Obligatory End of Year Post - 2009

Yes, I know it's already 2010, but this post is still my official "end of 2009" post. I've included some highlights from the posts on this blog along with my choice of top 5 open source stories and themes of the year. Please add your comments on what you think are the top stories for 2009.

Reflections on This Blog

The readership of this blog grew substantial in 2009 and I am very thankful for that. Visitors from 30 states, 29 countries and 6 continents came to this blog with the top 3 countries being the United States, Brazil and the United Kingdom. I have to admit, the prominence of Brazil surprised me. Visitors seemed to be attracted to a wide variety of subjects, but management of open source within a company and GPL enforcement seemed to be the favorites. Here are top 5 most visited posts of the year, beginning with the most popular:

1. In-House Counsel - Managing Open Source
2. FSF Motives in the Cisco Case
3. Obligatory End of Year Blog Post (2008) (emphasis on the FSF-Cisco case)
4. Highlights of the Open Source Business Conference - Day 1
5. Show Me the Money at OSCON - Venture Capital and Open Source

Top 5 Open Source Stories

Shifting to the industry as a whole, the top stories of 2009 also illustrated the importance of in-house open source management and GPL enforcement among many other themes. Below, I have provided my list of the top 5 stories and themes of the year:

1. Oracle Acquisition of Sun Microsystems - As a Sun employee, I have a deep personal interest in this deal, but it is also a significant event for the business of open source (not to mention the software and hardware business too), particularly the EU's competition investigation of the MySQL business. The deal could be characterized as a definitive affirmation of the importance of open source in that even companies whose success is perceived to rely on the traditional proprietary software model (such as Oracle), see open source as an important strategic element. Questions on the MySQL aspect of the deal even prompted industry heavyweights like Eben Moglen, founding Director of the Software Freedom Law Center, to explore the impact of the GPL.

2. GPL Enforcement Actions - The relative popularity of my blog posts on the Cisco-Free Software Foundation litigation (which has since settled) is one indication that GPL enforcement is a hot topic. This trend gained momentum throughout 2009 and will likely continue to do so in 2010. Examples include the Software Freedom Law Center's December announcement of litigation against Best Buy, Samsung, Westinghouse and 11 other entities on behalf of the owners of BusyBox, and a French court case in which users of GPL software got a ruling affirming their right to receive the source code to that software and modifications.

3. Microsoft Release of GPL Code - Few companies raise the ire of the open source community more than Microsoft. That's why open source proponents were pleased, and surprised, to see hear Microsoft announce that it would contribute driver code to the Linux kernel. It is not clear whether Microsoft's decision was based on necessity in the face of a potential GPL violation, or a strategic move to enhance compatibility with Linux. Regardless of the motive, Microsoft's actions indicate that even the most sophisticated of companies must pay close attention to their use of open source and honor the provisions of open source licenses. This is especially true in light of the recent enforcement activities discussed in the previous paragraph.

4. US Government Commitment to Open Source - The principles of technology neutrality have long been recognized in the European Union to the benefit of open source software usage by European governments. The United States federal government has not been as accommodating of open source, but at least two events in 2009 indicate a possible change in US attitudes. The US Department of Defense revised its guidelines on use of open source software in October to essentially give it a procurement preference over proprietary software when all else is equal. In addition, it appears that the Obama Administration is actively looking for ways to bring the benefits of open source to government operations.

5. Red Hat's 10 Year IPO Anniversary - Red Hat is commonly viewed as the most successful pure open source company with its status as a Fortune 500 company with a market cap of almost $6 billion and generating over $700 million in revenue in 2009. As such, it's longevity and success are significant barometers on the health of the open source business as a whole. With a lingering cloud over the economy, and the relatively slow growth trajectory of most open source companies, it seem unlikely that we will see any open source IPOs in 2010.

Please post your thoughts on the most important open source events of 2009. I wish the best of success to all of us in this corner of the world we call "open source."

[Note: The "Top 5" portion of this post was updated after the original post to make non-substantive changes for purposes of clarification and adding more reference links.]

Countdown - Open Source Style

I am a big fan of top 10 lists... particularly humorous ones a la David Letterman. While I can't claim that any of the top 10 list below is humorous, it does paint an interesting picture on the status of open source in the top 10 companies (by market cap) in the Software Application Industry (Technology Sector) of the stock market.

These 10 companies represent over 96% of the market capitalization in the Software Application category. At the end of each entry, I give the company a (purely subjective) grade reflective of its efforts, commitment and contributions to the open source community.

So, here we go...

10. Sybase ($2.7B) - Database Management, Information Management and Business Intelligence Software. Sybase appears to have made at least a minimal effort to embrace open source. It even has an OSI approved license (the Sybase Open Watcom Public License). More important is how many of Sybase's competitors have serious open source credentials ... MySQL/Sun, Pentaho, JasperSoft, GreenPlum. Grade - D.

9. Nuance Communications ($4.1B) - Speech and Imaging Solutions Software. A search for "open source" on the company website results in 0 hits. Enough said. Unfortunately, there are no open source options. Grade - F.

8. Red Hat ($4.2B) - Linux and JBoss Provider. Red Hat, as we all know, is one of the premiere examples of open source software industry success. Enough said. Other Linux providers exist, as do other OS providers, but Red Hat is the go-to open source vendor. Grade - A.

7. BMC Software ($7B) - Enterprise Management Including Application & Database Management. As with Nuance, a search for "open source" on the company website results in 0 hits. However, BMC has a developer network with various, small-scale open source projects. Grade - D.

6. Intuit ($9B) - Personal Finance, Small Business and Tax Software. Intuit does not appear to have any significant involvement in open source and this probably is not the type of software that has attracted a developer community to create open source alternatives. Grade - F.

5. CA ($12.3B) - IT Management Software. To my surprise, this 30+ year old company has embraced open source in a significant way. For example, CA has supported the open source industry's patent pledge for several of its patents. Grade - C.

4. Adobe Systems ($21.6B) - Creative, Knowledge Worker and Enterprise Software Applications. Facing the commoditization of it biggest revenue generating applications (Photoshop and Acrobat), Adobe has taken the initial steps it needs to diversify its business into open source in a significant way. Grade - C+.

3. SAP. ($60.1B) - Business Operations. SAP has dabbled in the open source world, partnering with MySQL on database technology. Overall, however, SAP hasn't made many significant contributions to the open source community. Grade - D.

2. Oracle ($111B). Database, Middleware and Enterprise Management. Oracle might be described as the Jeckyll and Hyde of open source. While it distributes several open source applications (such as Sleepycat and Innobase), it also actively challenges other open source providers (such as with Unbreakable Linux) and would likely acquire competing open source companies to eliminate a business model that threatens its own. This duality makes it hard to settle on a grade. Grade - C-.

... drum roll ...

1. Microsoft ($277B). It's no surprise that Microsoft is in the number one spot (even on Letterman the #1 is always anticlimactic). In spite of making substantial contributions of code as open source, Microsoft is the big bad wolf of open source for good reason... among other things, it has a very proprietary stance on patent licensing for open source projects. Grade - D.

Some other companies that didn't make the list due to technicalities are:

• Google ($178B) - would be the clear number 2 if it were in the "Software Application" category. Google would receive a B for OS Effort (knocked down from A because of its deceptively not open Android platform and other calculating open source strategies).
• Sun Microsystems ($10.2) - would be at number 6 if it were in the "Software Application" category (though its software business is probably valued at closer to $4B, which would drop it a few spots on the list). Sun would definitely receive an A for OS Effort as the largest open source software provider.
• Still other companies like HP and IBM have been long-time contributors to the open source movement, but are not reflected here.

I find it very interesting to note that of these top 10, only 1 got a grade better than C. In addition, one estimate of the total value of the open source industry ($60B) would place the entire industry at only number 3 on the list (though without an objective market cap value, it's hard to draw many conclusions from this).

On the other hand, if we add Sun and Google (two of the top open source contributors) we come closer to a critical mass of open source presence on the list, and lest we forget that numerous open source companies with no market cap at all (because they aren't listed on a stock index) are providing strong, competitive alternatives to the software and solutions provided by the companies on the list.

What can we conclude from all this? First and foremost, we can safely conclude that I am not a mathematician, statistician, or financial analyst, as evidenced by my loose use of numbers and grading to make my point.

More important, even a pessimist would have to say that the presence of a company like Red Hat on the list means open source is making significant inroads into the traditional software industry. The amount of innovation and competition presented by companies not yet public or too small to make the list yet indicates that the trend is strongly pointing towards greater adoption of open source. It might be only a handful of years before all of the top 10 companies on this list receive A's and B's.