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EOS Editorial — The End of an Era
How software-as-a-service and open source are reducing our licensing costs

The other day I was driving down the highway when I passed an American classic, a 1965 Ford Mustang. As I waxed nostalgic, I realized that there will never be another era in history where we will appreciate automobiles like those produced in the 1950s and 1960s. No matter what their merits, I don't foresee automobile aficionados 50 years from now tooling around in a Toyota Prius, Honda minivan, or any of today's plastic-covered modes of transit.

This realization saddened me to a degree. I spent the years up to my 16th birthday in my father's car dealership admiring these gas-guzzling steel monsters. At the same time I had my first dedicated access to a computer, a 286 model that was used to keep the accounts for our swipe-card gas pumps. It was a time before Microsoft Windows, and computer users were in a minority in comparison to automobile drivers.

Times have changed; the golden era of the automobile has passed. Today I would suspect that there is more parity in those who own an automobile and those who own a computer. Now we are paying for the smog-spewing sins of our past as we look at more efficient economy cars and those powered by hydrogen cell batteries. I think the time is coming for software companies to pay the piper too. They have delivered for too long their own brand of inefficient product at a premium price.

During the past 20 years, I also observed another evolution. While car companies have seen many ups and downs, information technology companies have grown into huge multi-national corporations that have dwarfed the car manufacturers. For example, Microsoft has a market cap of over $310 billion while Ford Motor Company is somewhere between $14 and $15 billion.

Just as the auto manufacturers have seen their best years come and go, I believe that software companies like Microsoft and Oracle are part of an era that has passed. These companies have risen to become industry leaders as the PC desktop and the server has become omnipresent. They have benefited from a model where you build software once and sell it millions of times over. There was nothing wrong with that either as long as the market would bear it. For these to continue their leadership roles, they will have to adapt.

That industry is changing. Consumers of technology are getting smarter, more demanding, and value-conscious. There are too many choices for the software users to be held hostage by one vendor. The new "software" giants like Google offer hosted software and services to millions of users every day, compensated not by users but by advertisers. The reason they have been able to scale is an infrastructure built on open source and customized to their needs. Six years ago I would have asserted that Yahoo! had already won the search engine race, but Google provides evidence that there is still plenty of competition for the number one spot in that industry. Salesforce.com evidences another business model where users don't pay for software but subscriptions for software that they "rent" for a period of time. Their success probably gives the folks at Seibel heartburn. The former has a market cap of $156 billion and the latter almost $5 billion. These are the Microsofts and Oracles of tomorrow and they don't sell software, they sell software-as-as-service.

Next-generation technology companies are decidedly different; many are focusing on industries that have matured. They are leveraging open source software to realize efficiencies that established leaders have not. In some cases, they are innovators but in many cases they are taking the fat out of the software delivery model. For example, it is common for software users to invest upfront in a software package that entitled users to perpetual use and some degree of support. But more and more users are adopting software without an upfront investment other than their time. MySQL users, for example, can download and deploy a database without even contacting the Swedish vendor. Sun users can download Open Solaris, without contacting Sun. When they are ready to buy, they are signing up for updates, support, and value-added services. Since these software vendors haven't had to pay for a BMW-driving, Rolex-wearing sales guy to wine and dine you, you aren't obligated to help them recoup that part of the sales cycle.

The ability to do-it-yourself is well and good but even those who chose to deploy systems on their own realize in a crisis they will want the backing of a corporation that can help them quickly resolve a problem. That's where the open source vendor will add the most value - in the way that they service their software. In this model you aren't tethered to a solution; if they don't deliver, you haven't sunk a huge chunk of your budget into a solution that you must recover. It also puts the onus on the vendor to deliver a level of service that continues to win your business.

I was recently relayed an anecdote by a managed services provider who had bought a costly systems management solutions a few years back. He was upset that after he installed the solution, the vendor was unresponsive. His take was that once they had bought the software, the vendor felt little need to keep winning his business. He was looking to replace the proprietary software with an open source solution, but his primary concern, past the features and functions, was the level of responsiveness and ability for the open source vendor to provide service.

The point is that because of increased pressure by open source providers who focus on service rather than licensing, they increase their value to you; you pay for what you need, their service and expertise. In many cases they won't be able to continue to operate on a model that focuses on licensing without a high level of service or at least the availability of a higher level of service. By creating this pressure your established vendors will likely increase their efforts to provide what you need. This new model probably won't spawn another software superpower because the economics for service-based businesses are quite different but it will allow for many mid-tier value-oriented software vendors who are striving to provide you with not only useful software, but exceptional service. As you look at growth in 2007, I suggest you consider the following things. Do your current vendors delivery a good value? Are they servicing your needs or just licensing your software? Maybe it's time to consider looking for a vendor whose business is service.

About Mark R. Hinkle
Mark Hinkle is the Senior Director, Open Soure Solutions at Citrix. He also is along-time open source expert and advocate. He is a co-founder of both the Open Source Management Consortium and the Desktop Linux Consortium. He has served as Editor-in-Chief for both LinuxWorld Magazine and Enterprise Open Source Magazine. Hinkle is also the author of the book, "Windows to Linux Business Desktop Migration" (Thomson, 2006). His blog on open source, technology, and new media can be found at http://www.socializedsoftware.com.

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CloudEXPO Stories
Dynatrace is an application performance management software company with products for the information technology departments and digital business owners of medium and large businesses. Building the Future of Monitoring with Artificial Intelligence. Today we can collect lots and lots of performance data. We build beautiful dashboards and even have fancy query languages to access and transform the data. Still performance data is a secret language only a couple of people understand. The more business becomes digital the more stakeholders are interested in this data including how it relates to business. Some of these people have never used a monitoring tool before. They have a question on their mind like "How is my application doing" but no idea how to get a proper answer.
DXWorldEXPO LLC announced today that Big Data Federation to Exhibit at the 22nd International CloudEXPO, colocated with DevOpsSUMMIT and DXWorldEXPO, November 12-13, 2018 in New York City. Big Data Federation, Inc. develops and applies artificial intelligence to predict financial and economic events that matter. The company uncovers patterns and precise drivers of performance and outcomes with the aid of machine-learning algorithms, big data, and fundamental analysis. Their products are deployed by some of the world's largest financial institutions. The company develops and applies innovative machine-learning technologies to big data to predict financial, economic, and world events. The team is a group of passionate technologists, mathematicians, data scientists and programmers in Silicon Valley with over 100 patents to their names. Big Data Federation was incorporated in 2015 and is ...
All in Mobile is a place where we continually maximize their impact by fostering understanding, empathy, insights, creativity and joy. They believe that a truly useful and desirable mobile app doesn't need the brightest idea or the most advanced technology. A great product begins with understanding people. It's easy to think that customers will love your app, but can you justify it? They make sure your final app is something that users truly want and need. The only way to do this is by researching target group and involving users in the designing process.
Whenever a new technology hits the high points of hype, everyone starts talking about it like it will solve all their business problems. Blockchain is one of those technologies. According to Gartner's latest report on the hype cycle of emerging technologies, blockchain has just passed the peak of their hype cycle curve. If you read the news articles about it, one would think it has taken over the technology world. No disruptive technology is without its challenges and potential impediments that frequently get lost in the hype. The panel will discuss their perspective on what they see as they key challenges and/or impediments to adoption, and how they see those issues could be resolved or mitigated.
CloudEXPO New York 2018, colocated with DevOpsSUMMIT and DXWorldEXPO New York 2018 will be held November 12-13, 2018, in New York City and will bring together Cloud Computing, FinTech and Blockchain, Digital Transformation, Big Data, Internet of Things, DevOps, AI and Machine Learning to one location.

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Big Data Expo Silicon Valley All-Star Speakers Include

MATTHIEU
Octoblu

MAHADEV
Cisco

MCCARTHY
Bsquare

FELICIANO
AMDG

PAUL
VenueNext

SMITH
Eviot

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goTraverse

GETTENS
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CHAMBLISS
ReadyTalk

HERBERTS
Cityzen Data

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SCHMARZO
EMC

WOOD
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WALLGREN
Electric Cloud

VARAN-
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GE

SRIDHARA-
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Pulzze

METRIC
Linux

MONTES
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ARIOLA
Parasoft

HOLT
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BOYD
Neo4j

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MILLER
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CLELAND
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Catchpoint

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CLIFFE

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DE SOUZA
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PARKS
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PEROTTI
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EastBanc

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CTS

MATTELA
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GE Digital

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GoTransverse

LESTER
LogMeIn

PONO
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Google

SINGH
Sencha

CALKINS
Amadeus

KLEIN
Rachio

HOASIN
Aeris

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PHEMI

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Intel

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Big Data Expo Silicon Valley All-Star Speakers Include

SCHULZ
Luxoft

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Autodesk

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testRTC

VARAN NATH
GE

COOPER
M2Mi

SENAY
Teletax

SKEEN
Vitria

KOCHER
Grey Heron

GREENE
PubNub

MAGUIRE
HP

MATTHIEU
Octoblu

STEINER-JOVIC
AweSense

LYNN
AgilData

HEDGES
Cloudata

DUFOUR
Webroot

ROBERTS
Platform

JONES
Deep

PFEIFFER
NICTA

NIELSEN
Redis

PAOLALANTORIO
DataArchon

KAHN
Solgenia

LOPEZ
Kurento

KIM
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POTTER
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MEINER
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CHOU
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HARRISON
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VMware

KIM
MapR

KANE
Dyn

SICULAR
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KUMAR
Liaison

ADAMIAK
Liaison

KHAN
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SUSSMAN
Coalfire

ISAACSON
RMS

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CodeFutures

HEABERLIN
Windstream

RAMA
MURTHY

Virtusa

BOSTOCK
IndependenceIT

DE MENO
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GRILLI
Adobe

WILLIAMS
Rancher Labs

CRISWELL
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COTY
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JACOBS
SingleHop

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JACKSON
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SINGH
IBM

HAZARD
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GALLO
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TAMASKAR
GENBAND

SUBRA
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Emcien

LEVESQUE
Windstream

IVANOV
StorPool

BLOOMBERG
Intellyx

BUDHANI
Soha

HATHAWAY
IBM Watson

TOLL
ProfitBricks

LANDRY
Microsoft

BEARFIELD
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PILUSO
SIASMSP

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IBM Cloudant

SHAN
CTS

PICCININNI
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Modulus

PAIGE
CenturyLink

SABHIKHI
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MILLS
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KATZEN
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SLOPER
CenturyLink

SRINIVAS
EMC

TALREJA
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GORBACHEV
Systems Services Inc.

COLLISON
Apcera

PRABHU
OpenCrowd

LYNN
CodeFutures

SWARTZ
Ericsson

MOSHENKO
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BERMINGHAM
SIOS

WILLIS
Stateless Networks

MURPHY
Gridstore

KHABE
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MAZZUCCO
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Akana

SEYMOUR
6fusion

GIANNETTO
Author

CARTER
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HP

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IBM

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HP

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Citrix

KHAN
Solgenia

SINGH
Bigdata

BEACH
SendGrid

BOSTOCK
IndependenceIT

DE SOUZA
Cisco

PATTATHIL
Harbinger

O'BRIEN
Aria Systems

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BIANCO
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PROCTOR
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DUGGAL
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TEGETHOFF
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SoftLayer

HOCH
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PAQUIN
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BARRALL
Connected Data

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SEGIL
Verizon

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Testimonials
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General Manager of Window Azure
 
How does Cloud Expo do it every year? Another INCREDIBLE show - our heads are spinning - so fun and informative."
@SOASoftwareInc
 
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Yasser Khan
CEO of @Cnnct2me
 
One of the best conferences we have attended in a while. Great job, Cloud Expo team! Keep it going."

@Peak_Ten


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Digital Transformation Blogs
Dynatrace is an application performance management software company with products for the information technology departments and digital business owners of medium and large businesses. Building the Future of Monitoring with Artificial Intelligence. Today we can collect lots and lots of performance data. We build beautiful dashboards and even have fancy query languages to access and transform the data. Still performance data is a secret language only a couple of people understand. The more business becomes digital the more stakeholders are interested in this data including how it relates to bus...
DXWorldEXPO LLC announced today that Big Data Federation to Exhibit at the 22nd International CloudEXPO, colocated with DevOpsSUMMIT and DXWorldEXPO, November 12-13, 2018 in New York City. Big Data Federation, Inc. develops and applies artificial intelligence to predict financial and economic events that matter. The company uncovers patterns and precise drivers of performance and outcomes with the aid of machine-learning algorithms, big data, and fundamental analysis. Their products are deployed by some of the world's largest financial institutions. The company develops and applies innovative ...
All in Mobile is a place where we continually maximize their impact by fostering understanding, empathy, insights, creativity and joy. They believe that a truly useful and desirable mobile app doesn't need the brightest idea or the most advanced technology. A great product begins with understanding people. It's easy to think that customers will love your app, but can you justify it? They make sure your final app is something that users truly want and need. The only way to do this is by researching target group and involving users in the designing process.