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Saturday at Linux Expo

OK, this isn't Saturday, but I finished out Friday with John Paul's keynote speech. John Paul was a vice president at Netscape, and is now thus a VP at AOL instead.

Most of the talk was a fairly straightforward presentation of what AOL is up to. He talked of the value of the traditional AOL service ("you probably don't use AOL, but your parents do" - applause), but pointed out that traditional AOL users are home-based, access the service mostly in the evening, and that usage of AOL varies greatly depending on what is on the television.

Thus the acquisition of Netscape - Netscape's users are often business people, and are usually active during the day. By picking up Netscape, AOL has extended its reach to a new group of users.

Mr. Paul had a few observations and predictions for the future:

  • One of the big opportunities for Linux will be in the embedded systems area. Lots of things are happening in that realm, and there is a real reluctance to use Windows CE. Linux could own that market.

  • Proprietary Unix systems will soon die. There is "no value" in proprietary Unix at this point.

  • The advantages of Linux are: momentum, provision of control to users, network effects, economic competitiveness, and robustness. All of them matter greatly. Momentum, in particular, should not be discounted, and needs to be preserved.

  • Places where Linux should be pushing: high availability, scalability, and embedded systems.
There were no questions after this talk.

 

Unfortunately, iI had to catch a plane in the early afternoon, and missed much of the Saturday events. That means, among other things, that I missed much of the Extreme Linux track. Sigh.

I had a good talk with Scott McNeil and Bodo Bauer of Zenguin. They are out to change the way software is distributed and installed; please see The Day of the Zenguin for a description of what they are up to.

 

Perhaps one of the best sessions of the show was Paul Everitt's talk entitled "Funding the perfect beast: open source, venture capital, and intellectual property." Paul is the president of Digital Creations, the company behind the Zope web application environment. Zope has been released under an open source license, following the advice of Digital Creations' venture capital firm; see our December, 1998 story on Zope for the full scoop on all that.

Paul started off asking how many people thought that companies like Microsoft or Oracle were a threat. A large part of the audience raised its hands. He then responded that such concerns were misplaced, that it is a big mistake to focus on those companies. He proposed what appears to be a variant of Godwin's law: as soon as somebody mentions Microsoft, logic is suspended for the rest of the conversation.

It is better, says Paul, to focus on helping your friends, not attacking your enemies. And besides, nobody will ever finance a business plan that involved fighting Microsoft.

So why should open source companies go for venture capital financing? Paul had a number of reasons:

  • Credibility: having venture capital greatly increases the chance that other companies will be willing to bet on your products.

  • Networking: venture capitalists have all kinds of contacts which become available to you once you are under their umbrella.

  • Guidance: venture capitalists also have a lot of experience which can be brought into your decision processes.

  • Stability: not having to worry about making payroll for a while can do wonderful things for a growing company.
Paul also made the point that open source software and business really do belong together. The notion that open source software should be done on a volunteer, hobbyist basis is fundamentally anti-family, and programmers should get a share of the wealth that they are creating.

About the decision to release Zope as an open source system: for Digital Creations (and their customers), the ability to create Principia (Zope's proprietary predecessor) was far more important than Principia itself. It is the ability that they are selling. The goose is more important than the golden eggs that it lays. Opening up the software allowed them to concentrate on selling that which really makes them money: their engineering capabilities.

Paul also pointed out that working in the open source mode has made hiring much easier. Digital Creations can not only hire top-quality engineers easily, but they tend to come in already knowing all about their platform.

The talk finished with a few pointers for people wishing to run an open source business:

  • Have a killer idea and a lot of passion, and everything will work out fine.
  • Know how you will make money. It is not sufficient to just put something out there and hope for the best.
  • Get financial backing from somewhere.
  • Learn how to put a value on your own company; don't trust others to tell you what your company is worth.
When asked whether opening up Zope had had the desired effect on business, Paul answered "indisputably." They are now able to bid for projects against large players that were previously inaccessible to them.

The slides for this talk have been posted.

--jc

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