Re: Database market share 2004

knorth wrote:

> > Agreed, but arguably "number of downloads" is moreso. I remember back
> > during the dot-com boom, that was how ISVs measured their success.
> > Didn't get them very far...
>
> The first example that comes to mind is the Java Developer Kit. Because
> it was a free download, you couldn't look to Sun financials for "JDK
> sales" as an accurate measure of Java adoption. In the ramp-up period
> for Java, Sun regularly publicized the number of JDK downloads as a
> measure of Java's growing popularity.

And it's absolutely a great measure of growth when you're dealing with a level of explosivity as Java was. Fastest growing language / platform in computing history, and all that jazz.

Still, Sun (the company) hasn't been directly assisted by that model. Indirectly, by association, yes: they sold more hardware due to Java. And in the early days, through Java licenses.

All of this points to the difficulty any traditional ISV will have if they go OSS. Hence why most of them stay proprietary.

> > Great, but since the only major integrated hardware & software
> > companies are Sun & IBM, that's a rather limited set of companies.
>
> Your integrated hardware & software company list is too narrow. For
> example, HP's quarterly revenue from software was $277 million. That's
> $205 million more than Borland's most recent quarterly revenue.

I should have counted HP, yes.

> The more fundamental question is why you'd want to use an "integrated
> hardware & software company" prism when looking at the effect of open
> source software on hardware revenues.
>
> Not every organization buying hardware to run Linux and Apache web
> server will limit its vendor choices to only IBM and Sun because they
> are integrated hardware and software companies.

I look at it because someone has to pay for the software development. The commercial OSS distributions (MySQL, Linux, etc.) are funded through investment capital and subsidies from the hardware side of the business.

The first approach (capital) requires a return on investment. That usually implies a direct return, through support or professional services. So, unless the OSS ISV becomes a support and consulting/contracting company, it's going to have troubles meeting its investor's desires, given how little license revenue one gets from OSS (MySQL's ~$10m vs. Oracle's billions).

The second approach requires continued purchasing of hardware. I.e. the software goes back to the old days of the mainframe industry and is just "value added" to the box. It's obvious such an approach is only sustainable as long as people buy your hardware because they love your software. Apple is an example of this working, Sun is the counter example.

My overall point is that OSS volunteerism can certainly support the platforms indefinitely, but the rate of innovation will shrink if such subsidies and capital shrinks. Companies will buy what they need. Thus traditional ISVs may not be so dead after all.

Unless of course, the entire industry moves to a "services" model. I know OSS advocates love this, but I don't think they really understand the horror it implies in reality. It doesn't mean better engineered systems, or cheaper systems, or more freedom for enterprises. It means "Buy our software, which doesn't really work out of the box, and get a busload of IT college graduates + 1 princpal consultant (aka. "babysitter") for only $10m more!"

If they can't lock you in through copyright, they'll lock you in by withholding knowledge. Which in theory sounds like meritocratic tech utopia, until you realize the gatekeepers are the partners at the Big 5 consultancies, not Smarty Programming Wizard Independent Consultants.

> On the other hand, if you're selling application server software, the
> Linux/Apache/JBoss combo is a threat. Look at BEA's numbers for 2003
> and 2004:
>
> http://www.sqlsummit.com/Trends/AppServerMarket.htm

While BEA's share certainly is impacted by JBoss, it's unlikely that was the primary or only source.

Oracle's Application Server, for example, have made good inroads, and they're just as much an ISV (but much bigger) and just as proprietary. Fujitsu also made inroads, but they're hybrid hardware/software , and not OSS.

The application server market has become psychologically commoditized; in reality, people tend to stick with the applicaiton server they picked in the first place. Time will tell if it becomes truly a commodity or remains differentiated , just like all those other software areas people said were becoming commodities: databases (nope), operating systems (MS still at 95%), security (NAS and Symantec), etc.

It takes a lot of work and a lot of coordination to make enterprise software, it belittles the complexity of all of this to suggest that differentiation won't continue to be the market driver.

Cheers
Stu Received on Tue Jun 07 2005 - 09:42:14 CDT