Content Log

Impressions of Enterprise 2.0 in Boston

Boston at five in the morning before I had to take off on Friday.

This past week, I was on a panel at Enterprise 2.0 in Boston with Bob Bickel of Ringside Networks and Jeff Whatcott of Acquia, the commercializer of Drupal. The topic was open source options for delivering an Enterprise 2.0 Experience. Both Bob and Jeff are excellent speakers and bring a wealth of experience behind new companies. I think that Kathleen Reidy at the 451 Group did a very good job of covering the panel, so I will move on to my impressions of the conference.

On the panel, we spent much more time talking about open source and less about Enterprise 2.0. However, this doesn't mean that there was a lot of clarity on the meaning of the term Enterprise 2.0 at the conference. Although Web 2.0 had no less than Tim O'Reilly and John Battelle to define what that term means (barely), Enterprise 2.0 has no such authority. Consensus says that it is just Web 2.0 for the enterprise. However, researching the concept a couple of years ago, E2.0 is about taking the social aspects of Web 2.0, collaboration, social networks, user contribution, wisdom of crowds and social tagging and voting and applying it to information, documents and content in the enterprise. There are no fixed patterns for how to do this, although popular Web 2.0 sites, such as Facebook, Google Maps, Digg, YouTube and Wikipedia, provide at least paradigms for how these can be accomplished in the enterprise. It is very difficult to describe Enterprise 2.0 without drawing analogies to these web properties.

On Wikipedia, the topic "Enterprise 2.0" redirects to Enterprise Social Software. In August 2007, a "Ruud Koot" permanently redirected it from Enterprise 2.0.  The last direct version of an Enterprise 2.0 article in Wikipedia extolls an Alan Wurms as the person who apparently coined the term in 2001. That is the power of Wikipedia, it can get rid of the rubbish. Most people's problem with the term is that it does not describe what it does and it sounds like it is just riding on the tailcoat of the Web 2.0 phenomenon. Is this really a new version of the Enterprise? I sat in a session with Carl Frappaolo where he equated Enterprise 2.0 with the evolution of Knowledge Management, but made the point that enterprises have not fundamentally changed as a result.

Some people believe that Enterprise 2.0, like Web 2.0, must be delivered as a whole hosted platform on the internet in order to be Enterprise 2.0. For some people this is absolutely true, but a majority still look to keep this information under enterprise control for bandwidth and security reasons. The majority of vendors in the exhibit area provided Software as a Service solutions. Most likely they used open source in creating those solutions.

I apparently missed the highlight of the show, which actually occurred on Monday before the opening. This was a shoot out between Microsoft SharePoint and IBM's counter to SharePoint, Connections. As an IBM product manager at the IBM booth said, "We don't fuck up demos." Everyone seemed to agree with him. Poor Lawrence Liu of Microsoft was not so lucky. The Microsoft demo did not have the business process coherence in which IBM is very well versed. There was a lot of hand-waving about how various Enterprise 2.0 features were supplied by partners. The performance issues that Lawrence faced may very well be related to the terrible internet connectivity provided by the Westin Hotel. Imagine an Enterprise 2.0 conference where no one is connected. Both companies are talking more about Social Software, Social Computing and Social Networking more than Enterprise 2.0, so my feeling is that this emerging market will be named more along those lines rather than E2.0.

Peter Fields of Wachovia

There were three customer presentations on their usage of Enterprise 2.0 and these present probably the best understanding of what these collections of technologies are, what they are trying to accomplish and what market is forming as a result. Despite the fact that he was using Microsoft SharePoint, I really liked the presentation from Peter Fields of Wachovia. Peter seems to think about the business problems and technology solutions the way I do. (Or probably the other way around.) He described the need to empower employees as a way of tapping into the intuitive sense of employees and he is the only other person I have ever seen that has uses Myers-Briggs to describe this paradigm shift. In a session just before, I got shot down in flames for daring to suggest that the change in enterprise software is the result of shifting demographics and a new, incoming generation of worker - the Millennials. Here Peter was backing it up with data that suggests that in less that five years, this generation will move from 25% of the working population of the US to 41% of the working population. He discussed an imperative that I had not really considered as well, which is that the baby boomers are retiring and this will represent the single largest loss of implicit knowledge in industrial society. Enterprises MUST facilitate capturing what the baby boomers know now and lower the barriers dramatically toward capturing that information.

Simon Revell from Pfizer

Peter is roughly my age, but Simon Revell from Pfizer, who looks a lot younger, presented a view of what the new generation wants - seemingly both Generation X and Generation Y. Pfizer has created a couple of sets of slides describing life in a networked world. Pfizer does use the 2.0 word and even describes a "Doctor 2.0" as a female researcher who also seems to spend a lot of time on Facebook. But rather than trivializing what that means, Simon presented a set of tools that Pfizer is using (open source by the way) that allow researchers to collaborate. Pfizerpedia is a mediawiki implementation modeled on Wikipedia and used as a single instance. Its primary purpose is to capture best practice in an informal way, which Pfizer codifies and controls after the process is discovered or developed. The result is actually a knowledge base of information that can be used for many other purposes. My sense has been that wikis that are single, highly interconnected instances rather than many team or project wikis. Bob talks about one wiki, Peter is hoping for 10,000 wikis. My take is that we need two words for what is now described as a wiki.

I wish I could have seen more the conference, although many of the break out sessions didn't add a lot. The subject of wikis and blogs have been covered better at Web 2.0 conferences. Some of the sessions on community didn't really say anything at all. Neither did a session by Mark Woollen from Oracle CRM. Mark is a good speaker and there was some good content at the end. Too bad that the beginning didn't say much except that social networking will probably be important in the future.

The direction that Oracle's Mark Woollen's presentation took

Enterprise 2.0 is not just about wikis, blogs and forums. These do not make communities. A whole bunch of the vendors in exhibit area are likely to be gone in a couple of years if not sooner. Open source, although played down in this conference, will likely be one, if not the, major driver of this new market. Companies are actually using this and it is those that hope to attract and retain not just a younger generation of employee, but also customer. The smart ones are also recognizing that they need this stuff to make sure that critical knowledge is not retired when their baby boomer employees have.

Doing Davos Does Not Help Blogging

Me in a Davos collaboration session on building new resilience into business

Where I last left you, I was on my way to Davos and the World Economic Forum. I tried twittering to keep up with what was going on, but it's really tricky spending any time writing when you are at an event like that. In the central lobby area, there are only a few seats and I would always see Justin Fox, correspondent for Time Magazine, occupying some of the few sofas along with his wife and other "Young Global Pioneers" of the World Economic Forum. I asked Justin if he had been to any of the sessions, which he said he had, but it seemed like he was always blogging. It was good that he was there though. He had a Mac and I could borrow a recharge every once in a while.

A giant YouTuber addressing 1000 people in the WEF plenary hall, while the President of Switzerland sitting alone below him is probably trying to figure out what is going on.

Chad Hurley, founder of YouTube, apologizing for mistakenly showing the previously shown video for the video greetings from George Bush. Sorry George! (BTW, I doubt you will ever see George Bush at Davos. Alliances and Internationalism are not really his thing.)

That's the problem when there is so much stuff going on. You need to sit down and digest a huge amount of information, impressions, emotions and sheer overwhelmingness. The year before, I wrote one blog and missed so much, so I thought I should really just experience this and then write it down. Now I won't be able to get on with writing my blog properly until I do. So forgive this somewhat rambling post.

Robert Scoble interviewing Vinod Khosla. Scoble doesn't have a problem keeping up his blog.

About a week after Davos, a friend of mine asked me who I met this year at Davos. Ironically, the only person I could think of was Emma Thompson and a bunch of CEOs. So, I start where I finished last time. On the plane back from Zurich to London, I saw Emma waiting for her luggage and I just had to say hello. I asked her how she like Davos. Her response was, "Wasn't that amazing! I must write it down!" At the time, I thought yeah, me too and I will get to it on Monday. Five months later...

Loic LeMeur interviews Emma Thompson

( If you can't see the video, try: http://www.youtube.com/watch?v=LIHnqEhAAA0 )

In reality, I met a lot more people. I met Tony Blair and Bono, which I thought was pretty cool. I tried to get up early(ish) and at 8am in the morning one day I just saw Blair walking down a white, glistening snow covered street with only a couple of people in tow. I just reached out as I walked in the opposite direction and said "Hello Mr. Blair." With a politician's instinct, he grinned, said hello, shook my hand and moved on. Bono came tumbling out of some party the night before along with Queen Raina of Jordan and her entourage from London, and few other celebrities. I was in an WEF IT Governors meeting where guys like Bill Gates and Michael Dell were supposed to be, but were probably at the same party. Being at Davos is part of being in elevated circles, but even the elevated circles have their upper levels.

Passing Henry Kissinger in the hall

Compared to the previous year, the US political events were far less overwhelming given the current presidential elections, but the global politics portions was at least as interesting. Hanging around after Condoleeza Rice's speech, I saw Henry Kissinger and Rupert Murdoch also hanging around me along with Hamid Karzai, president of Afghanistan. I doubt they recognized me though. I was invited to a breakfast session with Purvez Musharraf, who was much more articulate and persuasive than I expected. I got some flack from some people of even attending, but I sat next to Jasmine Whitbread, CEO of Save the Children UK, who I figured if she was interested in different opinions of what was going, why could I be. Mark Zuckerberg, founder of Facebook, and the blogger Robert Scoble were there as well and you can read Scoble's account of what happened. I saw Gordon Brown in a couple of sessions, but at the time I was no where near as furious with him then as I am now.

Hamid Karzai in a rush. (So I just didn't have good camera with me. :-( )

Pervez Musharraf talking over a croissant at breakfast

Technology definitely took a back seat to Social Enterprise this year. Although there were still luminaries, some of which I got introduced to thanks to Brian Behlendorf (man that guy networks well), it was guys like Nobel prize winner Muhammad Yunus that took center stage. Jimmy Wales, founder of Wikipedia, scoffed at being called legendary after being introduced after Muhammad Yunus, the man who created Microfinance. Unlike last year where Web 2.0 was a major theme, people who are trying to change the lives of people using the forces of capitalism and entrepreneurialism rightly were given the spotlight. Most of them you would never heard of, but they seem to really be making a difference in the developing world. One you may have heard of is Nicholas Negroponte, who I sat next to at a lunch after he mistakenly tried to steal mine. We have since exchanged emails about how Alfresco and open source might be able to help the One Laptop Per Child initiative. If open source can help serve up content to all those OLPC systems, so much the better.

Nicholas Negroponte with blogger Jeff Jarvis taking notes. Sorry this is a scary picture, but I was sitting right next to the guy when he was speaking.

Most people at Davos are business people. Emma Thompson apparently described the crowd on BBC Radio 4 as a bunch of gray, middle aged businessmen in suits. (Well excuse me Emma!) There were in all the sessions and the vast majority of them are extremely nice and sociable. It was pretty cool hanging out with the Accel guys, Joe Schoendorf and Paul Jacobs, CEO of Qualcomm, drinking 50 year old Bordeaux wine. I shared a taxi with George Soros, who stole a place from my friend Magid Abraham, CEO of ComScore. Soros then had the misfortune of me plugging at him on the future of the dollar and pound. Eventually, he asked me what I did and I explained about Alfresco. George then said, "I *like* open source." So here's a scoop for you, George Soros is bearish on the US economy, the dollar, the pound and George Bush and bullish on China, India, and Open Source.

Nobel Prize Winner, Muhammad Yunus

I attended a panel on Strategy in a Networked World with Sam DiPiazza, CEO of PWC, Chris Conde of Sungard, Marc Benioff from Salesforce, Michael Porter, business professor at the Harvard Business School, and moderated by Tom Stewart, editor of the Harvard Business Review. I have met all of them and they are all nice, grey, middle aged and in suits, although Benioff stands out as being different. He is a bit younger, dresses more informally and is less likely to listen to what you are saying. I was in a collaboration session with him, business people from Cisco, HP, Sun and social entrepreneurs at the front line bringing in water, power and connectivity. Chris Gopalakrishan, COO of Infosys, actually knows a lot more about the 3rd world than most. Yet Mark was trying to tell him and others that the solution to poverty, disease and privation is a Web 2.0 center in villages running Salesforce.com.

Marc Benioff telling us how its gonna be

The dinners and parties continued to be the most impressive and fun part of Davos. The Accel party is definitely one of the highlights. One moment at this year's party that I really liked was being able to introduce Michael Porter to Tim O'Reilly. Tim definitely knew who Michael Porter was, but Michael had no idea that Tim was the one who started a lot of all this Web 2.0 stuff. If Tim O'Reilly came away impressed, this event must be something else. Also, I am hanging around talking to people waiting to chat with Larry Page and find I am talking to the CEO of Mattel. Good thing I didn't ask him about toys from China. One of the Accel guys introduced me to the video blogger Loic LeMeur and I said, "I know you! You're famous." Immediately afterwards is the Google party with absolutely everyone in there. I attended a great "Eat Local" dinner hosted by Chez Panisse owner, Alice Waters, and the theater director Peter Sellars. The food was absolutely fabulous and it was really nice to meet Alice since I have enjoyed her food since my days in Berkeley, although Sergey Brin got a lot more attention. The Nerd's Dinner was also fascinating with so many famous tech people, I couldn't possibly list them here. That I have to blog separately.

I tried to get a picture of Michael Porter when he wasn't moving his hands. I failed. He is very animated.

In the end though, it is the people who make you think that have the most lasting impression. As always, it is great pleasure to hang around Geoffrey Moore, from whom I always learn something. I was also very pleased to meet Don Tapscott, author of Wikinomics, and his wife. On the last night, I hung out with he and his wife and discovered he is a great jazz pianist. However, I learned about his next book about the Millennial generation joining the work force. The futurist Paul Saffo, the host of the Nerd's Dinner makes me feel like a real laggard. I am still in awe of Tim O'Reilly. Although I don't agree with some of what Tom Friedman writes, I still respect his perspective, which as influential when we started Alfresco, and I got to meet him this time and learn about his next book about Green Technology.

Don Tapscott, Author of Wikinomics

Finally, Bill Gates got me thinking a lot. His speech on what he is doing next was well worth attending. Bill's thesis is that if we can apply the principles of capitalism to solving the world's problems, we can eradicate hunger, poverty, disease, lack of power and climate change. Market and financial incentives alone are insufficient. We should all acting based upon self-interest and incentivized to work in that self-interest. Governments can help with tax incentives, but giving recognition to those companies and individuals are potentially more powerful. Companies should also be incentivized not to give money, but talent, which in turn provides recognition of the individual and organization making a difference. This recognition can be its own market-based reward since it will benefit the company in the competitive marketplace. This approach can be used to provide not just manpower, but solutions to accessibility of information, medicine and healthcare.

Bill Gates talking about what he is planning next.

Perhaps Google thought of this all along, but it seems like Bill has a point. As much as that pains me to say, clearly the programs and techniques that we have used in the past have not worked and we need to try something else. Maybe its time to try Bill's plan. I was challenged by one of the more liberal participants to not even think that. He said, "It's easy for him to say that. He's a billionaire. He made his money with blood money stealing from the poor children of the world." That's a bit extreme and I was just as culpable in this guy's eyes for even suggesting it, but I think it's worth exploring.

Mitch Kapoor

If you have gotten this far, well done. Now that I have this one out of the way, I can concentrate on blogging properly hopefully.

Sir Martin Sorrell, Chief of WPP, asking everyone to calm down.

Scaling Out Like Technorati

My fellow World Economic Forum Technology Pioneer, David Sifry, the founder of Technorati, was also in Dalian, China for the “Meeting of New Champions” or “Summer Davos” as the Chinese like to call it. During Davos in January, I had the great misfortune of pitching Alfresco against Technorati in a competition between tech pioneer companies. As fantastically well as Alfresco is doing, Technorati has the temerity to compete against Google in blog search and win.

I got the chance to talk to Dave during the conference and ask him some questions on the technology and architecture behind Technorati, the internet blog search site. I thought that someone who could take ordinary computer components and build a huge internet architecture could possibly teach something to people running enterprise architectures that are puny in comparison.

Technorati is a web site that tracks blogs, pictures and any user generated content and allows you to search those sites about what people are thinking, seeing and hearing. When a new or urgent situation breaks out, you can do worse than to search Technorati for immediate reaction. Every day, every hour, every second, Technorati is indexing over 10 million blogs with over 10 billion objects. Technorati’s user base is doubling every six months and quick and accurate response is critical for retaining those users.

David Sifry, Founder and Chairman of Technorati

I asked Dave about his architecture and what applicability their might be for enterprise architectures.

John Newton: In building Technorati, what were some of the issues that you had in architecting your systems.

David Sifry: I was looking at just temporal information. I had no idea how big it could get. When I looked at the architecture, instead of architecting it right, I architected it for right now. I had no big budget and I didn’t want to wait six months to build it. Also, I had no idea what the killer app would be.

I focused on data flexibility. At the time, that meant putting everything into a relational database. That was okay while the size of the indexes is less than RAM and about a million blocks of data. That was okay while there were less than 20 million blogs.

The next generation took advantage of data parallelism. That meant upon update send a signal to all the other systems. We expanded the data over several “shards” [segments of data partitioned on different databases on separate machines].

What was surprising was that we were writing as much data as we were reading. At this point Technorati was as big as some of the biggest OLTP. Even so, maintaining data integrity was important, because you would want the link count [count of how many other blogs point to a particular URL] to be out of sync. This put real pressure on the system. At the same time, we realized that time was more important dimension than URL. People didn’t want to sort or search on URL, they wanted to search on time. [i.e. what are the latest blogs on a particular subject?]

By this point, we understood the application more and more. The app [Technorati] is about real time access. You need to be able to count on finding latest information on a subject. That’s when we built the third architecture. Scaling was well understood and we build the shards on time rather than on URLs. Instead of putting data into a DBMS, we put it into special purpose databases. It was more of a bus-based architecture. Each database could be scalable and grow as big as we needed.

JN: The notion of shards - did you call it that at the time? I have been looking into shards and I was only aware of or heard of them for about the last year.

DS: Back in 2002 when we were pitching this to VCs, I at least explained the theory. All I just thought through the problem carefully. Doing it this way, we could add hundreds of systems, lots of cheap CPUs, RAM and disks. It provides inherent parallelism. I can’t believe that I was the first one to think this up.

JN: How big does this architecture scale?

DS: We are loading one terabyte a day into Technorati. That’s 100 million blogs or about 10 billion objects. A lot of is new types of tagged data. There are about a half billion videos and photos.

With all that data, you have to think about what do you throw away?  We can’t really delete anything, because we are potentially losing an asset. We don’t delete anything. So we take data out of the spin cycle. [Transitory data used in preparation.] We take the long-term data and put it into low latency storage.

When data is doubling in size every six months, that means that only one quarter is a year old. We don’t need to worry old data.

JN: How do you deal with large number of users with very large data sets?

DS: Any off the shelf tools falls over. There is a lot of interesting analysis on old data, but no off the shelf tools can handle that much data. It’s only just now that some tools can handle it.

JN: What are those tools?

DS: One is Green Plum by a bunch of O’Reilly guys. If you use ordinary data warehouse tools, they would just scream and shout.

JN: Actually what I was originally referring to was the fact that you are showing lots of data that are not users used to enterprise information management tools. How do you present this information to consumer-level users? How do you deal with the user interface and visualization of all this data?

DS: Gotcha. It depends on what the user wants to get out of Technorati. If the user wants search results, then we give it to them. Sometimes they want to browse or discover information. We have spent a lot of time on visual design. Then we give them lots of bright, shiny things for them to click on.  Things like metadata, video or other links.

We have used enterprise class web tools to analyze what users are doing? We look at the click stream and see what is successful or not. That helps to make the information contextual.

One of the big mistakes that we made is to not do this [buy click stream analysis tools] sooner. It was only $80K. Up to that point it was so much trial and error. I’m glad we finally did it. Now we can see how much time a user spends on a feature. We can see page views, goals per visitor.

JN: So what do you measure on Technorati?

DS: Measuring a web site is like forecasting the weather. Yesterday it’s sunny and today it is cloudy. Why is it cloudy?  Sometimes you have no idea. Sometimes you realize that that a change in barometric pressure has a lot to do with it.

We look at the number of newbies, number of reports, session lengths and then measure them against prior periods. It’s not always consistent.

I had never built a B2C site before. I just focused on me, on what I wanted. That worked well for a while when I was the target audience. But we have to build for a broader audience.

JN: At Alfresco, we measure conversions. Are you measuring things like performance? Does that affect retention of users?

DS: Of course, but if the system is falling down, then even performance doesn’t matter. So I don’t get too stressed out about it.

JN: When we met at Davos you wanted to move Technorati to be the Internet Now! Is that still the case?

DS: Everything is shifting. I wanted it to be a site that everyone is able to use. We forgot about the core users that just wanted to find out about blogs and any real time information. In an attempt to jump the chasm, we chased after 100 million users and tried to be everything to everyone. Now we try to make blogs and user driven content available for those looking for that.

Also performance is improved significantly. Now I notice how slow other sites are. This is a total tribute to the engineering team. Everything is easier and faster.

Pretty soon we will have a whole lot of stuff that we have been working for a year.

JN: Can you say what it is?

DS: I don’t pre-announce.

JN: What does the Technorati brand stand for today?

DS: Good question. What’s popping up now on the internet, especially user generated content? It’s about users tagging user generated content and finding it.

JN: Who are your competitors?

DS: I probably sound like the typical entrepreneur, but nobody really seriously. Google provides blog search, but other than that nobody really. Other people are trying to identify and tag information like Digg and del.icio.us, but they aren’t really competition.

JN: What do you want Technorati to be in two years time? Five years would be ridiculous.

DS: I would like Technorati to be a profitable business that is strongly differentiated. It will be the place that you would go for mobile, RSS or push information. For all that you would come to Technorati.

Jimmy Wales and Enterprise Wikis

At the Summer Davos in Dalian, China, I was able to speak to Jimmy Wales, the founder of Wikipedia, about wikis in the enterprise. Wikipedia has become not only the world’s most popular wiki, but the ninth most popular web site in the world. Jimmy is here as a Young Global Leader with others that are defining where the world is going in the future.

Although wikis have become popular for people to collaborate on alternatives to encyclopedias, wikis can be used as tools to collaborate in the enterprise. Wikis are now being used to define product specifications, user documentation, policies and procedures. In addition, teams are using wikis to share ideas, discuss issues and define strategy. MediaWiki is the engine beneath Wikipedia and thus developed by the Wikipedia Foundation. It is available for anyone to use in their enterprise since it open source, so, I figured that Jimmy was a good person to ask about wikis in the enterprise.

Jimmy Wales, Founder of Wikipedia

John Newton: I have been interested in wikis in the enterprise for a while. Do you have any general comments on how they can be used?

Jimmy Wales: Wikis have been used to collaborate on all sorts of documents. They have even been used to manage schedules. I have seen people abandon [Microsoft] Outlook and schedule in a wiki as a better alternative.

The big difference is a design change in process. People don’t necessarily want to use a CMS. You need to drop the a priori assumptions on how you do workflow. The old notions of workflow are too cumbersome. Wikis provide enormous flexibility in how users can work together.

JN: Is this a replacement for workflow or a new way to do workflow?

JW: It’s more an ad hoc workflow by the users. In a wiki, users decide who can contribute to the group and create their own ad hoc workflows. It is a completely different security model. With the old model, you can define that a certain group can edit some content and define who owns the content.

With wikis, it is a completely different model that is more open. The implications of this are that you have accountability versus a gate keeper. Who is allowed to do what is socially enforced.

For instance, you can have an HR policy that says that John can update the HR policy, but the company policy is that regular workers can’t update that policy. But if you can have employees fix spelling errors or explain obscure paragraphs, then it would make that policy better. But that doesn’t reflect current policy, even though what is important is who does what to that policy and what matters is who is accountable.

[We didn’t discuss this, but a wiki allows anyone to revert changes back to their original state, so any malicious damage can be undone. Likewise an administrator of a page can prevent individuals from updating the page or anything on a site. That is the source of accountability.]

JN: How many organizations or enterprises are using MediaWiki in the enterprise?

JW: I have no idea. I have no clue on the quantity or number of systems used in the enterprise. We don’t track stuff like that.

But MediaWiki has its strengths and weaknesses in the enterprise. Its strengths are that it is the same software that runs the 9th largest website on the internet and can be used by anyone. I have a copy of MediaWiki on my laptop and it is the same software, except for all the caching stuff. It is highly scalable. You know that it can go from department to enterprise-wide to internet.

Its disadvantages are that it doesn’t integrate with corporate logins. There is no Outlook integration. I don’t really care about that stuff.

[At this point, Mozilla COO John Lilly, who happened to be sitting at the same table, interjected. “Yeah, no open source software does. But we use MediaWiki a lot. We have tons of documentation in it.”]

JW: I saw an implementation [of an enterprise wiki] at Best Buy. I was invited to Best Buy on the day they launched their wiki. They were using FlexWiki from Microsoft. That has got to be the worst wiki on the planet. It’s open source, but it was awful.

JN: Then why did they use it?

JW: The classic reason. Microsoft asked them to use it. It integrated with Microsoft logins, accounting and stuff like that. I haven’t followed FlexWiki since then, but I haven’t heard anything about it either.

JN: I believe that Microsoft’s wiki strategy now is to use SharePoint as the platform, for a lack of a better term, for collaboration. I have seen a number of situations where enterprises are comparing wikis and SharePoint. Are you seeing [your new company] Wikia positioned against SharePoint?

JW: Wikia is really focused on large, public-facing web sites. We don’t really have the consulting available to make it work in the enterprise. I have never run into SharePoint. I have never seen it. In fact, I don’t really know anything about SharePoint, only anecdotes.

JN: Most people reading this have probably never heard of Wikia, can you define it briefly?

JW: Wikipedia is about building out the reference library. Wikia is about building out everything else like magazines, novels, books. It is not neutral [like Wikipedia’s Neutral Point of View requirement]. It has humor, fun, it’s political.  It’s every publication you would want to build.

It’s also about Search. Most important is that it is open source and open algorithms. We use [Apache projects] Lucene and Nutch. Search so far has been about good enough search and good quality search has become a commodity. There is still an opportunity to build around brand and distribution.

JN: Aren’t you worried that would dilute the Wikia brand by addressing both the wiki and search markets?

JW: Not really, because my personal brand is about mass participation, open source, transparency and editorial content.

JN: I have heard Twiki being used in enterprises as much as MediaWiki. Any idea which is being used more often?

JW: I don’t know Twiki that well. I am really more familiar with the mass market, consumer market. I would think that MediaWiki is used more often.

[John Lilly interjects: “No, I think that Twiki is being used more often.”]

JN: All this MediaWiki stuff, Facebook, YouTube is being lumped into the same bucket as part of Web 2.0. Do you think they are related?

JW: Yeah, it is over-hyped. I think it is about social networking and social connections.

JN: I have theory that Web 2.0 is about the right brain - creativity, faces, connections, music, and artistic expression. What do you think?

JW: Maybe so. Maybe so.

JN: What about data? Dan Bricklin’s WikiCalc is about managing data and spread sheets? What do think about WikiCalc? Do you think there is any applicability to Wikipedia?

JW: I love the concept and there is a really cool guy working on it. It’s a great way to extend collaboration the same way that Google Docs is. I am on the board of SocialText that is backing WikiCalc.

JN: The other day in one of the [Dalian] sessions, you talked about the fact that users put data into tables even though you provided mechanisms [categories] to avoid that. Do you think that shows that people want managing this type of tabular information in a wiki?

JW: Yeah. Tables have been useful.

Summer Davos in Dalian China

Last week I was in Dalian, China for the World Economic Forum Inaugural Meeting of the New Champions. That’s a mouthful, so the Chinese simply called it the “Summer Davos”. It makes sense as this feels very much like Davos only a bit smaller and slightly more relaxed and less intimidating. It is still difficult to be really relaxed with some many diverse bright minds, but the scope of topics was more manageable the number of sessions made it easier to choose. There were still the same types of plenaries, panels, board room discussions and collaborative workshops. The focus was global, but the star of the show was China as the world's manufacturer, major outsource destination, next consumer society, and next world economic power.

Wen Jiabao, Premier of the People's Republic of China, speaking in Dalian. Photo courtesy of the World Economic Forum by Natalie Behring.

Given where we were, the Chinese government made a concerted effort to put on a really good show. Dalian is a city that most of the participants that I spoke to, including myself, had never heard of before this conference was organized. Few of us expected a large city with tall, new buildings, clean streets and significant infrastructure. While I expect some small, seaside fishing town, what I found was a major industrial port with tourist attractions and resembling a Chinese San Diego. Everything was big, clean and shiny. What I have heard is that Dalian was the point of Japanese invasion during World War II and the Sino-Japanese War of 1895. For good or ill, there has been a long history of connections to Japan that has encouraged investment in this industrial capacity and outsourcing. Much of the city looks like it has been built in the last decade. Companies such as Intel, HP and British Telecom have very large development operations there.

Due to the location, the spectacular growth and potential power of China, 1500 attendees came to the World Economic Forum event to learn more about China. The majority of the agenda of the conference focused on the role that China and the other “New Champions”, India, Russia and Brazil or the so called BRIC countries, will play in the global economy, including in information technology, outsourcing and innovation. I was particularly interested in software and technology development in these countries. As discussed in numerous sessions, by many measures China is the third or fourth largest economy and is on track soon to become the second largest economy. During the conference, several people described the United States as the Great Britain of the 21st Century and nobody disagreed. Still with large numbers that means a GDP of under $5000 in the coastal areas and $1000 in the interior and obviously still a developing country.

I was invited to a private lunch that benchmarked venture capital investment between China and India that featured some key venture capitalists like Joe Schoendorf from Accel Partners (who are an investor of Alfresco). One of the presenters, Professor Martin Haemmig from the Center for Technology and Innovation Management, has probably come up with the only analysis of the VC investing between the two countries and the US. Martin stated that over the last five years the median return on investment in Chinese technology has been an astounding 25 times, a top quartile return of 40 times and lower quartile return of 14 times. This compares with the US where the median return of venture capital is 6.8 times. Even the bottom return of a Chinese fund exceeds the best return of a US fund. As Martin points out, “No wonder all the VCs are piling into China.” Although China doesn’t really come close to matching the amount of VC investing in the US, it is now number two in the world. There is six times as much VC investing in China as there is in India.

Everyone anticipates continued growth in China, especially as the boom moves westward from the coastal cities. As in Davos, I focused much of my time on the interactive workshops that allow us to engage more directly the other participants of the conference. I will be writing up what I learned at those sessions and interviews with some of the people that I met that are from the IT sectors. I also like politics, so I will write up my views on what I learned just from being in China and one of the most controversial sessions featuring Thomas Friedman, the author of “The World is Flat”.

What's Happening at EMC World?

This week is EMCWorld in Orlando and encompasses what used to be Documentum Momentum. Unfortunately, I don’t think I’m invited anymore. :-( However, it is definitely worth tracking what’s going on and I am trying to find out what was going on there by reading the news and blogs. I am also trying not to be so hard on Documentum and have acknowledged their leadership and innovation in integrating the ECM stack. At the conference, Balaji said:

"The future of content management is no longer just about securing, accessing and storing content," said Yelamanchili. "It is about driving new levels of collaboration and knowledge management through deriving more intelligence and context with information. It is also about managing all types of business processes and allowing connections to be made within and across different business environments. As a leader in ECM, EMC is in a great position to drive innovation in these key areas."

As far as I can tell, the big news on the Documentum side in terms of innovation seems to be TaskSpace, Based upon the description, it seems to be more focused on scanning and capture and “transactional content”.  There is a data sheet on EMC’s Taiwan web site.  What is surprisingly is that there are no screen shots, so it is really hard to tell what is different about this product versus the collection of technologies that they already had. There was this quote from Whitney:

“TaskSpace is designed for high-volume, content-rich task processing, providing sophisticated capture and business process management (BPM) capabilities. A user experience built specifically for managing transactional based content and processes, TaskSpace enables organizations to streamline transactional business processes and improve end user productivity.”

In addition, there is some talk about Web 2.0 streams that will allow developers to mash Documentum content with internal and external web content. This is great news. Again, it would help if there were pictures or more details.

I also noticed that Craig Randall presented the Documentum Foundation Services, which I would suspect contains their long awaited web services interfaces.

It’s a shame that there aren’t more people blogging about EMC World. Given that there are somewhere between 6000 to 8000 people depending on who is writing, I wish there were more people who blogged. A search on Technorati yields about 136 posts, but I can’t find a lot about Documentum in those posts. Let me know if I have missed anything.

What Jeff Teper Said at AIIM

It has been two weeks since AIIM and I promised to write up something on the keynote presentation by Jeff Teper, Corporate Vice President for Microsoft Sharepoint. However, I have spent a good chunk of time thinking about the presentation so that I could give a more thoughtful commentary. Since Microsoft is out to disrupt the ECM market, all ECM vendors should care what Jeff and others at Microsoft think.

The title of the presentation was From BI to Blogs and Workflow to Wikis - Enabling Governance and Empowerment. I have the presentation from the AIIM website. I suppose if you want a copy you can email Jeff to get it. If you post a comment or send me an email, I will see what I can do. The title indicates that there is a natural tension between traditional enterprise systems such as business intelligence and ECM and the new generation of content tools such as Blogs and Wikis. This is an interesting observation and the two sets of technologies are rarely juxtaposed against each other. Without ever mentioning “Web 2.0”, Jeff was capturing some of the elements of Web 2.0 and their implications on the enterprise.

In my blog on AIIM, I had originally chastised Jeff for taking a very partisan approach to a keynote address. Looking at the slides, at least in the beginning his presentation had a very neutral perspective to the issues facing corporations. Looking at my notes that I took that captured both what he was saying as well as what was on the screen provided a much different outlook. This presentation was clearly about Sharepoint and where Microsoft was aiming Sharepoint. Although it was a sales pitch for Sharepoint, I nonetheless found it interesting and an important introduction to some of the missing concepts in Enterprise Content Management. Russ Stalters said that he found nothing new in this presentation, but I found new insights into Microsoft’s positioning of Sharepoint. Russ probably gets invited to more Sharepoint events than I ever would. However, I found new messages that I had not seen in other Sharepoint literature that is publicly available.

Governance vs. Empowerment

The major premise of the presentation is that enterprises need to balance governance, a control of information, with empowerment, the free flow of ideas and collaboration between employees, teams,  departments, other enterprises and customers. Identifying the regimes of control in execution-driven organizations as being able meet new regulatory and risk control, he contrasts this with innovation-driven organizations (“like Microsoft” as Jeff mentioned) that empower their employees by allowing them to make their own decisions and provide the technology to do so. Islands of information were also preventing cooperation and collaboration. By providing a “Best of Both” approach, enterprises can meet the financial and legal risk associated with information out of control with the need to innovate to meet the new challenges of internet-based competition, closer partnerships in design, and attracting and retaining talent from a new, web-enabled generation of employees. Microsoft served as a good example of what corporations are up against and he used Microsoft as case studies for many of these examples.

He stated that a new set of technology enablers has made it possible to meet the needs of providing a best-of-both solution. Hardware and software are increasing in functionality with 64-bit computing coming on line and multi-core processors in ordinary desktops. Web-based innovation and changes in user experience have brought new forms of collaboration, searching and shopping (although Microsoft hasn’t exactly been one of the leaders in this area.). Interoperability through web services and XML makes it possible to connect disparate systems together.

It is at this point he provides the new playing field in which to position Sharepoint. Two dimensions outline this playing field with Governance on the Y axis and Empowerment on the X axis. High on Governance, but low on Empowerment are the enterprise software technologies of data warehouses, ECM and portals. High on Empowerment, but low on Governance are the desktop applications of spreadsheets, group and personal databases, and intranets. If only someone would provide the best of both these capabilities, that would be the next generation productivity platform. By balancing both, a platform can provide governance through policy controls, rights management, auditing and controlled architecture along with the empowerment of self-service, better UI, role delegation and pervasive collaboration.

This next generation productivity platform, of course in Microsoft’s opinion, would be Sharepoint and “other products that you can find on the show floor.” I buy the distinction between governance and empowerment, but I believe it is more of a single continuum between governance and empowerment in a single dimension. Why this is important is that the reason we have governance and empowerment has a lot to do with what type of content, what application, context and who in the enterprise is being addressed and not simply at technology trade-off. There are times where governance is essential and times where empowerment can only be handled through laissez faire policies, but the overlap is not as big as he suggests. What is more common is that there are clear interfaces between these activities that prevent contamination of the other.

Microsoft’s Sharepoint Strategy?

Once a best of both is achieved, then a strategy of creating a connected organization, building a holistic information management experience, and investing in a strong vendor ecosystem will yield a “Strategy for Success”. Jeff used the example of a consumer products company that went with a best of breed strategy and met issues of interoperability and challenges to make their information infrastructure work. He emphasized the importance of holistic solutions that link everything together. What he implied was that all the important systems were Microsoft systems.

I didn’t quite get this transition and its connection to the best of both other than Microsoft says so. However, this looks like a reasonable strategy for customer, but more importantly for Microsoft. It is probably Microsoft’s strategy for success in competing against two major forces and laying them against this playing field. On the Governance side are the traditional enterprise vendors, in particular the ECM vendors. On the other end is open source who originated the empowerment tools of the wiki and blogs. Microsoft can add 1 plus 1 and yield 3 by combining these capabilities and leverage their strengths of enterprise pervasiveness, a broader platform, and a strong ecosystem to beat the competition.

The Connected Organization plays to Microsoft’s strengths of going where Windows is and to connect islands of information. Because of Sharepoint’s price point relative to the major ECM vendors, it has gone piecemeal into many organizations and with Sharepoint 2007, there is a strong emphasis on search and portals as the means to aggregate and federate the organization. Jeff presented a chart that linked different lines of business and connected them to the people in those organizations, which is a major theme of Sharepoint 2007.

It was at this point that I expected to hear what I hoped I would get out of this presentation - a definition of what is Sharepoint 2007. One of my most Googled blogs is What the Heck is Sharepoint 2007, which goes to show that a lot of other people are wondering the same thing. We even see eWeek’s Mary Jo Foley frustrated in finding a definition for Sharepoint and potentially sees it as the next operating system.

What is Sharepoint 2007?

What came up was a slide titled “Holistic Information Management”. To the left was the familiar wheel of six technologies: Collaboration, Portal, Search, Content Management, Business Process, and Business Intelligence. However, this time the circle included the words “Experience Management Platform” in the center. So is Sharepoint Holistic Information Management or is it an Experience Management Platform? Neither of these terms is in common usage in IT shops nor would I say that IT managers are seeking either. This must be frustrating for Microsoft that they have not been able to articulate what Sharepoint is nor can they associate it with a specific market that the industry can rally around. It’s not quite as simple as addressing the operating system, database or CRM markets as they have in the past.

It’s worth pausing for a moment to reflect on both terms Holistic Information Management and Experience Management Platform. When Jeff spoke about the platform being holistic, he mentioned issues around interoperability and security. By thinking holistically and integrating with other systems, the experience can be seamless for the end user. Perhaps I was too busy trying to take in what was being said in this slide, but I don’t recall anything being said about Experience Management. A quick search of all of Microsoft.com doesn’t produce any results either against search.microsoft.com or Google against link:microsoft.com. Maybe I am reading too much into this, but at the core this could one of two things. It could be management of the user experience where new UIs are presented in the six different technologies. Nah! It could be managing experience as a synonym for knowledge. My assumption has been that Sharepoint is a knowledge worker platform for creating applications incorporating all the technologies that would normally get folded into a portal to support knowledge workers.

Why this is important is it gives us a clue on what Microsoft thinks Sharepoint is, how comprehensive it is, and where it will get targeted. Equally important, it says what Sharepoint is not - you wouldn’t build an ERP system on top of it. (Would you?) This picture of six technologies expands the notion of content applications beyond the vision of the ECM vendors. It is also a platform that provides insights and access to other systems that can affect content. In other words, it is holistic from the users’ perspective in serving up information to knowledge workers. Ironically, nothing is said about the new empowerment technologies here. Sticking to the same picture that is probably about a year old, with new position of wikis and blogs, the thrust of the first half the presentation is lost. However, I would expect to see more of this type of positioning in the near future.

After positioning the technology, Jeff handed over to Arpan Shah, Group Product Manager, for a demo. Probably because this is AIIM, the demo was very document management focused. However, the demo started with Wikis and Blogs to show the empowerment of end users to add content. In my mind Wikis are associated more with simplified link management rather than formatting, but it was the latter that Arpan emphasized. Blogs were straight forward enough and show what that might mean in an enterprise environment. The rest focused on more document oriented activities like the construction of corporate PowerPoint presentations from Sharepoint, linkage from Office, the creation of a team website, and the set up of basic workflows. Arpan showed Outlook as the off line tools for accessing and syncing documents to and from Sharepoint. The core differentiation from the other ECM vendors that Arpan demonstrated was Office integration and the new media types of wikis and blogs.

Microsoft Ecosystem vs. ECM

Jeff then resumed by displaying the Microsoft ecosystem and customer base. There were a couple of advertisements of customer stories at Starbucks and Miami Dade County Schools as well as the logos of every major company in the world. This should obviously make any ECM vendor concerned. It is for that reason that Microsoft showed that it is working with vendors like EMC, OpenText, Vignette and Interwoven, probably to encourage others to hop on the Sharepoint bandwagon. This is otherwise known as embrace and extend.

Jeff very prominently displayed a collaboration between EMC and Sharepoint from October 2006. An agreement to cooperate that allows Documentum to fit within the Sharepoint hooks of Office and Sharepoint portal to access Documentum more easily. He then presented a collaboration with OpenText where OpenText is building solutions on top of Sharepoint combining Sharepoint empowerment with OpenText expertise in regulated documents. Jeff then made a slip of the tongue about how vendors such as Documentum and OpenText can build solutions on Sharepoint. I’m sure that EMC sees the opportunity for Sharepoint to build applications on top of Documentum.

Microsoft’s strategy seems to be still in formulation, but their objectives are not. Jeff Raikes has said that Sharepoint is one of the fastest growing products Microsoft has ever had and expects Sharepoint to do about $1B in revenue in 2008. Much of that revenue comes not from the portal or BI market but from a zero sum game against the ECM market where revenues are richest. They are changing the game by expanding out a platform that encompasses all the technologies that are useful in building solutions for knowledge worker solutions in enterprises. As my colleague Ian Howells pointed out that Microsoft has five main approaches to marketing: a drag race, platform play, stealth play, best-of-both play and a high-low play. In general, Sharepoint seems to be a platform play, but with a best-of-both twist with the both being ECM vendors on one end and open source collaboration tools on the other.

There are many things that I have to admire about Microsoft’s ambition. It is large and grand. Like many other Microsoft products, they have got a lot of things right in version 3 of Sharepoint. However, there are many things of which I don’t think as highly. Sharepoint got here because closed APIs in Microsoft Office allowed them exclusive access to repository functions from Office into Sharepoint. With Office owning 90% of the Office Suite market after shutting out Lotus and WordPerfect with its Windows monopoly, they are now using the Office monopoly to extend control into the repository market. They used the power of the Windows distribution channels to get free Sharepoint Services in more places than it would naturally. Although they imitate a lot of features of ECM vendors, they are unable to articulate what exactly they have created or innovated despite making public their plans for quite some time. Their choice to focus on an entirely Microsoft stack maybe in their interests, but not for those who have invested in Java, LAMP, Unix or other stacks.

We are tracking Microsoft because they are smart people and what they say and do matters in Enterprise Content Management. However, they are asking you to make an investment in a Holistic Information Architecture that covers a wide variety of functionality, including ECM. Yet they have had a difficult time articulating exactly what this platform is and where it might be applied. They don’t even use the term Enterprise Content Management, yet here they were presenting in the largest conference devoted to that topic referring to other ECM vendors building on their repository. Just as they are coming to market with Sharepoint 2007, new Web 2.0 techniques are becoming hot and they need to be seen addressing these. There vision is simultaneously comprehensive and vague in its target. Given that their product lifecycles are measure in many years, it is important know where they are going and they have just not made that clear in this presentation.

AIIM - Web 2.0 and Enterprise Content Management

Next week, I'll be in Boston speaking at the AIIM conference there. My topic of discussion is Web 2.0 and the next generation of Enterprise content management. Joining me is Wilson D'Souza from MIT. We will be speaking at 2pm on Tuesday, the first day of the conference. I hope you can come.

As usual, I am putting finishing touches on my presentation. However, I found some interesting material for the presentation from Kathy Sierra's blog. Kathy has been the source of blogging lately because death threats aimed at her by some thugs posting gruesome images in other blogs. This is her first post-trauma blog and includes some interesting charts that illustrate what is going on with Web 2.0. Here is one my favorites from the post because it really hits home what is different for the ECM world. Click on Web 2.0 to see some of my thoughts.

Open Source Business Models

Yesterday, I was on a panel at The Server Side Java Symposium at the Venetian in Las Vegas. It’s been 7 years since I have been to the Venetian when we had the Documentum user group meeting, Momentum, at the Venetian. Having since been to the real Venice and been in a real gondola, the effect of seeing indoor canals and tromp l’oeil ceilings is even more surreal. (BTW - Don’t pay 80 euros to ride in a gondola in Venice. Spend one euro to take the Targetto. Don’t spend any money to ride a gondola in Las Vegas.)

This is the first time that I had met Joe Ottinger, the editor of The Server Side, in person. We have spoken on the phone before and he is a nice, funny, unassuming guy. Joe was the moderator of the panel that included Joaquin Ruiz from Spike Source, Brian Kim from Liferay, Bob McWhirter from JBoss.org, and Neelam Choksi from Interface 21 (Spring Framework). Geir Magnusson of Apache was also planned to be on there, but had other commitments. I know Joaquin and I were a bit surprised when we found out that the panel was only supposed to last 35 mins. (I got up at 5am and flown all the way to share 35 mins with 5 other people?!) Fortunately, Joe was able to start the session earlier and let the panel run on a bit longer. Most people stayed as well for the post-lunch session.

Most of the questions were about why open source and what license people should use. The reasons were consistent among us around the power of the model, the cost effectiveness of open source and the draw of the community. Joe had a question on how the community is managed and I think it was Dave who answered that it requires a certain level of control and discipline to ensure the quality of the code that is contributed. There were lots of questions around GPL, of which Joe is not a fan nor is he a fan of Richard Stallman. However, I think how people perceive GPL has changed in that you can combine non-GPL components with GPL and the FLOSS exception allows you to embed GPL in non-GPL systems. Everyone wants to know what will happen with GPLv3 and although we are tracking it, I can’t really say what will happen with the restrictions. (See Matt Asay's comments on GPLv3. Matt is our VP, Bus Dev and he knows a lot more about this than I do.) I commented on the concern that some OEMs have with LGPL in that it has not been tested in court. JBoss and RedHat have a very liberal and ISV friendly interpretation of it, but we need to have a court test to prove that it is okay to use in commercial software.

Richard Stallman

I appreciate the time that Joe gave us and the opportunity to speak about Alfresco. The Server Side has been a good source of the downloads that we have had so far. However, the whole area of Open Source Business Models is so much more than licenses. It really is a disruptive model not just for software, but for many other industry sectors. I organized a few thoughts on the flight over to Las Vegas.

Peter Fenton

When we first started to look at starting Alfresco, we interviewed and discussed the concept with some of the best thinkers in open source. One person in particular was very helpful due not just to his exposure to open source, but due to the thinking he had applied to looking at open source in the abstract as an investment thesis. Peter Fenton was an associate at Accel Partners and now a General Partner at Benchmark Capital. Peter had come up with a set of criteria of what worked and what did not work in open source. At the time we started, there had been 10 years of experimentation in investing in open source, although I think the last couple of years have been particularly instructional. Here are Peter’s criteria:

1. There must be a large market with millions of users. I would characterize this as having a critical mass. If you are going to try and spread this as far and wide as possible and you are only going to get a couple of percent actually converting to paying customers, then that number must be very large. In this case, horizontal markets are good and vertical markets can be very limiting.
2. There should be organic adoption of the project. As Peter points out most projects flame out in the first 2 years. The long, slow adoption of the organic community is a good thing. However, there are other ways to get a community. We have found a natural community in Enterprise Content Management practitioners who find Alfresco familiar and with which they are able to deploy much more cost-effectively than closed source options. Likewise, companies like IBM and Adobe have ready made communities as they exploit the open source model. Perhaps Microsoft will one day realize the potentially powerful open source community that they will be able to create with a quick email from Bill.
3. There should be demand-side economies. It’s hard to know exactly what Peter means here and it might be Stanford MBA speak for scarcity of open source alternatives. He states that there should be a natural monopoly or duopoly. As an investment, you are looking for a company to be big and therefore it needs to be not just a leader in the segment, but dominant. Open source web content management on its own is an example of a market that is too diffuse. Open Source Enterprise Content Management is not.
4. There needs to be sufficient product complexity or drift. This complexity provides a means to add value-added service over a product that is free. Products like application servers and database management systems are inherently complex. Many of the Apache projects, such as Tomcat, are too simple for someone to make money on them. It is possible that a product can work too well.
5. The project should address a new frontier of adoption. Innovation happens at the edge. This should not just be old stuff for free. Peter uses the example of the LAMP stack as addressing new web sites and an area that commercial vendors overlooked. This is classic Innovator’s Dilemma. However, I would state this as there being a compelling differentiation other than just being open source. The 10 times factor of performance or new functionality allows the product to sell itself with the open source model being a swift closer. The community can be the source of the innovation that adds this wow factor.

I would add my own corollary to rule number one. Rather than just a large market, it needs to be a commodity market. With the commodity market you get the size need for critical mass and the market has been educated on the need for that product. This, by extension, means that not all markets are ripe for open source. Lall stated during the panel that not all markets need to be commodities since open source has been a major source of innovation. I agreed that some categories of open source were created by open source, but they are still commodities. An example is wikis, of which there are lots and it is now a commodity.

Looking at these rules, there are a number of industries that fall into these categories. Back in 2005, Peter was evaluating content management, wireless, system management, internet browsers, security, business intelligence, application infrastructure, middleware, databases, build and test environments, development tools. The only major category that was missing was games, which has 3 of the top 20 software companies. Most of these categories have had investment and new entrants funded by the major VCs, including Peter while at Benchmark. Perhaps you can consider other industries that are commoditized where you can tell one product from another except through very deep analysis.

Tim O'Reilly has said that when the price of a product like open source goes to zero, then the adjacent activities in the value chain gain value. This fits very neatly into Michael Porter's concept of value chains and competitive value. How you make money from open source can be divided into a few different models.Those models are dependent less on how you make money on the software and more on other activities that are adjacent to delivery and use of that software. The most common models are:

• Support - This is the model that Alfresco uses. This about providing technical support, maintenance and bug fixes. In this model, the free version usually moves faster than an enterprise version where more time is taken to certify the product against stack components. Bug fixes to this enterprise version are given higher priority, but are eventually folded into the main code line.
• Professional Services - This is providing professional services in using the software to create new solutions specifically for a customer. Custom engineering can also come under this category although the result can end up benefiting everyone as an enhancement to the product. JBoss and Interface 21 make some of their revenue from this model. At Alfresco, we give almost all the service revenue to our partners. Services is also one of the lowest margin businesses with the greatest risk in terms of building capacity.
• Insurance - This is a warranty or indemnity on the product. The company supporting the open source product guarantees to support the customer for damages or claims that may arise from the use of the product. This is rarely provided on its own and is usually provided as a value-added service in conjunction with either support or services.
• Enterprise Features - For those venturing into open source from a closed source background, this is the most comfortable model. By holding back certain features, particularly those that are related to scalability or system management, then users can try the software out, but if they are getting significant value from the software, then they will pay for this. We tried this model, but have decided that we could build a much larger community and hence more customers by providing the product 100% open source. Having enterprise features also encourages the community to replace your enterprise features, which can end up being counterproductive for everyone.
• Hosting - Hosting is becoming a more popular way to consume open source software. The people who create the product can get value by providing the software as a hosted service.
  Embedding - Commercial vendors who can use open source software can often license the software to include it in an OEM relationship. This model is often accompanied by a dual license, a license that can be distributed as only open source or as an exception to those who pay for a commercial license. Once a commercial license is purchased, then the licensee is free to use the software however they feel appropriate. This is a model that was pioneered by JBoss, but originally developed by Ghostscript, an open source PostScript interpreter.

Each of these models has different implication in terms of how big the community it creates, the perception it gives to those trying the software and how much pressure there is on users to convert to a paid-for version of the software. Those who have given trust have often returned it with either contributing back to the project or paying for support when deploying the product into production. The exception to this are Google and Yahoo, who have created multi-billion dollar businesses using open source, but have given nowhere near as much back. This is one of the reasons that there is so much controversy over GPLv3, which attempts to set boundaries on fair use in a hosted environment.

The open source model is very powerful and rapidly growing. In our first full year of revenue, we have grown 50% faster than Documentum did in its first full year of revenue. You can use this model regardless of where you are located since it is inherently global. Despite slower uptake of open source in the UK, we have been able to distribute our software to countries where open source has greater acceptance and make a big impact in the US, the largest software market. It’s also a lot of fun, because people who are buying your product are doing it because they have already tried it and like it, rather than being convinced or coerced into using it.

There is still a lot experimentation in the above dimensions in the model, but I think we will be seeing a repeatable, cookie-cutter model. After all the fuss around GPLv3 dies down and after there is clear precedence on interpretation of LGPL, I think we will worry less about license and more about growing open source faster and seeing the disruption through.

The Server Side Symposium in Las Vegas

I'll be speaking at The Server Side Symposim in Las Vegas on Open Source Business Models on March 22 at lunchtime. Also on the panel will be Geir Magnusson from Apache, Bob McWhirter from JBoss, Brian Kim from Liferay, Neelan Chokski from Interface 21 and Joaquin Ruiz from SpikeSource.

Remember, if I flub it, "What happens in Vegas, Stays in Vegas."