed as an open-source company, "you need to provide more value, youve got to be smart, and youve got to be lean. I compare it to the Southwest [Airlines] and Peoples Express model."

Mickos added: "I like to say I work nine to three. I work to take the database business from $9 billion to $3 billion."

Next page: Open-source business models.