Chronicles of a Wandering Mind - Latest Comments in Business models for open source it management companies

Re: Business models for open source it management companies

berkay — Sun, 04 May 2008 14:20:55 -0000

Hi Tarus,

Thanks for sharing your thoughts, ramble away, it's all welcome :)
Looks like you're going to be in Geneva in couple of weeks. How long will you be here? Love to get together if it works out.
PS: your blog's password reset system does not seem to work, just FYI

Re: Business models for open source it management companies

Tarus — Sun, 04 May 2008 09:06:48 -0000

Wow. This is a pretty accurate summation of the situation, and done well without any of my usual bias. (grin).

There is a huge difference between what OpenNMS attempts and the hybrid open source models. To choose an easy target, Microsoft publishes a lot of code under OSI approved licenses, but no one thinks of Microsoft as an open source company. Enterprises are tired of paying high per node prices for proprietary software licenses, be they fully closed or partially open, and in the long run the free and open solution will win. This doesn't mean that a hybrid company can't make money or provide a decent solution, but without a totally free and open application there is little difference between a partially-GPL'd application and a proprietary application with a decent API. Of course, you can always "fork" a GPL'd application, but when the vast majority of the code is controlled within the corporate sponsor, the chance of that happening is slim (although Red Hat's fork of the Hyperic agent is one example of what can happen).

At OpenNMS we do aspire to greater things, but since we run the commercial side as a profitable company it is taking time to build the business versus those companies with millions in VC. Our view is much more long term, whereas VC-backed firms are looking at a 5 year window. I think Groundwork provides an interesting case study. They've been around the longest of the hybrid management firms and they have raised about as much money as Hyperic and Zenoss combined. Yet they haven't really done as well as one might expect, and with the recent departure of Ranga (the CEO) they must be trying to figure out how to change that. It will be interesting to see how Hyperic and Zenoss avoid the same fate.

We don't see much competition from AdventNet, but we lost a number of opportunities to SolarWinds in the past. We have recently won several, so perhaps that is changing.

Our goal is for OpenNMS to become as powerful a framework as OpenView or Tivoli, with more agility and, of course, considerably less cost. Thus we focus mainly on scalability and flexibility, often at the expense of ease of use. As a services company, we want the most powerful tool, and our knowledge of how to best use that tool drives the services business. Most of our commercial customers are large enterprises and carriers who are looking at a spending hundreds of thousands of dollars (and more) on commercial frameworks. Our smaller users don't tend to buy support (although it does happen).

My point is that Solarwinds will probably be more successful than the hybrid companies because, as you state, they have "nicely packaged, easy to use products with often lower prices than the open source companies". What's Up Gold is considerably less expensive that the cheapest OpenNMS support contract, so if it works for you, great. Solarwinds is a well run software company that doesn't muddy the water with and open vs. closed version. It's easier for people to understand and to buy.

However, the larger you get the more custom your management needs become. Prepackaged solutions don't fit, and thus you need something more flexible. That's the niche we at OpenNMS are aiming for.

Anyway, sorry to ramble. Great post.

Re: Business models for open source it management companies

berkay — Sat, 03 May 2008 14:26:45 -0000

ahh now I see!
indeed the "only true" was not referring to the open source but refers to network monitoring aspect of OpenNMS which is my background.
Zenoss pretty much seems to do everything :) I'll have to learn more about the network monitoring capabilities. thnx!
I'll see whether I can slightly modify the post to shift the emphasize

Re: Business models for open source it management companies

Mark Hinkle — Sat, 03 May 2008 14:01:55 -0000

Berkay, I think I misinterpreted this sentence :

"Despite being compared to Hyperic and Zenoss, OpenNMS is different product. IMHO, it is the only true open source “network monitoring” product available. "

After carefully rereading I see you are advocating the use case for OpenNMS as network monitoring. I guess I have a heightened sensitivity when I see the mixture of company business models and opne source software. I would contend that Zenoss Core offers a very capable network management and monitoring capability as well. Thanks for the clarification.

Re: Business models for open source it management companies

berkay — Sat, 03 May 2008 13:47:31 -0000

Hi Mark,
Thanks for taking time to comment. I'm a bit puzzled. May be my post reads different than what I was trying to express. I certainly don't think that corporate sponsorship dilutes open source and also agree that it is just FUD. In fact, it is partly what I was trying to convey (clearly failed big time:-)
I see dual license model (GPL and proprietary) embraced by Zenoss and Hyperic as a business model innovation that enhances the options for customers, not as being not pure or as a negative. I also think that the innovation in the business model needs to continue to find even better models.
I used OpenNMS as an example of why we may need better models since the dual model is not an option for them (even if they wanted to embrace that model which they don't). IMHO, pure services model is limited and more resources are needed for companies like OpenNMS to be able to invest more into their products. Currently we seem to be stuck between the dual license and pure services models. I simply think alternatives are needed. What are they?
Any feedback you may be able to provide where I botched the post (that implied zenoss/openms/hyperic are not open source companies etc.) would be much appreciated as it is polar opposite of what I was trying to say.

Re: Business models for open source it management companies

Mark Hinkle — Sat, 03 May 2008 13:01:23 -0000

Berkay, while you are certainly entitled to your opinion. Last time I checked HypericHQ, Zenoss, and OpenNMS all our GPL software that adhere to the open source definition.

Let's take the companies out of the equation. I think all three products have merit and they all three have users who use them for a variety of reasons. Corporate sponsorship diluting the "purity" of an open source is just FUD. The code is there and obtainable from third parties like SF.net if the users don't like the direction of the project they can fork it.

Also I think you should delve a little deeper into this great distributed IP ownership hypothesis for some projects looking at the commits for development beyond the core teams and they are pretty limited. Read some copyright's for ALL three projects and you will see copyright notices from privately and publicly held companies.

I do think what might be interesting is to look at the forum activity and source code repositories and see what's really going in these projects. Just because companies charge for a relatively small amount of additional code and a high level of service doesn't necessarily mean that the open source offering isn't a very robust solution.