More investment flows into open source IT management companies

mberkay — Wed, 23 Jan 2008 17:31:39 GMT

OMC member Zenoss has just announced $11 million new investment so congragulations is in order.

Tarus of Opennms has a blog post where he somewhat criticizes the VC financing of Zenoss, Hyperic and Groundwork. The post reads as an attack against these open source competitors (though Tarus does say that it isn't), and I felt compelled to comment on some of the memes in this post as I saw them elsewhere before. To get it out of the way, I don't have any kind of relationship business or personal with Hyperic, Zenoss, Groundwork or OpenNMS.

"Since we are trying to position OpenNMS against products like Tivoli and OpenView, they really aren’t who we are trying to compete against, and since we don’t have millions of dollars in investment it could come across as if I was a big whiner, boo-hooing about our poverty."

Like it or not, OpenNMS is competing against other open source IT management players. Customers decide who the competition is and the "Little 3" are competition for OpenNMS as much as Openview or Tivoli, may be more so. Tarus's statement seems to be more of a "desire" than fact. Implication that they are not open source enough, because they have some proprietary components and OpenNMS is the only "true open source" project is all over the post. Not the first time I saw this type of mud slinging.

Companies have to find a way to make money, and nothing wrong with having an enterprise version. It is in the interest of their community for them to be successful so that they can continue to develop the open source solution. Their open source versions stand on their own and welcome contribution to the field. If people decide they are not, they simply won't use them.

What is open source now will stay open source by definition and even if they stopped developing the open source parts, someone else can always continue. From what I understand this is sort of what happened with openNMS (someone else continuing part)?

"they accepted some VC funding, developed some code, and released it on Sourceforge. They were promptly sued by their board to the tune of US$50 million for releasing trade secrets."

So some VCs did some really bad things. All VCs are evil anyway, hence companies (Hyperic, etc.) took VC money are tainted? Tarus would only take money from investors who "shared his vision" but they took money from the dark lord, so they must have sold their soul. The fact is, we don't know what conditions they took the money, or what they plan to do with it. This is pure FUD. Not cool.

"So how will such a project respond to a user who implements the “enterprise” functionality as open source? I don’t think they could accept the code and commit it while at the same time satisfy shareholders who expect software revenue. They’d have to make up some excuse about why they couldn’t commit it, and unless the independent community was strong enough to fork the code, nothing would change."

This is ill informed speculation at best. The model for contributions is established in several projects, including MySql. A recent example of it is between Google and MySql, where Google donated significant chunks of code to MySql. If someone wants to contribute they don't have to make any excuses. They just have to sit down and make a deal.

"I have to wonder. If acquisition is the main exit for these companies, why would someone like IBM or Sun want to pay US$100 million or more when they could pick up, I dunno, something like OpenNMS for half that? (grin)"

The answer is simple: same reason why Sun acquired MySql and not PostgreSQL. The one with the biggest community and largest customer base wins. If Zenoss or Hyperic manage to get 10 times as many customers as OpenNMS, IBM or someone else may be willing to pay many times more to acquire them as Sun did with MySQL. Also note that, MySql "owns" its products just like Zenoss and Hyperic. AFAIK no one owns OpenNMS so it can't be acquired.

We need more business models that make open source viable, not less. More ways to attract investment, not less. Throwing mud at other business models is simply not productive, and not a good way to compete.

Expositus Procuratio

More investment flows into open source IT management companies