Eclipse, Open Source, Wall Street and Competition: Big Drama, Big Money

Brent Williams (The Benchmark Company, LLC.

Benchmark is a large boutique (or, small full-size) research and trading firm based in New York, with offices in Boston, San Francisco, Princeton and San Diego.)

Business · Long Talk
Presentation
Tuesday, 15:30, 50 minutes | Room 206 | Download in iCal Format

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Brent Williams

In this presentation, we’ll take another look at where open source, particularly Eclipse, intersects with the world of business models, investments, and politics. We’ll look back at 2007’s developments and look at opportunities in 2008 and beyond where Eclipse and other open source projects can be increasingly disruptive. As in past years, we'll take no prisoners, pull no punches, leave no joke untold, and we'll work hard to give you actionable insight that you can use in formulating your strategy for Eclipse success.

Looking back at 2007, the proprietary software world had a pretty good year. Several trends drove tremendous investment returns: the rise of Software-as-a-Service application platforms (Salesforce.com, Facebook, Google Docs, Microsoft Live) and the staggering success of the VMWare IPO on the back of the rapid growth in the virtualization market. On the dark side, several key open source opponents modified their attack, to try to take the battle into areas where they believe the open source model in general and specific communities are weak. One case in point: the patent saber-rattling from Microsoft, where it claims that Linux infringes 235 patents, an attempt to spread fear, uncertainty and doubt among Linux buyers (a campaign that hasn’t slowed Linux momentum significantly). We also saw Oracle’s attempt to provide cheaper support of Red Hat’s Linux distribution just before the start of 2007 bear little fruit, despite the supposed value of Oracle’s enormous support organization (and a late 2007 attempt to do the same thing with virtualization). Also, we saw Microsoft try to “stuff the ballot box” in pushing its alternative to the open source ODF file format, in an attempt to negate the value of open standards.

We see a single common thread in these competitive attacks and in these open source successes: organizational scalability. Ironically, though open source opponents see this as a weapon they alone wield, it’s actually an area where open source development communities may be inherently stronger than proprietary vendors.

In this presentation, we will look at the idea of organizational scalability and how Eclipse can use it in 2008 and 2009 to expand the benefits it delivers into new areas dramatically, following success at broadening beyond its classical Java application development roots. One key area is using scale in driving standardization into areas where it has been underused in the past, particularly in industry-wide vertical market application platforms. Another is to provide deeper platform implementations that Eclipse members can use to get products to market faster. A third is to resolve the intellectual property battles once and for all, removing it as a customer buying concern.

The end result of understanding how the Eclipse world can leverage organizational scalability in 2008 and 2009 could be the start of another dramatic expansion in the role of Eclipse, enabling it to become the standard solution approach for entire new classes of problems. We’ll conclude by looking at how this could change the investment landscape for Eclipse-related vendors in particular and technology companies in general, potentially increasing the rewards that open source vendors may be able to reap.

Brent Williams co-heads equity research at The Benchmark Company. Mr. Williams has been a stock analyst covering publicly traded software companies (including Microsoft and several key Eclipse Foundation members) for ten years. Just before moving to Wall Street, he covered software development tools at Gartner Group, and ran the operating system/desktop applications group at IDC. He has also been involved in marketing and selling infrastructure software at several startups. He spent nearly a decade as a C programmer, including five years working on database engines at Ingres in the 1980s.

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