The ‘No Secrets’ Software Strategy
Microsoft faced an unexpectedly tough opponent in 1998 in the form of the U.S. Department of Justice, but in 1999 the software giant is likely to contend with an even more potent force: the free-software movement, also known as “open source.”
A growing number of industry leaders, including IBM, Sun Microsystems and Netscape Communications are embracing the radical notion that giving away software, including the source code (the underlying instructions that the software is based on), while making money on service and support, is not only good business and good for the technology community, but may also be the best check on Microsoft’s growing power.
For that reason, the open-source movement will be one of the key high-tech stories to watch in 1999.
The open-source process for developing software is effective because it attracts a community of dedicated programmers, usually collaborating over the Internet, who help identify and fix bugs and add new functions to the software.
It is this process that developed the Internet itself by providing the software for such key features as e-mail and the Web browser.
It’s also the process Linus Torvalds, a Finnish student, used to launch Linux, the PC operating system that now has some 7 million users and is viewed by many as the strongest potential rival to Microsoft’s Windows system.
In the critical market for server software used to run networks, Linux saw its share more than double during the last year, to 17.2% from 6.8%, according to Framingham, Mass.-based market researcher IDC.
Software companies are flocking to develop applications for Linux. Oracle is making its corporate database software available on Linux. Corel is offering for free a Linux version of its WordPerfect word-processing program. Intel added credibility to the movement when it invested in Red Hat, the leading commercial distributor of Linux.
Open source “is the wave of the future,” says Jerry Krasner, an analyst with San Francisco-based Electronics Market Forecasters. “The ones who make money will be those who offer support and tools.”
Microsoft executives dismiss the open-source movement as hype.
“Complex future projects to add such functions as automatic translation of e-mail require big teams and big capital,” says Ed Muth, a Microsoft group marketing manager. “These are things that Robin Hood and his merry band in Sherwood Forest aren’t well attuned to do.”
But the movement is clearly causing concern in Microsoft’s hometown of Redmond, Wash. Microsoft engineer Vinod Valloppillil wrote a report, which was leaked and posted on the Internet at Halloween, in which he praised “the ability of the [open-source] process to collect and harness the collective IQ of thousands of individuals across the Internet.”
Valloppillil wrote that open-source software showed it could exceed the quality of commercial software and was therefore a “direct, short-term revenue and platform threat to Microsoft.”
The report recommended that Microsoft respond by taking control of key standards, picking up ideas from open-source forums and hiring away the movement’s brightest programmers.
Open-source evangelist Eric Raymond argues that Microsoft won’t be successful in undermining the movement because corporations are increasingly recognizing the danger of depending too heavily on Microsoft. Software developers, Microsoft’s most important allies, are waking up to the fact that “if you develop for Windows, Microsoft will find a way to hijack most of your value,” Raymond says.
Meanwhile, Microsoft’s rivals are turning to open source as a way of persuading more developers to write applications for their software. Sun Microsystems recently released the source code of its Java software, while Netscape released the source code for its Navigator browser.
IBM is building computer-networking software on Apache, an open-source program used to host Web sites, which has maintained a dominant share of its market in spite of strong competition from Microsoft’s Web server. IBM has also released the software instructions for an internally developed e-mail program as well as a Java tool.
Analysts say IBM can afford to embrace the open-source movement because it gets an increasing proportion of its revenue from integrating and supporting computer systems rather than from the sale of software.
One area in which open source could have a significant impact is in the market for the embedded software that goes into everything from microwave ovens to cell phones to hand-held computers.
Microsoft recently chose to tackle that market with its Windows CE operating system, with mixed results.
“The Microsoft model based on selling a lot of things that are the same runs into snags in the embedded world,” says Paul Zorfass, analyst at First Technology Inc. in Waltham, Mass.
Manufacturers of these devices want to be able to customize the software for their particular devices and don’t want to split their already slim profits with Microsoft.
By contrast, Cygnus Solutions, the Sunnyvale, Calif.-based leader in open-source software development tools, recently began offering a new operating system for embedded devices. Cygnus will offer the software for free and will share the source code so manufacturers can easily tailor it to their needs.
The software has already been adopted by Toyota and Fujitsu, and the company is working closely with other large vendors like Matsushita and Motorola.
How rapidly the open-source movement expands may depend in large part on how effective it is in adapting software, largely written for programmers, to a broader, often technically illiterate commercial market.
The e-mail server software Sendmail, for example, was developed 18 years ago by Eric Allman with the help of hundreds of interested programmers and now plays a dominant role in routing e-mail traffic over the Net. But Allman found his community of volunteers on the Net were reluctant to deal with such mundane issues as making the software easy to use. So earlier this year, Allman took Emeryville, Calif.-based Sendmail private.
“The Internet is increasingly commercial,” says Greg Olson, Sendmail’s chief executive. “Companies want packaged products that are fully tested. They want ease of use.”
Sendmail continues to offer a free, open-source version of its program to keep its Internet community active. But it has also developed proprietary features that make the software easier to use and which are packaged and sold to companies.
Free-software pioneer Richard Stallman thinks such efforts to profit from the open-source movement threaten to reduce the number of volunteers willing to sacrifice their time to work on free software. “Our community depends on the notion that proprietary software makes you worse off,” Stallman says.
But industry analysts say an equally important challenge to the movement is using the anarchic open-software process to produce ever more complex versions of such products as Apache.
“You’re talking about early-stage products,” says Zorfass, the First Technology analyst. “Let’s see if these products hold together in the second, third and fourth generations.”
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Leslie Helm can be reached via e-mail at leslie.helm@latimes.com.
