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WWW.LINAGORA.COM
Proprietary entrapmentLibre and Open Source "flavor"
in software supplier business models
Ludovic SchurrChief Legal Officer
2
: who we are
● 12 years of experience in FOSS publishing, development, consulting and training
● Assistance with design of FOSS policy of more than 30 major client accounts in France (esp. Renault, Carrefour, Air France, Société Générale, Thalès)
● Specific think-tank dedicated to adressing legal and business issues related to FOSS : "Centre Juridique Open Source" (i.e. "Open Source Legal Center") – cjos.org (currently undergoing update)
● We are currently helping a major automotive constructor with their open source governance policy
● Your speaker: Ludovic Schurr
● Linagora Chief Legal Officer & CJOS research leader
● Former attorney at law specialized in Tech, IP & FOSS
3
Open source software: core of innovation
4
FOSS adoption factors
●Benefits
● Vendor independent, not "MISO"-locked (Microsoft IBM SAP Oracle)
● Integration flexibility and modularity
● Cost efficiency (no license cost)
● Standard-based technology
● Stability & security
●Frequent drawbacks
● Lack of in-house implementation skill set
● Standardization often based on closed standards
● Unavailability of long-term support
5
OSS interventions by proprietary publishers
• Shared Source initiative Some code is shared with clients, partners, dev communities to enrich development Shared code is for example Windows, MSOffice or dev tools such as WiX ou WTL
• Open Source CodePlex foundation created in 2009, initiated by Microsoft Relay between proprietary software publishers and open source world Inciting proprietary software publishers to contribute to open source projects
Initiatives / offers
• Increasing participation in open projects SAP contribution increase to Open Source communities: x100 multiplication of
SAP contributions to open source projects according to the R&D executive in charge of SAP Netweaver platform during october 2009 Tech Ed publisher conference
Announcement of future participation in Apache foundation
• Display of goodwill towards FOSS world Open sourcing of some software
- Oracle SQL Developer (graphical development)- Oracle JDeveloper (dev environment)- Oracle Berkley DB Family (databases)- Oracle VM (virtualization software)
Eclipse community member (free development environment)
Aims
• Communication / marketing
• Technological watch
• Exerting control / stemming the FOSS phenomenon
• IBM 2001 free software offer Service and free software solutions offer "Linux Technology Center" creation, with 900 engineers worldwide and 400
working full-time on open source projects
6
Supplier selection expectations
●Clients select suppliers who claim to do FOSS, expecting increased benefits and minimized drawbacks
●Reality depends on supplier business model
●Some self-styled FOSS business models incur decreased benefits, and sustained drawbacks
●BUYER BEWARE !
7
Software supplier business models
●There are five possible software supplier business models
●Proprietary
●Scavenger
● Freemium (aka "open core")
●Dual-licenser
● Free-free (aka "pure player")
●Some combinations are possible (not all though)
8
Proprietary business model
● 0% FOSS
●Expect none of the FOSS benefits
●Client situation
●Subject to proprietary entrapment through the software license
– Costly
– Limitative
●Complete lock-in regarding format & implementation
●Completely dependent on the publisher and its authorized partner network for support
9
Freemium business model
●Portmanteau word of "free" and "premium"
● Also known as "open core"
●Software is only 50 to 80% FOSS
● FOSS part functionalities are basic & trivial
● Real added value only in the proprietary part of the software
●Strong marketing emphasis on FOSS part of the software
● Baiting the hook with open source "flavor" to catch clients
●Client situation
● Proprietary entrapment identical to that of any other client of a proprietary software supplier
10
Dual-licenser
● 2 concurrent software versions
● FOSS community version, never supported by the publisher
● Proprietary commercial version, to which any payable support services are linked
● Marketing emphasis on the FOSS aspect of the software
● Counting on the open source "flavor" to ensnare clients
● Difference between FOSS and proprietary versions is kept secret
● Counting on client fear that the FOSS version does not cover its needs
● Client situation
● Proprietary entrapment situation unless client ascertains
– The difference between the 2 versions
– That the FOSS version covers its needs
11
Scavenger business model
● Scavenger uses FOSS bricks and components to buildhis solution
● Proportion is random and depends on the needs of the software supplier
● Scavenger only wants to cut costs on his software
● Software result can be provided under a proprietary licence or an open source license
● Client situation
● Depends on the licence
– If the final result is not FOSS, the client situation is identical to that of any other client of a proprietary software supplier
– Prime example: iOS based on modified BSD-Unix kernel
12
Free-free business model
●The "pure player", and only fully FOSS-compliant business model
●Supplier
● Provides the software for free as in both beer and speech
● Offers services aiming at offsetting the drawbacks of FOSS software
– Deployment & integration services
– Training of client personnel services
– Long-term support services
●Client situation
● All benefits of FOSS
● Minimized drawbacks
13
User cases #1 & 2
● Major ministry and a major airline
● Situation: Dual-licensing
● Clients use Red Hat Entreprise Linux, subscribed to full licence and support offer
● Analysis
● Deployment beyond 100 servers, whereas licensing tariffs depend on number of deployed servers
● Cost of RHEL deployment over 100 servers > support cost of Fedora by a third-party
● Solution
● Progressive dual-sourcing
● Migration to Fedora or CentOS whenever possible + support by third-party
● A very few RHEL servers kept for specific, critical tasks
14
User case #3
● Major railway company
● Situation: Dual-licensing, with freemium aspect
● Uses a dual-licensed DataBase Management Software
● Subscribed to the commercial offer in order to get publisher support
● Publisher increases support subscription costs exponentially
● Analysis
● Different development cycle between community and commercial versions
– Commercial DBMS : rolling upgrades
– Community DBMS : identical to each new major commercial version
● Solution
● Migration from commercial DBMS to corresponding community DBMS whenever possible
● Support of the community DBMS by a third-party
– Bug corrections
– If necessary, progressive backport of latter community DBMS technical functionalities in order to achieve iso-functionality between commercial DBMS & community DBMS
15
User case #4
● MySQL & MariaDB
● Situation: Dual-licensing with deprecation of community version
● MySQL was intially "free-free"
● In 2008, acquisition by SUN, MySQL becomes dual-licensed and the new development process discourages contributions
● Sun is bought by Oracle in 2009, and there is a strong indication that Oracle is not too supportive of MySQL
● Analysis
● An alternative is needed
● Solution
● Community developers of early MySQL versions have forked to MariaDB
– Strong effort of backwards compatibility
● The community itself can provide solutions to proprietary entrapment problems
16
User case #5
● Alfresco
● Situation: Freemium
● Initially "free-free" but switched to freemium
● Strongly incites integrators to enter "partnership" agreements so that integrators can only use Alfresco Enterprise Edition for integration purposes (both internal & external)
● Analysis
● Alfresco Enterprise Edition can be too costly
● Alfresco Community Edition can be technically and functionally unsatisfying
● Solution
● Progressive dual-sourcing
● Migration to Community Edition whenever possible with additional support by third-party
● Migration to an alternative Enterprise Content Management software (Nuxeo or Openprodoc for example)
17
User case #6
●Embedded open source projects
●Situation: Scavenging leading to various business models● Multiple offers entail a very important market fragmentation
●Analysis● Difficult to select the appropriate project
● Market immaturity
● No warranties in terms of sustainability
●Solution● Selecting either a "pure player" or a community project
● Buying OSS support from said "pure player" or a third-party for the community project
18
Warning hints & telltale clues
●Software combines FOSS base and payable non-FOSS extra
●Existence of a "Community version" (hints at the existence of an "Enterprise version")
●Restrictive commercial agreement in combination with a FOSS license
●Suppliers requires execution of a second license agreement alongside the FOSS licence
●Supplier is evasive regarding the basic components of his software
●Supplier offers "Feature Add-Ons" for sale
19
What can you do?
● Identify supplier business models by analyzing
● Commercial offer structure
● Technical software architecture
● Legal supplier agreement clauses
● Avoid freemium business models like plague
● Be wary of dual-licensing business models
● Prefer suppliers with a free-free business model
● Don't be afraid of selecting community projects or community versions of commercial projects
● Community projects are no less solid than company-driven ones
● Several companies, such as notably Openlogic or Linagora, provide
– Software publisher-like OSS support
– Bugfixing warranties for community-driven solutions
20
THANK YOUDo you have any questions ?