Analysis: whether open source is a bubble or a cash tree _ MySQL

Author: Fang Kai [eNet] the open source business model is booming in the software industry, and the development momentum is so prosperous that some experts suspect that it is a broken bubble. Some industry officials warned at last week's open source code business conference that venture capital companies are currently investing more and more money in open source code enterprises.

[ENet] open-source business models are booming in the software industry, and the development momentum is so prosperous that some experts suspect it is a broken bubble.

Some industry officials warned last week's "open source code business conference" that venture capital companies are currently investing more and more money in "open source code" companies, this may cause investment bubbles similar to those in the early stages of Web development.

Industry officials said that to make the business model of "open source code" run normally, enterprises must have a lot of quality different from the closed source software company, in particular, we need to effectively combine the pursuit of profit with the open-source project community. Analysts and officials pointed out that not all open source companies can strike an appropriate balance between business and community.

David Skok, a general partner of Matrix Partners Venture Capital, said many open-source companies that are currently established are not actively involved in the community. Without the rapid establishment of a zone, these companies will soon consume venture capital, which is a disaster.

Open-source companies usually release open-source software to potential customers free of charge, and then sell upgrade versions or provide support services to users for profit.

In the past two years, a large number of companies have chosen similar business models to catch up with mainstream software vendors, and their venture capital is accelerating.

According to data released by the American Venture Capital Association, PwC international accounting firm, and Thomson Venture Economics, as of the end of September this year, open source software companies have invested $0.144 billion in venture capital, which is more than doubled in the year of last year. Conservative estimates show that in the first three quarters of this year, the number of open source code companies established increased from 12 in the same period last year to 18. According to industry insiders, XenSource is the most likely venture capital this year, reaching $23 million. Last month, SugarCRM ranked third with $18.7 million.

'The attractiveness of open source software comes mainly from enterprise customers, 'said Poles, CEO of SpikeSource, an open source software vendor. For this reason, she believes that open source software is showing a healthy development trend, rather than a bubble. the open source software business model has a huge demand.

Industry experts said there is enough reason to believe that if enterprises do not use open source code, they may not be able to operate well, which means they urgently need to adopt open source code business models.

The open source code model has been firmly rooted in the software industry. In addition to small startups, major software vendors, including from IBM to Microsoft, are also attempting to leverage open-source products or replicate the collaboration methods they use during development.

But David Skok, a general partner of Matrix Partners Venture Capital, said the open source software business model was also restrictive.

David said that he recently invested venture capital on a smart startup company. One problem with the company is that there is not a large open source community behind it. Industry insiders said that a strong user community can provide patch software or provide feedback on desired features. More importantly, positive user communities help to sell products and services that can bring profits. Through free distribution of entry-level products, potential customers can try out the software without lengthy sales processes, which can greatly reduce the sales and marketing costs of software vendors.

John Roberts, CEO of SugarCRM, was outspoken. SugarCRM did not hire direct sales staff with high salaries, and its open source software users were the main sources of sales revenue. He added that low marketing and marketing budgets allow them to transfer funds to technical aspects.

In this way, there is a drawback. if a group of active users switch to another product, open-source companies may be adversely affected, said Winston o Damali, CEO of Gluecode.

Other aspects of the open source code business model also have problems. Analysts pointed out that if a company relies entirely on service sales revenue, it needs to have a large number of customers. In contrast, even if few customers sell high-priced products, proprietary code software companies can survive.

Andy, CEO of mongoisedb, an open-source database software vendor, said there are many open-source business models, each of which is under exploration. As with JBoss, relying only on business models that support services is a dangerous model.

EnterpriseDB's model is to "use open source software", rather than the annual support service fee for free products as many companies do. The only difference between this mode and non-open source code companies is that EnterpriseDB builds services around PostgreSQL open source database.

Bill, a partner at Goodwin Procter law firm, said the release of source code has brought "inherent risks" to business models ".

Despite these risks, open-source software represented by Linux has taken root in enterprise data centers. Currently, customers also use other open source software, such as databases, middleware, and complete sets of software.

Informa, an information service company, has decided to use Alfresco Software's open-source content management system. the Software itself uses many open-source Software and frameworks, such as MySQL databases, Hibernate, and Spring.

Bob Hecht, deputy manager of the information decision-making department of Informa, said, "the Alfresco system provides

A standardized Web directory management system meets the needs of most companies, and its sales price is lower than the current product price. "

For this phenomenon, Ron Rose, chief information officer of Priceline, said that enterprises are already inclined to purchase products that use open code for economic benefit, the large-scale open source code community behind open-source products ensures the long-term development of this trend.

Schnoor of Goodwin Procter law firm attributed the great interest caused by open-source software to the powerful existing technical background, such as Web. The "open source code" business model is likely to cause a surplus of free product providers. he hopes more companies can join the "open source code" group. In short, "open source code" is the most significant highlight of all important changes in the software industry.

Schnoor said: Are there more innovations and changes on the road of development? This is for sure and is always happening.