Has open source changed the game?

A panel of open source CEOs took the stage at the recent LinuxWorld conference for a panel called “The death of the enterprise software business model.” While one-sided, the discussion provided insight into the opportunities and challenges facing the community.

Moderated by Larry Augustin, chairman of VA Software, the panel featured Marc Fleury, founder and CEO of JBoss; Marten Mickos, CEO of MySQL; John Roberts, CEO and co-founder of SugarCRM; and Peter Levine, CEO of XenSource.

The benefits of open source development start with visibility, said Levine, who was an executive vice president at Veritas before joining XenSource in February. The company, which makes virtualization tools, already has 20 testers lined up for the beta of XenEnterprise, a packaged version of the company’s core product, when it comes out this summer. “At Veritas it was hard to get one,” he said.

And when products are available, buyers can typically experiment before committing to deployment. “Customers can try on the shoes before they buy them,” Mickos said. “The model just makes sense.”

In SugarCRM’s case, the folks trialing the software can be line-of-business users, Roberts said: “You don’t have to be a developer to evaluate our software.”

Wide visibility and accessibility leads to activity, which is good, but can make it hard to identify business opportunities, Mickos said. MySQL is downloaded 50,000 times a day, but only five of those might become new customers. “You have to be careful about lead qualification,” he said. What of the others? “The rest can help with bug fixes.”

But for all of the benefits, there is one major gotcha. “In open source, the rule is release early, release often. But that’s often at odds with what enterprises want,” JBoss’ Fleury said. “If I have $10 million to invest in product, we do 10 $1 million projects and put it out there to see what works.”

Enterprises don’t like to be flooded with releases because of the energy involved in adoption, nor do they typically like to serve as guinea pigs.

While that would appear to favor traditional software developers, it also represents a limitation. With conventional development, Levine said, “the train leaves the station every two years and if you don’t get your features on that train, you have to wait for a long time.”

It’s Fleury’s opinion that the benefits outweigh the drawbacks and the traditional crowd is getting nervous: “When open source was Linux and a penguin, very cute,” he said. “Now they hate our guts.”

Time will tell, Mickos said: “If open source is truly a superior way to develop software, as we claim, ultimately others will have to adopt it.”