Open source Router? Open source moves up the stack?

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.

Novell in Microsoft’s crosshairs?

Novell to buy Suse

“This is not about competing with Microsoft. This is about addressing the impediments holding Linux back,” says Chris Stone, Novell’s Vice Chairman in the office of the CEO. What a great quote! I have worked with Chris in the past having invested in his prior company, Tilion. Chris is a smart guy and thinks big. Who in their right mind will tell Microsoft that they are competing directly with them? But let’s face it, Novell’s strategy is to ride the Linux wave by offering a complete enterprise stack which includes server, messaging, access control and eventually desktop. Yes their desktop products acquired from Ximian and SuSE are immature and resemble a server trying to become a desktop OS. However, with time, I do believe that Novell’s ultimate goal is to get on the desktop of corporations. As for IBM’s $50mm investment in the company, who knows, but that could be a stepping stone for a possible acquisition if Novell is able to pull off its amibitious plans. At Tilion, Chris tried to revolutionize the supply chain industry by creating an on-demand view of the supply chain leveraging new technologies like XML. Backing Tilion’s vision in a December 2000 article from Internet.com, Eric Schmidt, now CEO of Google, commented, “Tilion finally allows large enterprises and exchanges to go beyond the simple enablement or automation of B2B transactions. Tilion allows you see into systems which were designed to be closed. This kind of net service will be what justifies the huge investments in B2B infrastructures and technologies such as XML.” We did not get very far with that vision as the supply chain market dissolved along with the rest of the software industry in 2001. It will be interesting to watch Novell during the next couple of years because we all know that it is about execution, and if Chris and Novell pull it off, it will be a big play. Of course the odds are stacked against them.

Linux on the Desktop (continued)

In an earlier post, I talk about 2004 as a year where Linux begins to make inroads on the desktop. Here is a recent article from Infoworld suggesting the same. In the article Nat Friedman, cofounder of Ximian which was recently sold to Novell, makes some interesting points.

1. It is not a David vs. Goliath battle where Linux fells Microsoft with one swift blow;
2. Desktops for Linux shouldn’t try to look like Windows.

To dive deeper into point #2, Friedman says, “What you’re doing is lying to the user. What you want to say from the outset is, ‘this is a different desktop experience, but it’s going to be easy.” On the one hand he seems to be saying this because the user experience on Linux should be better, more reliable, and more secure. On the other hand, I disagree because from a business perspective corporations usually pursue the path of least resistance. If a Linux desktop acts and feels like Windows it means that corporations will not have to train their employees on a new OS. This saves a company potentially lots of hours and $$$ and lowers the Total Cost of Ownership of the product.

Time for Linux on the Desktop?

As everyone knows, Linux has grown dramatically in the server market capturing 20+% market share in a few years. Many of you also know that there have been a number of attempts to bring Linux to the desktop. Eazel founded in 2000 wanted to make a Linux GUI as easy to use as a Mac. While many of these attempts failed, I believe we are ready for another wave to bring Linux back to the desktop for the following reasons:

1. Success of Linux in server market causing enterprises to evaluate Linux on desktop;
2. Pricing-Microsoft changed its pricing model forcing enterprises to upgrade every 2 years;
3. Security-tired of those MSFT patch updates yet;
4. Functionality-it has gotten way better and easier to use and install, even office apps work on Linux;
5. Performance-do not have to upgrade hardware with software;
6. Browser becoming a platform in and of itself-more and more applications are being run in the browser as we get more and more connected to the Internet.

There are a number of companies going after this market including: Suse, Lindows, redhat, and Xandros.

As time passes, Linux is increasingly becoming a viable alterntive to Windows. That being said, it will not be for everyone like power Office users. However, I feel that in 2004 we will see some large corporations go with Linux on the desktop. Many corporations are already looking at how to segment its users and figure out who really needs Windows and Office and who can get by without it. Microsoft is already countering by saying the Total Cost of Ownership is much higher with Linux. What’s needed are management tools so that a system administrator can easily manage a multi-OS environment. If Linux on the desktop is going to be successful in the corporate market it will have to coexist with Windows. Of course, that is a different story on the international front where many countries are moving to Linux outright. Either way, it will be interesting to track this development over the next couple of years.