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Oracle Wants Proof That Open Source Is Profitable 393

Posted by Soulskill
from the show-me-the-money dept.
An anonymous reader writes "Since Oracle's acquisition of Sun, all open source projects that now have Oracle as their primary sponsor are worried about their future, and FUD is spreading quickly. Very few public statements have been made by Oracle executives, particularly regarding OpenSolaris. The community is arguing about the difficulties of forking the code base when most (if not all) of the developers are employed by Oracle. Now Oracle wants the community to prove that open source can be made profitable. What arguments can the Slashdot crowd provide to convince Oracle about that?" Reader greg1104 tips related news about licenses for Solaris. According to an account manager, "Solaris support now comes through a contract on the hardware (Oracle SUN hardware)."
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Oracle Wants Proof That Open Source Is Profitable

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  • by WrongSizeGlass (838941) on Friday April 16, 2010 @03:44PM (#31875996)
    Based on Sun's financial demise I'm sure that Oracle is already aware that closed source software isn't always profitable either.
  • by madddddddddd (1710534) on Friday April 16, 2010 @03:44PM (#31876000)

    open source is inherently no more profitable than closed source...

    they both CAN be profitable.

  • by Dishwasha (125561) on Friday April 16, 2010 @03:44PM (#31876022)

    How about you sell more database licenses because your users don't have to spend part of their budget on OS licenses?

  • by greed (112493) on Friday April 16, 2010 @03:46PM (#31876046)

    I'm curious as to why a company would spend a lot of money making something that other people will give away for free.

    It had better be really special.

    My experience in software houses over the last 20 years suggests that they are opposed to letting customers see their source code because then customers will know, beyond any doubt, that they have been thoroughly fleeced. If the vendor delivers binaries only, at least there's still the possibility that the code is good quality, cleverly engineered, or whatever they're convincing people to pay for.

  • No. its YOUR job. (Score:5, Insightful)

    by unity100 (970058) on Friday April 16, 2010 @03:49PM (#31876082) Homepage Journal

    no exaggeration and no offense here. we are the community. users, developers, evangelists etc and so on. we just make a software/framework live by developing, adding to it, supporting and using it, or we leave it and it dies.

    its not our job to make it profitable for you or teach you. you are the private company that seeks to profit. its your job to find ways to profit from it without offending us. think of us as 'the people', the public.

    if you upset us, we will fork something and get behind it and it will take off.

  • by Anonymous Coward on Friday April 16, 2010 @03:49PM (#31876092)

    If they are looking for potentially equally profitable or just profitable. Even a 3rd grader could make a convincing case for the latter.

  • by Stumbles (602007) on Friday April 16, 2010 @03:50PM (#31876100)
    They only need to look towards Red Hat. If Oracle cannot figure it out, then they need to close their doors. It is not the open source arenas responsibility to make Oracle profitable. Now if Oracle wants to hire me at oh, I dunno $500,000 a year plus perks, then I will teach them, till then they have done nothing but issue a threat.
  • by jamboarder (620309) on Friday April 16, 2010 @03:51PM (#31876110)
    yes
  • Re:IBM (Score:2, Insightful)

    by Anonymous Coward on Friday April 16, 2010 @03:51PM (#31876118)

    Yes, open source software is very profitable for IBM to get you in the door so they can get you to upgrade to their closed-source systems later on

  • Grandstanding (Score:5, Insightful)

    by watanabe (27967) on Friday April 16, 2010 @03:52PM (#31876132)

    Larry knows exactly how to make money; he is probably the world's best businessman at holding you upside-down and shaking you vigorously until your pockets empty.

    I would be stunned if Oracle ever comes out with a credible OpenSolaris strategy -- it's not Oracle's way, nor is it in their best interests to have a vibrant opensolaris community. Unlike Linux, the best parts of Solaris have never come from outside Sun. Dtrace, ZFS, integrated hardware, all this stuff is where Sun's real value lay.

    The end game for OpenSolaris began when Sun moved ahead with the merger. From then until the official end is just drama, positioning, etc.

  • by chance2105 (678081) on Friday April 16, 2010 @03:54PM (#31876156)
    From earlier in the conversation: http://mail.opensolaris.org/pipermail/ogb-discuss/2010-April/007700.html [opensolaris.org]

    "(The following message is wholly my own, and doesn't represent anything from Oracle. While I'm an Oracle employee, I have no special privileged information or insight beyond what is already common knowledge.)"

    This could be a random guy stirring the pot. What do we have to actually think management might ditch opensolaris?

  • by Anonymous Coward on Friday April 16, 2010 @03:56PM (#31876168)

    I've never understood why one's own reading comprehension problems are worth posting about.

    Up your font size.

  • by InlawBiker (1124825) on Friday April 16, 2010 @03:56PM (#31876172)

    Oracle is free to conclude that closed-source software makes them way more money. So they shouldn't be surprised in "X" years when open-source databases that are just as good as Oracle are available for free. I think they call this "being SCO'd." How many more companies will hamstring themselves by not looking more than 2 or 3 quarters into the future?

  • by spazdor (902907) on Friday April 16, 2010 @03:57PM (#31876184)

    Really, the time to deliberate about whether open source projects can be profitable, is before you buy out a bunch of open source projects.

  • by clarkkent09 (1104833) * on Friday April 16, 2010 @03:59PM (#31876220)
    Oracle wasn't asking slashdot for advice on how to make open source profitable. It was asking the developers whose salary it pays to convince Oracle that that salary is worth paying. It is perfectly normal for a company to require the management of unprofitable product lines to provide a plan on making their products profitable in the future.
  • Re:Not from FOSS (Score:5, Insightful)

    by TheSunborn (68004) <tiller@d[ ]i.au.dk ['aim' in gap]> on Friday April 16, 2010 @04:02PM (#31876258)

    But both those examples show what the open source business model is. Support other peoples open source software and use it to sell complete solutions to your customers.

    I mean less then 1% of the source code that Redhat supports and use are written by people paid by Redhat.

    The problem for Oracle here is that they can't do the same with Solaris, because they write most of the code themself, and if they don't write it, nobody else will.

  • by zx75 (304335) on Friday April 16, 2010 @04:06PM (#31876318) Homepage

    Umm, if I am a customer buying a software product I do not care if the code is good quality, or cleverly engineered, as long as it doesn't impact the cost, security, or usability of the product.

    All I care about is whether or not it works and meets my needs.

    I am saying this as a consumer (end user), producer (developer), and requirements creator (analyst).

  • Re:Seriously? (Score:4, Insightful)

    by SQLGuru (980662) on Friday April 16, 2010 @04:06PM (#31876328) Journal

    Share price means less than market cap.

    Oracle - 130.25B
    Red Hat - 5.87B

  • by FudRucker (866063) on Friday April 16, 2010 @04:08PM (#31876346)
    the OS that runs the app is somewhat important in that it needs to be secure and stable, but it is the application on top of the OS that sells, if Oracle can sell a complete solution - in this case a Linux distro with Oracle's database software on top and include service & support, maybe even include remote administration by authorized Oracle IT staff if that sells the product. (i knew SSH would come in handy someday)
  • Re:Seriously? (Score:3, Insightful)

    by GlassHeart (579618) on Friday April 16, 2010 @04:09PM (#31876368) Journal
    ...except the part that actually makes money: search.
  • by fyoder (857358) on Friday April 16, 2010 @04:11PM (#31876390) Homepage Journal

    If I was a girl browsing slashdot and thinking about creating an account, you would've just changed my mind for me.

    And if I was a female coming across this comment by a guy with presumption to speak on behalf of all women (or "girls"), I would be pretty turned off as well.

    Oops!

  • by DAldredge (2353) <SlashdotEmail@GMail.Com> on Friday April 16, 2010 @04:12PM (#31876406) Journal
    It is somewhat hard to pay the power bill and your employees with "benifits to society"
  • Enabler (Score:4, Insightful)

    by 99BottlesOfBeerInMyF (813746) on Friday April 16, 2010 @04:14PM (#31876422)

    Open Source software is profitable in much the same way owning a parking lot for your business is profitable. It enables you to do business more cheaply and flexibly than the other options.

    Open source software works great when it is not your core competency. For example, if you make hardware appliances, Linux is a great, free commodity OS you can use. Hiring some people to develop it, customize it, and fix bugs in it is much, much cheaper than writing an OS from scratch or licensing one. If you sell computing services, OSS is a great resource because it enables you to deliver those resources more cheaply and if you combine either of the two previous markets with custom hardware or software you do develop and which is your core competency, you can undercut pretty much every other business model.

    I don't even know why I'm repeating this here. Literally hundreds of companies (I've worked for four myself) rely heavily on OSS development to make money and have been doing so for decades now. If the brilliant business minds at Oracle can't wrap their heads around this problem then they have bigger concerns than what to do with Sun's OSS assets... like how to fire all the idiots who somehow graduated from business school.

    OSS is great way to cut your own costs by getting others to do work for you for free and make money in other markets.

    So unless you can figure out how having OpenSolaris running on millions of devices everywhere ultimately translates to revenue, I doubt Oracle mgmt will be impressed.

    Umm, does Oracle use OpenSolaris themselves for their workstations and servers both internally and for sale? If so, then having OpenSolaris on millions of devices means you get free bug reports and fixes for your OS from some subset of those millions of people. That's free labor.

    If you don't monetize something somewhere, then it doesn't really help if OpenSolaris is used everywhere. In fact, it hurts. Because you spend more time supporting and debugging things that are not necessarily supportive of your own priorities, and are not generating revenue.

    Wait you're spending time fixing bugs you don't care about and supporting the OS for free? Why? Why not just fix the bugs you do care about or which people are willing to pay you to fix and let other people handle the rest of the bugs if it bothers them? That's how Linux works, why not OpenSolaris?

    Show us a plan for how that will ultimately generate revenue for Oracle?

    Umm, you don't have to pay software licensing costs, you get bug reporting and work on the project from others for free, you can charge people support fees if they want you to do any work on it, if they don't want support it costs you nothing. How is this not a win? And what is your alternative? Pay Microsoft licensing fees? Drop OpenSolaris and switch to Linux then spend you money trying to port the features you need from OpenSolaris to Linux? Close source OpenSolaris and try to get people to pay you when they can just use Linux instead (or Windows or OS X)? Those are the three options I see and I'm sure your guys will do a thorough cost benefit on them all because they're not morons... right?

  • by Anonymous Coward on Friday April 16, 2010 @04:14PM (#31876424)

    Unless you're not really buying them for the open source projects... Oracle got the open source projects as an aside and now they're trying to figure out what they're going to do with them.

  • Re:Seriously? (Score:3, Insightful)

    by Americano (920576) on Friday April 16, 2010 @04:16PM (#31876464)

    Some might argue they are doing better than Oracle.

    Yes, some might argue that. And those people would be idiots.

    Profit Margins, Revenues, Market Capitalization, Earnings, P/E Ratios, Earnings per Share, Revenues Per Share, Cash Flow, and most other measure of the "success" of a company are all significantly higher for Oracle (ORCL [yahoo.com]) than they are for Red Hat (RHT [yahoo.com]).

    Is Red Hat profitable? Sure. But they're not anywhere near as profitable or successful as Oracle has been, and claiming that a higher share price constitutes evidence that one company is "doing better" than another is foolishness of the first order.

  • refocus (Score:5, Insightful)

    by bcrowell (177657) on Friday April 16, 2010 @04:16PM (#31876466) Homepage

    I just had the experience of starting up my recently upgraded copy of openoffice on my linux box and seeing an oracle logo in the startup window. Feels kind of strange, like having your mom's underwear mixed in with your girlfriend's in the laundry basket.

    I realize that TFA is about OpenSolaris, but when it comes to mysql and openoffice, it's always seemed to me that the only real reason those projects received so much attention over the last decade was that they got there first-est with the most-est. It's not like mysql is the only OSS database on the market, or the best technically. When it comes to openoffice, I'm getting kind of tired of having to apologize for it. It just isn't a very good office suite in terms of usability, quality, or features. And it's an infamously unhealthy OSS project in terms of the ugliness of the codebase and the lack of success in working with developers outside Sun/Oracle.

    So maybe it's a good thing that Oracle bought Sun, because it will allow the OSS community to step back and reassess their focus. Competition is good. It's not healthy that the OSS world has drifted into a near-monoculture of mysql and openoffice.

  • by fusiongyro (55524) <faxfreemosquito AT yahoo DOT com> on Friday April 16, 2010 @04:19PM (#31876520) Homepage

    The problem here isn't that open source isn't profitable, it's that it isn't Oracle profitable. Oracle is the essential part of the problem here, and to answer directly is to miss the point.

    We solve this not by huffing and wheezing about how great open source software is. We solve it by proving that we don't need closed source software, that giants like Oracle are unnecessary and useless. We solve it by using PostgreSQL and MySQL, by using Linux (and maybe Open Solaris). We solve it by publicly mocking anyone who spent the money on Oracle, finding security holes in Oracle, and generally making it unpleasant to be an Oracle customer, which won't be hard because of the great head start Oracle has on that.

    We don't have to justify our existence or our way of doing business; they do. And they're doing a great job of pissing off their loyalists. IBM was once this proud. Look at them now. The same thing can happen here, we just have to refuse to put up with it.

  • by bl8n8r (649187) on Friday April 16, 2010 @04:20PM (#31876528)

    I've seen the costs of Oracle's licensing. They don't want profit, they want a guaranteed user base - just like every other megacorp on the planet. The only way to guarantee a user base, even when you product is shi^H^H resource intensive, is to either distribute complementary kool-aid, or make sure the user base cannot switch to a competing product.

    Oracle does not want profit, they want profit with a guarantee.

    As far as opensolaris, mysql and the rest of Sun's opensource projects go, well that's just the way the cookie crumbles. When a corporate buyout happens, there are no guarantees about current products whether proprietary OR OSS. If a product doesn't fit a companie's vision they axe it.

  • Re:IBM (Score:5, Insightful)

    by mweather (1089505) on Friday April 16, 2010 @04:21PM (#31876558)

    Yes, open source software is very profitable for IBM to get you in the door so they can get you to upgrade to their closed-source systems later on

    It's a strategy that makes open source profitable. Either you sell support, or you sell a value added proprietary version.

  • Re:IBM (Score:2, Insightful)

    by alexborges (313924) on Friday April 16, 2010 @04:22PM (#31876568)

    I think you are thinking about software in general. Not all software is profitable. Actually, most isnt. And the state of its license and source has little to do with that.

    Marketing, actually solving a problem important enough for enough people, thats what brings in profitability. Its the same for any market...

  • by tepples (727027) <tepples@nOSpAM.gmail.com> on Friday April 16, 2010 @04:27PM (#31876650) Homepage Journal
    Poor-quality code is less likely to work and meet your needs when the quality affects the cost and the reliability of the product. If the code is inefficient, you need to buy more hardware and more copies of the product. If the code has significant defects, the defects could compromise availability, consistency, and durability of the data that the product maintains.
  • by DrgnDancer (137700) on Friday April 16, 2010 @04:32PM (#31876746) Homepage

    The problem with this statement being: Oracle doesn't care. They are asking the "community" to prove that the software can be profitable, because it's in the "community's" interest for Oracle not to abandon the software. Open Solaris is likely to simply disappear without Oracle's support. A good portion of it's developers work for the company. I don't know what the numbers are, but most estimates seem to hover around "almost all of them". It could be forked, sure. Assuming you can find enough strong developers to get behind yet another Open Source operating system. More likely it will die. In which case the "community" of its users suffers. Hence they have a vested interest in helping Oracle find a business model.

  • by NormalVisual (565491) on Friday April 16, 2010 @04:33PM (#31876768)
    Oracle is far and away more profitable than Red Hat will likely ever be, so I'd say they have a pretty good handle on the general process of turning a profit. What they're looking for is a means to turn the open source products they inherited from Sun into something profitable. If they can't, then don't be surprised if those products vanish, or if you have to write a check to get a copy in the future.
  • by CohibaVancouver (864662) on Friday April 16, 2010 @04:47PM (#31876970)

    Money money money. This is what Larry cares about and NOTHING else

    Yeah, cause, I'm sure the Oracle *employees* and shareholders who are trying to, well, you know, pay mortgages and feed and clothe their children and other selfish stuff like that don't give a rat's @ss about money.

  • Re:IBM (Score:3, Insightful)

    by LoRdTAW (99712) on Friday April 16, 2010 @04:47PM (#31876984)

    Open source can be very beneficial for companies that also provide closed source. For Oracle, Open Solaris benefited Sun by exposing a larger audience to Solaris. If Open Solaris was never released I would have never had a chance to use it at home. And the more exposure an OS has the better chance it has to be improved upon and attract developers to the platform. A completely closed OS that is only sold with vendor hardware creates a very costly investment and steep IT requirements. It also prevents budding IT folk from ever getting a chance to use and learn your equipment. Instead they have to invest in training that costs a bundle that some (or most) might not be able to afford which shrinks the available talent pool. Then companies who are looking to upgrade or expand their IT department are left with the decision to go with a very costly propriety vendor or go with a more open platform to work with.

    I think Oracle is stuck in the early 90's when big Unix vendors were raking in tons of cash because PC hardware could not handle enterprise IT demands. Those days are over. The recent buyout of SGI and failing of Sun should have been a big enough sign of the times. Sure HP is still making some specialty stuff but they have a huge presence in the consumer, small, medium, large and enterprise PC market. They keep around the HP-UX, Itanium and PA-RISC stuff because some companies just wont let it go and it still makes them some money. And when the demand for the specialty dries up, they give it the ax and its no big loss for them. Sun on the other hand only catered to large business and that dried up as big IT moved to cheaper Windows or Linux platforms. Even though Windows itself is closed, its still way more open than Solaris is.

    So all I have to say to Oracle is good luck, your going to need it. And I hope Open Solaris and Virtual Box (and Virtual Box OSE) are not killed off.

  • by JonJ (907502) <jon.jahren@gmail.com> on Friday April 16, 2010 @04:49PM (#31877024)
    No one has disputed that, however. Red Hat _is_ profitable, and your point is somewhat... Missing. Add to the fact that Red Hat had to attack a market where Sun, IBM and Microsoft had the stronghold and that they are profitable and growing, just shows that free and open source software is indeed profitable. No matter how you spin it, Red Hat is profitable, even if Oracle is more profitable, at the moment.
  • Re:Really? (Score:2, Insightful)

    by gdamore (933478) <garrett@NosPAM.damore.org> on Friday April 16, 2010 @05:05PM (#31877262) Homepage
    You sir, are correct. The opinion was my own, and even as such was horribly misrepresented here without any context. I never suggested an Open Source strategy was in question, only that Open Development was questionable.
  • by elnyka (803306) on Friday April 16, 2010 @05:15PM (#31877366) Homepage

    If they are open source (and GPL licensed), the worse that could happen is they cease to code for it and turn the rest of the developers to other projects. The open source portion could then be forked and taken over by others who see the value Oracle missed. Obviously it presumes GPLd code which isn't probably the case here.

    Unfortunately, that will be a big bleed for those projects because, when under Sun, there were people hired, paid and on payroll (with benefits and all the nine yards) for working on those projects (which they did full-time and more.)

    The possibility of losing that kind of man-hour man power is a biggie for an open source project.

  • by loufoque (1400831) on Friday April 16, 2010 @05:29PM (#31877516)

    That's why you shouldn't settle down and get engaged for a lifetime with a mortgage and children.
    What happens to your ambitions, your beliefs? They all get crushed by the need to get shitloads of money at the end of the month.

  • Prove it? (Score:2, Insightful)

    by mysidia (191772) on Friday April 16, 2010 @06:00PM (#31877822)

    Why the hell did you make a Linux distribution (Oracle Enterprise Linux), buy MySQL and a company that developed Open Source software such as Java and OpenSolaris, if you didn't think Open Source was profitable?

  • by farble1670 (803356) on Friday April 16, 2010 @06:02PM (#31877854)

    around 5 years before their demise, sun mandated that all* their software would be open source. they were almost there at the time of their demise. sun software was the last thing you would call closed source. as much as it hurts, sun was open source in a way unparalleled in the industry. it didn't work.

    *there are of course exceptions

  • by TheRaven64 (641858) on Friday April 16, 2010 @06:38PM (#31878324) Journal

    Oracle is looking to supply the whole stack to its customers

    And this really ought to be the answer to the original question. If Solaris remains open, then other people will spend time finding and fixing bugs. Maybe not many, but some. They may also contribute things like drivers for hardware that Oracle wants to support in future. This lowers the total cost to Oracle of developing OpenSolaris.

    They really should take a look at Apple's business model. Apple sells a complete stack, but they open source anything that they don't consider to be part of their core business. This includes the kernel, libc, HTML framework, compiler, and so on, but does not include the things that define their product to their customers. They don't do this out of any desire to give back to the community, or out of any ideological motivation, they do it because it lowers their overheads, which increases their profit margins.

  • by jeko (179919) on Friday April 16, 2010 @07:03PM (#31878562)

    I realize Poe's Law addresses fundamentalists -- roughly stated, "It is impossible to distinguish between sincere Fundamentalists and Parody of them" but we need a more general law of that special case to describe your post.

    You should forgo roots, stability and long-term relationships -- i.e. your life -- to further your company's aims -- aka your career ambitions.

    The sad thing is I can't tell if this is tongue-in-cheek or not.

  • by walterbyrd (182728) on Friday April 16, 2010 @10:18PM (#31879864)

    Consider how msft works. One msft product makes it necessary, or at least expedient, to get another msft product. To run the latest ms-office, you need ms-windows. To get all the features out of Outlook, you have to have Exchange. You can load certain websites without msie, which means you need windows. Why do you think msft is desperate to lock everybody into OOXML? Msft has always followed the strategy: "control the standard, and the money will follow."

    Stop important F/OSS projects, and you hurt F/OSS. Maybe more people will use windows-server, and maybe ms-sql will run better on windows-server than oracle.

    Why do you think Google and IBM support F/OSS so strongly? It's a standard than can, to some extent, keep Microsoft from having an even stronger monopoly.

  • by tyen (17399) on Friday April 16, 2010 @10:38PM (#31879962) Journal

    At this point what's to tell Oracle that Solaris is better than Linux, because, I'm not sure they're convinced?

    For my company, one acronym: ZFS. We're going to start clocking into petabytes of storage within a year, and right now we're handling the tens of terabytes of storage under Solaris with a basic support contract so I could pick up the patch updates and email with the odd, once-a-year problem I couldn't solve myself. I'm shudder to think of the supporting the same scale with any other filesystem; ZFS has seriously saved our asses several times now with just its scrubbing feature.

    Oracle's new licensing policy has now put us into a bind. We now have to pick up Oracle Sun-branded hardware, plus the hardware support contract, plus the Oracle Premium software service plan. Then re-integrate the hardware with our existing configuration, possibly picking up new controller cards. Our carrying costs per year for choosing a Solaris-based solution just jumped an order of magnitude.

    The only reason we haven't started planning a move to FreeBSD 8.x is because FreeBSD ZFS doesn't yet support iSCSI (because FreeBSD doesn't have an iSCSI target yet). ZFS just got hella more expensive.

    Considering Apple's silent dropping of ZFS, I take it as a sign that in the future ZFS development will likely clam up to just Oracle Sun Solaris. Thus, we're going to follow Apple's lead and start testing ext4 under Linux (we first came to ZFS from ext3). I like ZFS, but not enough to justify a 10X cost difference unless there is simply no other way to hold petabytes off a single server.

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