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Christopher Keene is an entrepreneur, executive and educator. He is the VP of Cloud Computing Solutions at VMWare. Chris is a DZone MVB and is not an employee of DZone and has posted 38 posts at DZone. You can read more from them at their website. View Full User Profile

Death by Cloud - How Amazon is Killing Open Source Software

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The mood at last week's Open Source Think Tank was surprisingly somber. Two years ago, the open source community was celebrating huge acquisitions such as Sun's purchase of MySQL (and even the VMware acquisition of WaveMaker). This year, the consensus was that the economic model which led to success for companies like MySQL and RedHat is being fundamentally disrupted by cloud computing.

For example, Amazon recently launched a successful Relational Database Service (RDS). This hugely profitable service is based on MySQL, but Amazon doesn't pay MySQL a penny for it. This spells death for the traditional open source business model.

To understand why, let's look at how the open source model used to work. The open source business model has traditionally been based on two revenue streams: 1) revenue from OEMs who embed an open source product into their commercial offering and 2) revenue from providing support services for production systems that embed an open source product.

Whenever a company embedded MySQL into their commercial offering, they had to either license their own product under an open source license like GPL or buy a commercial license from MySQL. Just as importantly, a company using MySQL in a production environment would purchase support from MySQL as an insurance policy.

Now let's look at Amazon RDS. First of all, Amazon gets around the GPL license because they are not delivering binaries to their customers. This means that Amazon can deliver a commercial service without being forced to open source their own software. Next, Amazon has sufficient internal expertise on MySQL that they can provide their own support.

The open source community has tried to fight back. For example, the new Affero GPL license (AGPL) was supposed to fix the loophole which allows Amazon to deliver MySQL as a commercial service. However, since almost nobody is using the AGPL license, every OSS project faces the prospect of seeing someone else deliver commercial services based on their product for which they don't get paid.

New open source companies are trying to get ahead of this trend by offering their own cloud-based service - such as Cloudera (Hadoop). This is a good idea, but it is not clear how these stand alone services will be able to compete with Amazon's Elastic Mapreduce service, also based on Hadoop.

Of course, none of this is going to stop the success of the open source movement in general. There are many projects which have no commercial aspirations. However, until open source companies can articulate a business model that can thrive in the cloud, this does cap the potential valuations of open source companies and hence their access to venture capital.
Published at DZone with permission of Chris Keene, author and DZone MVB. (source)

(Note: Opinions expressed in this article and its replies are the opinions of their respective authors and not those of DZone, Inc.)


Jörg Buchberger replied on Thu, 2011/04/14 - 5:27am

Hi Chris,
thanks for sharing your thoughts - although I don't quite agree with your final conclusion that cloud offerings from big players must eventually lead to the death of open source projects with commercial aspirations ...
what will such a big player do, when the open source project that the cloud offering is based on will start to whither because the revenue stream collapses? The big player has to react, because otherwise their cloud offering will start to suffer too ... either they step in themselves and assign part of their workforce to help that open source project or they help ensure continued maintenance and innovation of the project by simply sponsoring directly ...
well, they could also replace that whithering open source part of their stack with another one that is still thriving, but they cannot go on like a grasshopper forever. The more big players would "grasshop" the sooner they'd hit the end of that strategies rope.


Jonathan Fisher replied on Fri, 2011/04/15 - 3:34am

I digress: APGL will kill open source. The patches large companies submit to projects will go from a trickle to a halt. I would say this license is the worst thing to happen to open source since Microsoft.

AGPL is overbearing and downright dangerous for companies of scale. It's completely unneeded to force a company to expose it's proprietary code when your goal is to make them publish their modifications to the open source library. The terms of the AGPL and the viral clause within it ensure that your project will never have any serious corporate backing, high-risk companies (companies that make a lot of money but are targets for bored lawyers), or use within large enterprises.

Furthermore, none of the GPL/AGPL/LGPL licenses have been defined concretely base American case law. I know Richard Stallman has discussed hundreds of times the intended meaning, but there are many ways to interpret "intimate data communication" for example. Until a court rules on the terms, they're open for interpretation.

If your goal was to force companies to participate, they won't; They just won't play the game. AGPL is a loss, not a win.

Shoaib Almas replied on Sat, 2012/01/21 - 11:54am

Another way to look at this may be that OS companies need to look at selling cloud/paas or whatever you want to call it to their customers. OSS can just be the lubricant onto their hosted platform or they can sell value added services around an OSS framework. It seems like selling any type of software license whether for OS or otherwise is becoming harder and harder. It was interesting to see Adobe's recent announcement around subscription pricing for Creative Suite. It seems if you're selling to developers it's easier to convince them to pay for a hosted service than a license or support agreement.

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