Most mature business software markets by now have a viable ‘commercial open source’ supplier. These companies work by distributing a free-to-use, open source application and charging those customers that want support and/or an ‘enterprise ready’ enhanced version of the software.
The terms of competition between these companies and the traditional, ‘proprietary’ software vendors are clear: the open source alternatives can be much cheaper to use (although their proprietary rivals often question the true cost of ownership) and benefit from a community of programmers who are, in the best cases, personally involved in the development of the product.
It is rare, though, that a software sector supports two viable commercial open source vendors. But business intelligence is one of the few markets that does, with two such companies – Jaspersoft and Pentaho – reporting rapid growth in the past year as cash-strapped businesses sought cheap ways to deploy BI projects.
That this should occur in the BI market is perhaps a reflection of its maturity: traditional BI offerings from mainstream suppliers vary little in functionality, one factor that contributed to the wave of consolidation the industry saw in 2007.
Both Pentaho and Jaspersoft say that they seldom come into competition with one another. “We rarely see Pentaho in sales opportunities,” says Jaspersoft’s CEO, Brian Gentile. “In fact, we rarely see competition from the open source world.”
Pentaho CEO Richard Daley comments, “Our main competition is the same companies it was when we started in 2004, albeit under new ownership,” meaning Cognos (now part of IBM), Hyperion (now part of Oracle), and BusinessObjects (now part of SAP).
Indeed, the two companies’ products are not precisely analogous – Pentaho has assembled, mainly through acquisition, various components of the BI stack, whereas Jaspersoft is focused more specifically on reporting. “We come at BI from a meaningfully different angle,” insists Gentile.
Nevertheless, both chief executives are keen to demonstrate the vitality of their respective developer communities. This is arguably an important point of differentiation between open source vendors, as a project with no community around it is often considered to be one with no future.
“We have 140,000 registered members, all of whom are engaged with our community,” says Gentile. “Around 12,000 commercial customers have bought something from us, whether it is training or support, and they are across 100 countries, so it’s a very big community.”
Daley, meanwhile, says he is sceptical about some of the statistics that commercial open source vendors use to ‘prove’ their community’s vibrancy (although his comments were not explicitly directed towards Jaspersoft). “Some vendors will say, ‘We’ve got 100,000 community members,’ but what is the definition of a community member? If you look at it, you can find out pretty quickly that 90,000 of those were on their forum for an hour or less, and never came back.”
Clearly, both companies place great stock in the strength of their respective communities, and discussions of this kind are likely to become more prevalent as commercial open source companies grow in number and stature. But according to Daley, it is something with which prospective customers are rarely concerned.
“Most of the time nobody asks us, ‘How active is your community?’” he says. “Should they be asking about it? I don’t think so. For the price points we’re talking about, they don’t need to go through a whole due diligence process to find out who is making which contribution to the code.”
Commenting on the future of the commercial open source model, Jaspersoft’s Gentile reflects that there is a considerable opportunity for a large company to consolidate what is at present a fragmented industry, as has so often been the case in the world of proprietary software.
“There is the possibility of something much bigger forming,” he says. “It could be Red Hat, it could be Novell, or even IBM. If they’re smart, one of these companies will figure out how to bring together the best commercial open source companies over time.”
Where the open source industry is different, however, is again the importance of the community. “Any acquirer who didn’t pay attention to the needs of both the community and the customer base would be wasting their money,” says Gentile. “The community would simply say, ‘We’re going to take the code and go our own way.’ We’re already starting to see this with [open source database software provider] MySQL, where a number of forks have split off since the acquisition by Oracle.”
That is not to say that Oracle has necessarily treated the MySQL community especially badly, he adds. In fact, Jaspersoft’s own user research has found that Oracle’s handling of the many open source projects owned by Sun Microsystems since it acquired the company earlier this year has been “better than anyone would have expected”.
This chimes with another important trend, says Gentile: traditional software vendors acting more and more like open source companies. “In future, every software company of substance will be adhering to and advancing the principles of transparency, participation, collaboration and openness with the code,” he says. “I’ve long predicted it, and I am now watching it occur.”