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Open Source

PLM Open Source Future – Cloud Services?

by Oleg on February 17, 2014 · 4 comments

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For the last few years, open source was one of the major disruptive factor in tech. Open source powers world’s leading tech companies. Tech giants like Google, Facebook, Amazon and many others would not exist without open source. The success of RedHat put a very optimistic business projection on the future disruption of industry by open source. Since then, we’ve seen many companies that started their business trajectory as “Red Hat of XYZ” with the objective to disrupt a particular industry segment. Many of them became very successful in what they do. However, what happened with their “open source” messages?

My attention was caught by two articles speaking about current trajectories of companies building their business model around Open Source software. Peter Levine, partner at Andreessen Horowitz started this conversation in his – Why There Will Never Be Another RedHat: The Economics Of Open Source and ReadWrite article was following TechCrunch article – Why Open Source Is Disappearing From Open Source Companies? Have a read – good articles with lots of interesting examples and data points. According to the Peter Levine, the main reasons why open source companies cannot compete successfully with their proprietary rivals are simple – money and inability to keep stabilized roadmap development. Here are two notable passages from TechCrunch:

There are many reasons why the Red Hat model doesn’t work, but its key point of failure is that the business model simply does not enable adequate funding of ongoing investments. The consequence of the model is minimal product differentiation resulting in limited pricing power and corresponding lack of revenue. As shown below, the open source support model generates a fraction of the revenue of other licensing models. For that reason it’s nearly impossible to properly invest in product development, support, or sales the way that companies like Microsoft or Oracle or Amazon can.

2013-revenues-open-source-vs-others

And if that weren’t tough enough, pure open source companies have other factors stacked against them. Product roadmaps and requirements are often left to a distributed group of developers. Unless a company employs a majority of the inventors of a particular open source project, there is a high likelihood that the project never gains traction or another company decides to create a fork of the technology. The complexities of defining and controlling a stable roadmap versus innovating quickly enough to prevent a fork is vicious and complex for small organizations.

ReadWrite article brings list of companies started as “open source” and moving now towards different messages.

In 2010, SugarCRM’s main landing page prominently advertised itself as open source. Today? Not a single mention. In February 2009, Alfresco declared itself “the open source alternative for Enterprise Content Management.” No mention of open source on the home page today. The same goes for Acquia, the Drupal company (see 2009 vs. today), and most every other significant company that sells support or software around an open-source project.

PLM industry has their list of open source companies. You can count several product today branded themselves as “PLM open source”. The most notable, Aras created innovative model called “Enterprise Open Source”. To core part of Aras was never open sourced. However, Aras developed significant community network of supporters implementing Aras Innovator software and building applications on top of Aras core platform. Aras keeps fairly large reference customer base supporting and advocating for Aras enterprise open source strategy. According to them, it brings predictable license cost model combined with open software platform, which differentiate Aras from other PLM companies.

TechCrunch article made me think what will be the future turn in development of PLM open source? Would “cloud services” become a future strategic exit for Aras and other open source PLM companies? According to Mr. Levine, SaaS and appliance business model can be a good match to Open Source projects. Here is a formula:

This recipe – combining open source with a service or appliance model – is producing staggering results across the software landscape. Cloud and SaaS adoption is accelerating at an order of magnitude faster than on-premise deployments, and open source has been the enabler of this transformation.Beyond SaaS, I would expect there to be future models for Open Source monetization, which is great for the industry.

What is my conclusion? There is no clear conclusion today. In my view, PLM industry is still waiting for big “disruption moment”. Will it come from cloud PLM alternatives, open source PLM provided as cloud services or just service projects using open source software? Time will show. It seems to me “value” and “maturity” are two main differentiations PLM companies need to focus these days. Just my thoughts…

Best, Oleg

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PLM Software and Open Source Contribution

by Oleg on February 11, 2014 · 0 comments

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Open source is a topic that raised many controversy in the last decade. Especially if you speak about enterprise software. The trajectory of open source software moved from absolute prohibition to high level of popularization. In my view, the situation is interesting in the context of PLM software. The specific characteristic of PLM is related to a very long life span of the software. PLM system developed and deployed 10-15 years ago are continue to be in active production mode by many customers. However, the question of how PLM software can leverage the value of open source software remains open.

Readwrite article Open Source Should Thank These Five Companies put an interesting perspective of the value of open source software for enterprise community. In my view, the article brings  examples of software components that can be re-used by enterprise vendors. However, technology is not everything. People and culture is another important element of open source contribution. Here is my favorite passage from the article:

“To encourage excellence, you need to do things out in the open,” Kreps [Jay Kreps of LinkedIn] said. “Engineers are like everyone else—if everybody’s watching, they want to look good. Otherwise we’re building a crappy internal tool that’s just good enough to meet our immediate needs.”

I have to admit, open source initiatives didn’t start in web companies only. During the past decade we’ve seen significant contribution to open source made by major software vendors like IBM and some others specifically if you speak about massive investment in Linux projects. Another Readwrite article is trying to establish balance in open source contribution debates. However, the main conclusion remains the same – web companies these days leads the way for open and innovative technological development. I found conclusion interesting:

“…old school” companies like IBM don’t get the credit they deserve. But it is the Web companies that are building data superstructure on the Internet”.

I found the comment about data superstructure  important in the context of our PLM software discussion. The replacement of Windows servers and other backend infrastructure by Linux and other open source software is just a matter of time. Also, I believe this is an active process for many enterprise IT organizations these days. However, the question of data management foundation for future PLM software remains hugely open.

What is my conclusion? Open source can re-shape the landscape and future technological trajectories of PLM software. Technologies polished and contributed by web giants to open source community can provide a solid foundation to existing PLM vendors and startup companies to develop future foundation of scalable enterprise product data management solutions. Open culture combined with public quality acceptance can be another major shift that to differentiate future enterprise software developers. Just my thoughts…

Best, Oleg

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Budget and cost. These are important elements of every IT solution. PLM is not an exclusion from this list. There are lots of debates about PLM systems cost lately. Few days ago, I was discussing one element of PLM system total cost of ownership related to “up-front cost” – The Future battle of PLM upfront cost. Move to services / subscription model is clearly one of transformation in PLM TCO. Thinking more about PLM cost structure, I wanted to point on the cost of database licenses. My hunch, the majority of PLM software today runs on enterprise  RDBMS platforms such as Oracle and MS SQL Server.

My attention was caught by the following article Feds Move To Open Source Databases Pressures Oracle on IW Gov blog. The affordability of open source database solutions has government IT attention. I specially liked the beginning of the article

Under implacable pressure to slash spending, government agencies are increasingly embracing open source, object-relational database software at the expense of costly, proprietary database platforms. That’s putting new pressure on traditional enterprise software providers, including Oracle, to refine their product lineups as well as their licensing arrangements.

Future in the article, there is an assessment how much companies can save as a result of moving to open source database solutions such as PostgreSQL.

Moving to open source software can help agencies slice database costs by as much as 80% because open source providers aren’t hamstrung by the conventional business and licensing practices employed by large database companies such as Oracle, IBM, Microsoft and Sybase, according to Boyajian. “The traditional, burdensome licensing practices of the big proprietary guys have really started to put new kinds of pressure on government agencies,” he said. “Most of the licensing firms have come up with very inventive ways to make sure the price per year goes up and not down, and that’s in direct conflict with the way government agencies are trying to operate now.”

What is my conclusion? I smell the change towards free and/or low cost software. It comes with broader use of open source and expansion of service based business models. The combination may work as well. For those companies that feel comfortable with open source, it can provide a significant cut in IT expenses. It would be interesting to see if existing PLM providers will roll out a support for open source databases such as MySQL and PostgreSQL in a near future. Just my thoughts…

Best, Oleg

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GrabCAD and Open Engineering Source: Dream or Reality?

September 8, 2013

Everybody knows about open source software (OSS). The model of OSS skyrocketed for the last decade and made lots projects on the web very successful. The evolution of open source wasn’t simple. It evolved from just making software source code available to quite complicated system of open software licensing. Open source inspired lots of new initiatives. One […]

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Will New Jazz Product Development Model work for PLM?

April 13, 2013

The world around us is changing much faster these days. It happens in many places. Business environment are much more dynamic. New technologies are disrupting existing industries and eco-systems. PLM systems were developed to help companies to manage and follow product development processes in the companies and extended eco-system. As businesses are going through the changes, […]

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PLM Cloud and Open Source Coopetition

March 25, 2013

I want to continue the theme of disruption started in my post last week. I can see two major forces that will disrupt traditional PLM approach nowadays - cloud and open source. Both have some strong position points and some weaknesses. I put some of my thoughts about cloud and open source disruption last year – PLM […]

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PLM and DIY Applications

March 10, 2013

I’m sure you are familiar with the term DIY (do it yourself). While the term is not PLM specific, I’m often using it when explaining the way many manufacturing companies are approaching PLM implementations. Because of high cost and complexity of large integrated PLM suites, companies are deciding to make “homegrown” development by using variety […]

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PLM Open Source is Better Without Open Source

January 2, 2013

Open source is one of the PLM trends I covered in the past in my blog. I wanted to come back to this topic again. The title of my blog post was half stolen from the article on opensource.com – Open source software policy is better without open source. Read the article and made your own […]

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PLM and Open Source Checking Tips

October 18, 2012

Open Source Software (OSS) is a wonderful thing. For the last decade, open source changed the world of software development. PLM industry has their own open source rock stars. While I can see less hype around ‘open source’, I keep watching open source initiatives in PLM space. One of the things that very often debated […]

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PLM: Cloud and Open Source Disruptive Trajectories

June 24, 2012

Disruption. This is a word that dominates in many technological (and not only…) discussions. It is not a big secret – disruption means changes and opportunity. Back in my blogging histories 3 years ago – Future PLM face to face: Open Source vs. Cloud. After more than three years I still hold my opinion that […]

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