When “open source” is thrown into a discussion, it tends to be translated from “culture” to “software.” The definition that’s most often heard is that it is the mostly unrestricted sharing of code and programs with developers to use the code for purposes that benefit both the code owner and the developer. Typically, whatever restrictions exist are under a Creative Commons license, which allows them to modify the code for, depending on which of the
Table: SaaS versus On-Premise Selection
permutations you use, commercial or noncommercial purposes. When the technology is shared in this way, it can expose bugs, it can speed adoption, and it promotes interoperability—all of which has value for the company owning the code. For the developer, it gives them a means to create an asset for themselves. What makes this so valuable is that not only can they create an asset, but there are distribution networks available—either through an independent developer’s community or through a marketplace that the code owners provide, such as Sugar-Forge from SugarCRM or AppExchange from salesforce.com or Appstore from Apple for the iPhone. By the way, SugarForge is easily the best named of the bunch.
I’m including open source in this particular chapter because, frankly, a lot of people confuse it with either “on-demand” or “free.” It isn’t either, though it can involve both. To clarify, it overlaps all computing delivery models, and all enterprise software has open source versions ranging from SugarCRM in the world that we’re concerned with to Compiere in ERP to Drupal in social software platforms. Its scope is staggering, its range wide. But it isn’t on-demand, cloud computing, or on-premise—and any comparison to them is wrong.
Open source means considerably more than just providing code and tools and distribution channels to developers. So . . .
What Is It?
Open source isn’t four things and is three things. It is not fundamentally a new application architecture. It’s not a new delivery model. It’s not the source of free software-though a lot of open source software is free. It’s not aimed at proprietary nonstandards based code or services.
It is a license and a culture. It’s also freely available source code for applications that can be tweaked, overhauled, or created if it’s an open source platform, like Drupal. However, the ability to do that doesn’t give you the freedom to use the code in any way you want. It just allows you to use it in ways that the intellectual property owner allows you to, meaning you have a license to lease the code-and that license carries restrictions.
The license approval body is called the Open Source Initiative (OSI) (www.opensource.org) and they have some 70 versions of licenses that can be used. In CRM, according to SugarCRM’s analyst relations director, Martin Schneider, they use an unmodified version of a General Public License (GPL) version 3. I don’t want to bore you with the entirety of the license—being open source doesn’t make it any less boring. But in a nutshell, the license allows you to convey a verbatim or modified (with note that it has been modified) version of a source code. If you modify the code, it must be made available to the relevant community. What makes this interesting is that open source code components are frequently used by historically proprietary vendors who aren’t conveying the modified code to anyone. What will make this really interesting is that Gartner Group, in September 2008, projected that by 2011, 80 percent of commercial software will be using some form of open source code components in their applications—creating a potentially very dicey situation. The licensing of open source has widely varying conditions. For example, there are different versions of the open source Creative Commons licenses for music, which you will hear a little bit more of in the electronic chapter “Honestly, I Want This Chapter to Be on Privacy...”. Depending on the license chosen, they allow a musical piece under a license to be shared with attribution by someone other than the artist according to the following combinations:
Take any combination above and mix and match and there is a license or sublicense to meet the artist’s requirements. You must be very careful which one is chosen or it can bite you in the . . . you know. The aforementioned electronic chapter will tell you quite a story about it.
It also means something that has been antithetical to most companies for the life of those companies—it means shared intellectual property (IP).
Shared IP: Proctor and Gamble Gamble with Sharing Secrets
Proctor and Gamble (P&G) are not horribly beholden to the past of “everything a trade secret and all exposure a lawsuit.”Their patents are exposed when it makes sense to P&G to share them. Their Connect and Develop program (www.pgconnecanddevelop.com) is designed to involve anyone who holds their own intellectual property (e.g., a patent) and P&G in a joint venture to develop technologies and products that can be brought to market.
It stems from the desire that A.G.Lafley, the visionary P&G CEO, had to find 50 percent of all its ideas and technologies from outside the company by 2010. They reached 35 percent in 2008, with their eyes on the prize of that 50 percent.
Connect and Develop is unique in many ways. It provides an opportunity for people who in the past would have no chance at penetrating the inner sanctum of a company like Proctor and Gamble. The specific projects that P&G has on the table are identified, with some real exposure of the patents that are associated with the opportunities. For example, a quick look at the P&G Connect and Develop website brings up this opportunity posted as of February 2008:
We are looking for an auto-foaming technology that is more cost and space effective to incorporate in a powder laundry detergent.
Description of the Need:
A technology that produces self-fizzing on contact with water to enhance foam in a powder laundry detergent for hand wash geographies. The product must dissolve without agitation and quickly deliver rich/creamy foam, yet rinse easily. The cost of the foaming system should be less than 1/2 cent per use.
It then goes on to list what they are specifically looking for and what they aren’t looking for. Why is this important? Hey, how could selffizzing auto-foam not be important? Besides that, though, P&G is publicly listing something that in the past would function as a part of a product road map and would be a closely guarded secret, punishable by death by unwashed hands. Now it is being publicly exposed with collaboration openly invited and any patents or other intellectual property that P&G deems important to provide, they do.
But it even goes further when it comes to the open IP that we’re talking about and the cultural environment that open source and open IP propagates. Heed the words of Jeff LeRoy, part of the External Business Development (EBD) group at P&G, in a podcast he did on the P&G home site:
If we think your idea, your product, your intellectual property, isn’t necessarily a good fit for us, but it is for somebody else who we have a relationship with, we’ll forward you on to those people, even if it’s another company or a competitor, because we want to be known as the partner of choice, and we want you to call us back next time.
This is an ideal example of how open source isn’t just a developer’s dream world but a true culture shift that makes collaboration a much more viable option between companies and customers.
Open Source Culture
That cultural difference is the antithesis of a company trying to protect nonstandards-based proprietary source code. Source code or IP is not to be protected by the full force of the law. It is to be distributed to those who want to use it in a way that makes sense to the owner. They continue to own the source code. They choose to provide it and allow its alteration as long as it’s redistributed democratically.
What makes open source an option for CRM buyers is that it is often a bit cheaper, though don’t assume it has a noncommercial purpose. SugarCRM, the paradigm open source CRM application and platform, has an incredibly simple table of prices. Table shows you their options as of mid-2009.
Table: Open Source CRM Leader SugarCRM Delivery Options
What you may notice is that they have three ways of delivering the applications: SaaS, on-premise, and a turnkey solution through an Internet appliance. In other words, open source does not compete with SaaS, or on-premise, or the cloud—it uses them.
It also costs money.
The benefit of using an open source CRM application is that pricing is favorable to the customer. For example, SugarCRM’s pricing in this new model is inexpensive whether you use the on-premise or ondemand version. Another benefit is that there is usually a wide array of add-ins, extensions, and additional applications that go with the original product because of the robust developers’ communities that are attached to most open source applications. For example, Sugar-CRM has over 18, 000 registered developers, out of a community of nearly 100, 000 that write additions to SugarCRM and at times even write entirely new applications or vertical versions of CRM. There is a product called Carousel CRM that actually competes with Sugar-CRM that was written on the Sugar CRM platform.
But this creates some risks too. How do you achieve a measure of quality control over 18, 000 developers who are having their way with your code? The licenses don’t restrict what modifications are made, they restrict or constrain the distribution of the modified code. So the variety and quality of the modified offerings are endless.
SugarCRM’s work around is to have paid employees developing the core code for the SugarCRM platform and products, while the developers’ community does ancillary work.
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