I finally got a chance to catch up on some trade rags and came across this interesting blurb from Network Magazine about XORP, the Linux of Routing. While an early project from UC Berkeley, I encourage you to take a look and keep it on your radar. This is yet another example of the potential commoditization of high-end products. Here is an excerpt:
"Since the routing code and the OS are free, the biggest expense will be the hardware. Commodity PCs make notoriously poor routing platforms, so they'll need a sufficiently gast bus structure to boost their total processing and throughput. The recently standardized PCI-X 2.0 fits that billing, providing bus sppeds reaching 700,000 64-byte Ethernet packets per second. That's good news not only on the performance front, but for the price tag as well. "A machine with 1GByte of RAM could easily be assembled today for less than $1,500," says Orion Hodson, a XORP developer. By comparison, a Cisco 7304-Cisco Systems' highest-grade enterprise router with software forwarding-runs $22,000."
It is still early days for XORP and the platform still needs to address performance and security issues, but the point is that any software product with a large enough installed base can be vulnerable to open source competition.
Speaking of open source software, MySQL just announced a new version of its database which has built in load-balancing and automated failover so it can be deployed in large transactional environments. This is a big deal and grealy expands the market opportunity for MySQL and will better position it against Oracle and IBM. One other open opportunity for attack in the database market is the reporting and analytics end. One of my portfolio companies which I have written about before, Metapa, is leveraging open souce technology, mainly Linux and PostgreSQL, to deliver terabyte-scale data warehousing on a cluster of commodity hardware. The secret sauce is its proprietary Linux database clustering software which is "purpose-built" for Business Intelligence. In early benchmark tests, the product has shown up to 10-50x performance improvements over existing data warehouses run on traditional enterprise systems. So if I were an incumbent, I would be concerned about these developments.