Two Predictions for Open Source Software in 2009

Prediction #1: The adoption of open source will accelerate in 2009.

Open source is on a tear. It's being adopted more quickly and more widely than ever before. Evidence: In November, Gartner announced survey results that found that 85% of enterprises are already using open source software, and the remaining 15% plan to start using it soon. (And my guess is, a good portion of that 15% are already using it, but management doesn't know.)

On the Optaros blog, Bruno von Rotz offers a good summary of what's happened in 2008 in the world of open source, and a lot of it is encouraging news for open source vendors (sales growing faster than expected, more rounds of funding, etc.).

With companies in all industries hitting the pause button on spending, open source should prove especially attractive in 2009. If you're a project manager, and you're being asked to do more with less or even with practically nothing, you're likely to take a good, hard look at open source, at least for a pilot project, even if you've had qualms about the maturity or stability of open source products in your area of expertise.

Earlier this month, Gartner analysts advised their clients to prepare two IT budgets: one with a 2% increase in spending, the other with a 20% decrease in spending. If your IT budget really does get slashed by 20% or more, you'll have little choice but to consider software products that offer a basic version for free, and whose paid products have prices that will turn out to be highly negotiable.

Bottom line, then: 2009 will create many new opportunities for open source vendors to get their feet in the door.

Prediction #2: Many open source vendors will continue to struggle, and some well-known vendors will shut down.

Unfortunately, getting your foot in the door is no guarantee of success. Despite the impressive adoption of open source and the continued rounds of funding, many open source vendors are struggling to make money—in some cases, even after receiving many tens of millions of dollars of VC investments. The sad truth is that even some of the well known names in open source—companies with good products and impressively high numbers of downloads—are having trouble converting those downloads and installations into a viable business.

Part of the problem is that the free version of products are often good enough to satisfy customer requirements. If customers don't have to spend money to get features, and if the product is reliable enough (or not mission-critical), customers won't spend money on licensing and support.

Part of the problem is that while the download numbers are growing, the company has yet to find a repeatable sales model for converting downloads to sales; end user requirements are simply too varied to build a profitable business.

Part of the problem also is that free has to compete with cheap (or at least comparatively inexpensive). On the Open NMS blog, Tarus Balog recently pointed out that open source network management products have to compete with low-cost, easy-to-use products like Solar Winds. He's absolutely right. And Solar Winds has been on its own tear for many years, now. Another up-and-coming NMS platform is AdventNet's ManageEngine, which knits together network management and service desk functions into an easy-to-use, highly affordable whole. AdventNet now has tens of thousands of paying customers for its network management products—an enviable achievement from the point of view of many open source vendors. If price is what's driving you to open source, and you're not particularly interested in having access to a product's source code, you may end up choosing one of these highly affordable non-open source alternatives instead.

Another part of the problem with open source companies comes down to simple execution: building what customers really want rather that what the core development team feels comfortable with (especially if the company is VC-backed and has real targets to hit); solving customer problems promptly and effectively through support, documentation, and training; marketing well; etc. Most open source companies are developer-led organizations, and some (decidedly not all, but some) developer-led organizations fall into the trap of expecting their potential community to share the internal team's own predilections and priorities. (If you hear an engineering manager saying something like, "That should be reasonable, it shouldn't be that hard for the customer to figure out," stop the design discussion right there: customers should have to figure out almost nothing.)

A few vendors may find financial salvation by converting or substantially augmenting their open source business with a SaaS business and close deal that are SaaS subscriptions rather than on-premise software licenses. But for other vendors time will eventually run out. Investors will shift new funding other more viable ventures. Staff cuts will paralyze progress. Projects will be left to linger on SourceForge.

This is why I expect 2009 to be a mixed year for open source vendors. It will be a year of unprecedented opportunity for most, and a year of hard reckoning for some.

Zoho CloudSQL: An interview with Rodrigo Vaca

Earlier this week, Zoho announced CloudSQL, a new SQL interface to Zoho Reports, its popular Web application for online reporting and business intelligence. Zoho applications (in case you haven't heard of them) are credible alternatives to Google Software-as-a-Service (SaaS) applications such as Google Docs. Launched three years ago, the suite of Zoho applications has grown dramatically in number of applications, richness of features, and size of its user base. The company now boasts over 1 million users for its 19 applications. More applications are on the way.


Here's how Rodrigo Vaca, Zoho's Director of Marketing, described CloudSQL in a blog post earlier this week:

Zoho CloudSQL is a middleware technology that allows customers to interact with their business data stored in Zoho through the familiar SQL language. Customers are able to access Zoho cloud data using SQL on both other cloud applications as well as through traditional on-premises software.

At a high-level, Zoho CloudSQL serves as the bridge between the external application and the data stored inside Zoho. It receives the query in SQL, interprets it, delegates queries and aggregates results across the Zoho services.

There are in particular 3 things that stand out about Zoho CloudSQL:

• It's the first technology that allows customers to interact with their data on the cloud, from another cloud application or from an on-premises one through real SQL.


• It supports multiple SQL dialects. We support all the major (and even some not so major) ones: ANSI, Oracle, SQL Server, IBM DB2, MySQL, PostgreSQL and Informix.


• With our JDBC/ODBC drivers, developers can access data in the cloud just as easily as if it were stored in a local database.
  

A Quick Interview
I got in touch with Rodrigo Vaca to ask him a few follow-up questions.

JB: From your announcement, I'm gathering that CloudSQL is a SQL-based service for accessing data in Zoho applications. The interface will be of interest to engineers working on integration projects where they would like to simply work with SQL queries, rather than dealing with JSON or RESTful data access. Is this an accurate characterization?

RV: Yes, that's accurate. Zoho CloudSQL is about making the data in the Zoho cloud more accessible for our customers. SQL is something that most corporate developers know and are familiar with.


JB: The diagram on your December 2 blog post shows CloudSQL being able to access other Web services. Are there non-Zoho Web services you plan to support? Say, any Web services from StrikeIron, ProgrammableWeb, or even Google, etc.?

RV: Ah! You were paying attention! You noticed something that most other people missed. Yes, Zoho CloudSQL can be extended to non-Zoho services. At this point we're not focused or actively pursing that, since we need to first make sure that other Zoho services are accessible through CloudSQL first.

JB: Finally, I was intrigued to see that you're doing entity-mapping, which makes sense. It makes me think of the work Microsoft has been doing in its Project Astoria group (creating a framework now called ADO.NET), where they're using entity mapping to present a non-SQL-based interface to SQL-Server data. Do your RESTful APIs make use of this entity mapping? Does Zoho have plans to publish an Astoria-like interface to Zoho data?

RV: Our REST API should provide all the necessary details for developers, so we don't have plans for entity-mapping like Astoria. We would recommend CloudSQL, as the standard interface for developers, especially as we increase its coverage across Zoho applications.

To learn more about CloudSQL, visit this Zoho wiki page here.

Au Courant: Making the Most of Twitter for Business

Lots of high tech companies still don't use Twitter or use it well (e.g., they read tweets, but never post; they don't monitor keywords related to their business; they never initiate dialogs with strangers).

These tech-savvy but Twitter-naive companies could learn a thing or two from the world of letters. A growing number of small presses are taking advantage of the Twitter platform and 140-character tweets to share news, build communities, and offer promotions.

New Directions Press (@NewDirections) regularly posts about upcoming publications (and since they frequently involve Roberto Bolano, I update my bookstore wish list accordingly). Richard Nash of SoftSkull Press (@softskull) is another frequent Twitter user. He recently used Twitter to announce a new catalog:

Soft Skull Spring 09 catalog now available, yo. Download http://is.gd/8zrR & email for review copies. (Here's Winter 09 http://is.gd/8zE1 )

Today he retweeted a promotion from highly esteemed Graywolf Press (@GraywolfPress):

RT @GraywolfPress: REMINDER: get 25% off your entire order at www.graywolfpress.org. Use code "twitter25" in customer notes Good til Monday.

Businesses of all kinds, including software companies, could learn a thing or two about social media strategies from book people like Nash and the Twitter users at these other presses. And, of course, business people will also want to take advantage of that promotion from Graywolf—a longtime publisher of wonderful books. And then there's the new catalog from SoftSkull and ...

Moore's Law for Data Integration

The year is 1999, and your company wants to customize its new CRM system so sales people can access contract records from the Finance department's database. The CRM system itself took 9 months to deploy. Everyone's tired of the training classes. The six consultants who implemented the CRM system have lost a few people and gained a few people. Looks like they'll be bringing in someone else to manage this customization, which should take 4-5 months, tops.

Flashforward to 2008. It's September, you're using SugarCRM as your CRM system. You'd like to, again, integrate your CRM system with your Finance system. This time you'd like to do it using MindTouch Deki, a popular open source wiki and collaboration platform, and SnapLogic, an open source data integration framework. Good choice: the entire project, from start to finish, is completed in under two weeks.

No big, expensive consulting contracts. No "tent village" of Big Four consultants camped out by the computer room. An IT manager conceives the project, and within two weeks, it's done.

There's a paradigm shift that's occurred in enterprise IT, and it promises to make the next few years genuinely exciting, despite the downturn.

Over the past decade, application vendors have learned the wisdom of first, opening their APIs, and second, eliminating the complexity of their APIs by adopting a RESTful Web services model for integration.

The result has been a increase in agility for business users and IT department that is proving to be as dramatic, in terms of applications deployments and end user experience, as Moore's law has been for hardware development. Moore's law, you'll recall, is Gordon Moore's observation, first made in 1965, that "the number of transistors that can be placed inexpensively on an integrated circuit has increased exponentially, doubling approximately every two years" (Wikipedia). Thanks to Moore's law, your bookbag can hold a laptop more powerful that a mainframe from a few decades ago. And you watch videos on your MP3 player, which is roughly the size of a pack of gum.

Open source and RESTful APIs (which make use of basic GETs and PUTs, rather than relying on more complex messaging schemes) give enterprise IT organization powerful building blocks for rapidly building new, powerful application solutions—applications that literally would have required man years of programming less than a decade ago.

A year ago, there was a lot of buzz about enterprise mashups that blended two or more data sources. Mashups are still exciting, but what's equally exciting is a kind of mashup occurring at the application level.

Today's announcement by Salesforce.com that its Force.com development platform would work with Facebook APIs, enabling Salesforce.com's 100,000-strong developer community to more easily access the vast library of applications built on Salesforce, is more evidence of this trend.

Other evidence of this trend:

• The ongoing success of the Web site, ProgrammableWeb, which serves as a portal for discovering application APIs and mashups. ProgrammableWeb now has 1,000 APIs in its API directory. Clearly, a lot of companies are publishing APIs.
  
• Once published, APIs often become the dominant channel for accessing an application. As ProgrammableWeb's John Musser points out in a blog post about the 1,000-API milestone:
  
  
  
  • 60% of eBay's listing come from their APIs, rather than through their browser-based interface.
    
  • Twitter's APIs carry 10x the traffic of its Web site.
    
  
  
• REST is becoming the dominant programming model for APIs. 63% of the APIs listed in ProgrammableWeb's directory are RESTful.
  
• New Content Management Systems, such as Alfresco Enterprise 3.0, feature REST interfaces so they can easily access business data from other IT systems.
  
• New applications, such as an increasingly popular network management/IT operations platform offered by an Indian company, use REST APIs to facilitate communication among components. RESTful integration enables one product, for example, a network troubleshooting tool, to easily pass information to a related component, such as a trouble-ticketing application used by a help desk.
  

Enterprise Management Associates analyst Dennis Drogseth is fond of saying that enterprise IT organizations know they need to move to a "lego world." No single IT system has a monopoly on vital data. Best practices call for the automated flow of information seamlessly from one system to another: from a network diagnostic tool to a help desk application, for example, or from a finance system into a wiki, which in turn is embedded in SugarCRM. The key to that flow is having components designed to fit together with other components, even from other vendors.

It sounds like a lot of work. It's dramatically less work than it used to be. Thanks to open APIs, REST, and Web-centric architectures, data integration and application development can beneft from a Moore's law of their own.

Getting Strategic

Whether you're embarking on your normal planning for the next calendar year, or participating in emergency planning sessions in response to the economic slow-down, it's worth remembering the core attributes and benefits of a strategic plan.

Here's a summary from an earlier post.

About that Economic Slowdown

Another sign of the slowing economy: a sharp drop in retail sales in September. Here's the news from AP:

The Commerce Department reported Wednesday retail sales decreased 1.2 percent last month, nearly double the 0.7 percent drop that had been expected. It was the biggest decline since retail sales fell by 1.4 percent in August 2005.


The bigger-than-expected decline significantly increased the risks of a recession because consumer spending is two-thirds of total economic activity.

How big will this recession be? How long will it last, and what will the economy look like on the other side? Venture capitalist Paul Kedrosky offers his predictions, which include:

• "The unwinding of all this credit bubble will take longer than most people expect, and the damage will continue to be broader than most expect. Beyond banks and financial institutions, it will include many municipalities, some large-cap tech names reliant on major debt-financed network buildouts, a host of debt-financed non-financial companies, and some sovereign nations. Total cost: Bridgewater's $2.7-trillion looks close enough to me .
  
• We are already in a recession that will last well into the the fourth quarter of next year.
  
• Unemployment may touch 9% in the U.S. at trough.
  
• Housing will fall 10-15% further in U.S., and we are only beginning major declines in Canada, U.K., Australia, and elsewhere.
  
• U.S. consumers will become much more aggressive savers, both through debt reduction and direct saving. Similarly, future fiscal stimulus will largely be saved in service of this overdue need to fix domestic balance sheets.
  
• Commodities will stay under pressure for the next two years,and then reverse savagely as developed countries emerge from recession at very similar times. We have newly resynchronized the global economies, which will have immense consequences.
  
• Coming out the other side, we will see a barbell economy, with growth and investor interest at the mega-cap consolidator end, and at the entrepreneurial smaller end. The latter will be driven by major developments in clean technology, in particular, which was just given a two-year window to gestate before the major economies worldwide turn higher and begin driving energy prices straight up."
  

Read more of Paul Kedrosky's analysis here.

Two Suggestions for Social Media Strategies

A friend of mine who runs a PR agency called me yesterday, asking for my thoughts on social media strategies. Here's what I told him.

In addition to all the standard advice—start a blog, comment on other people's blogs, participate in forums, communicate and collaborate with your customers online, etc.—remember that an effective social media strategy involves both online and offline work. The online work is fairly obvious (the aforementioned blogs, etc.). The offline work may not be obvious, but it's pretty simple. Go meet with the people in your online communities. Blog about topics, then go to events where people talk about those topics. Meet new people there, and continue the relationships online. Your customers and partners are real, walking, talking, full-blooded people, not just users who who filled out profiles on your site. Meet them face-to-face, and have conversations you would never have online. If you think social media means hunkering down in a cubicle, blogging, linking, and fine-tuning SEO, think again. Social media is about being social with other people, online and off. Budget for travel. Get your social media marketing manager out there at trade shows, in restaurants, in blogger's lounges, and at any other location where your community hangs out.

Second, as I've said before about growing communities in the open source world, you've got to both "do" and "show that you do." In other words, you've got to document all your community work. If you show up at an unconference attended by 250 people in Cambridge, chances are that 50 people at most will remember meeting you (maybe 100 or 200, if you're already a big name or especially vocal or you're the guy wearing the weird hat with the flashing lights—but do people really know that guy?). None of your prospective customers in St. Louis or Chicago or London will know you went there. So you need to blog about. Post photos on Flickr. Link. Document your sociability and your community involvement. That way, your community involvement will have a much broader reach.

Ever notice that social media pundits are always posting pictures of themselves drinking good burgundy or Belgian beer with their fellow social media pundits? Now you know why. (Besides the fact that they're just having fun. Which is a good idea, too. And good burgundies should be celebrated, I suppose.)

Now, if anyone out there would like to grab a beer and continue this discussion, just let me know.