Black Duck Blog

Tim Yeaton
President and CEO
tyeaton@blackducksoftware.com
The buzzword in the 2010 software world is multi-source development, and the success of Black Duck in our latest quarter shows that the automated managed use of multi-source development, including open source and third party code, has reached a tipping point in terms of widespread adoption.

Seizing that opportunity, Black Duck today announced that Q1 bookings surged 80 percent compared to Q1 a year ago (Read the complete media release here). Strong performance across all sectors and growth in new customer licenses and professional services drove results, with many new clients signing on.

In the following podcast, I talk about why so many companies are seeking the scalable, multi-source development management services that Black Duck is providing its customers today.

Tim Yeaton
President and CEO
tyeaton@blackducksoftware.com
I’m looking forward to the OSBC 2010 in San Francisco (March 17-18) and hope to see you there!

Jim Whitehurst, Red Hat’s CEO, will kick things off with a keynote about the growing opportunities OSS presents for businesses of all sizes – especially in lean times like now and for the near future as the economy stumbles toward recovery.

Immediately following Jim’s keynote, I’m honored to be participating in the keynote panel discussion on The Future of Open Source. Moderated by Michael Skok, General Partner at Northbridge Venture Partners, OSBC planners have assembled a terrific panel of open source leaders, including Larry Augustin (SugarCRM’s CEO and commercial OSS pioneer), Dries Buytaert (CTO and co-founder of Acquia and founder of one of the most dynamic OSS communities in the world – Drupal) and Jim Whitehurst from Red Hat as well. We’ll be engaging in a spirited discussion on open source adoption and where the industry is headed in the coming years. We’ll also be discussing results from the “2010 Future of Open Source” survey. (The survey is still open for you to add your perspective.)

Day two of the conference is also chock full of exciting speakers, panels and break out sessions, including a keynote from Facebook’s David Recordan on scaling Facebook with OSS and the keynote panel – How Open Source Drives a $1.2 Billion Market – featuring Jean Staten Healy from IBM, Director of Cross-IBM Linux Strategy & Marketing.

I’ll be leading a breakout session at 3PM on March 18th called Mixed Fuel for Innovation: Development Trends Blending Open Source with other Code – Who, What, Why and How (in the Strategies for CIO/CTO Track). I’m fortunate to have Addie Welch, VP of Legal Affairs, at Zenoss joining me in this session. We’ll be sharing some real world examples and case studies of innovative companies gaining a competitive advantage with the strategic use of open source software.

I’ll also be participating on a breakout panel hosted by Paula Hunter, the new Executive Director of the CodePlex Foundation, discussing Multi-Source development and interoperability. That session is scheduled for Wednesday March 17th at 11:40AM.

Please come by, listen in, ask questions and say hello!

Tim Yeaton
President and CEO
tyeaton@blackducksoftware.com

The legal debates and discussions around software and patent protection are impassioned, energetic, and sometimes bewildering. To cut through the confusion, I’d like to answer two questions: Why did Black Duck Software just receive a US patent on its intellectual property, and why did Black Duck decide to file for the patent back in 2003?

Black Duck Software is in the business of enabling our customers (which include three quarters of the top 25 software companies in the world) to use open source software in a managed, automated way to improve the cost-effectiveness and time-to-market of their application development.  We do this by making open content (e.g., metadata about OSS projects & code) useable and consumable for this purpose. This is quite similar to Google, whose search engine technology also makes open content (in their case, web pages) consumable by end users.  The notion of commercial open source equating to making open content consumable has been widely written about by industry thought-leaders such as Tim O’Reilly and Matt Asay.

Virtually all large software companies, including those recognized as leaders in OSS (Google, IBM, HP and Red Hat for example), have patent portfolios.  Sticking with the Google example, the company has dozens of patent applications in process for their search engine technology, since Google has made enormous investments in defining and optimizing those algorithms.   In our case, Black Duck Software has invested over $75 million to perfect our license analysis algorithms and the products that include them, to better enable customers to manage the use of open source at scale.  Our technology analyzes 25 different attributes of over 1800 license types, all in the context of specific development use cases, to do this analysis and resolution.  We are the undisputed leader in our segment as a result of these investments.

Why did we file for the patent seven years ago? Black Duck Software recognized then as now that software patents are a reality, and that having patents of our own to protect against IP incursions is a necessity. Similar to Google, IBM, HP and Red Hat, we must use software patents to protect our intellectual property from such incursions. In our market segment, a Black Duck competitor was granted a software patent last year.  As a consequence, if we didn’t protect our IP using the patent system and have a means to defend ourselves from IP incursions, we’d be irresponsible to our customers and our shareholders.

During my time as CMO at Red Hat, I spoke publicly on numerous occasions that the software patent system had deficiencies and should be revised; and my personal views have not changed.  The software community in general is deeply divided over the notion of patents for software; pure FOSS advocates believe that all content and software should be open and freely available.  Commercial OSS advocates, including Black Duck, believe that making open content and open source software useable in some way, and commercializing the innovations that make it more useful, is “open” too – in fact, that is the model that most commercial open source products and companies follow, led by Red Hat’s business model.

Speaking of Red Hat, we’ve been considering their style of “Patent Promise”…and Black Duck will adopt a similar approach, while ensuring we continue to protect the company and its customers.  For example, as we continue to champion broader use of OSS, we would protect free open source projects in our space by providing them a no-cost license to our patents – simply by reaching out to us. This allows us to protect our IP, if necessary, vis-à-vis existing or new commercialization efforts that encroach on our IP, but honors the view that I hold that software patents can in some instances stifle innovation in open source.  This clearly is not our intent; in fact our business depends totally on accelerating use of OSS by customers.  We want to champion, not stifle innovation in FOSS projects, so we’ll gladly take that pledge and challenge others in similar circumstances to do likewise.

Tim Yeaton
President and CEO
tyeaton@blackducksoftware.com
Ashlee Vance’s recent article in the New York Times posits that open source isn’t a great business model if you want to make money. Of course this discussion has been simmering for a long time; it pops up occasionally on Dana Blankenhorn’s ZDNet posts, in Matt Asay’s column on CNET, and among other industry observers and influencers like Serdar Yegulalp, Matt Aslett and Savio Rodrigues.

Everyone has a different view, although most agree that the best OSS business model belongs to Red Hat, which has mastered the art of packaging information, much as Google does. So how does it work?

Red Hat makes money by packaging and refining GNU Linux and Fedora Linux in an enterprise-strength, reliable, documented, supported, safe-to-use distribution (RHEL). Sure, there are many other Linux distros. Some are even supported well, but Red Hat gets top marks. Red Hat’s done such a good job that giant Oracle and not-so-giant CentOS have, in the great open source tradition, taken this work, repackaged and rebranded it, and created derivative businesses.

Tim O’Reilly argues that open source is a means to an end (collaborative innovation) and that ultimately “value is in the data.” No where is that more true than with Google. According to Matt Asay, Google makes money by packaging information that is freely and abundantly available. Google indexes data on the Internet, packages the information to make it searchable and, to paraphrase Matt, “gives away its abundance” via its free service to make money on advertising.

The point about packaging information is the core of our argument. The real business model for open source, the money shot, is packaging freely available information and making it useful; in Red Hat’s case it’s GPL code in Google’s case it’s web content, but there are many kinds of free/open content available that open source businesses are built around.

Black Duck’s business is built on packaging freely available information about OSS projects. Like Red Hat and Google, Black Duck’s business model centers on the packaging and refining of OSS project information and making it useful for development teams. We give our customers an advantage in their development process by providing information about open source projects, information they use to choose the OSS components that best fit their application needs, making them more efficient than their competitors. And like Google we give away abundant information about open source code on Koders.com, our free code search website. It’s an information economy, and we – with many OSS companies – are in the thick of it.

So when you are thinking about open source business models, think about the value of packaging open content. There’s still room at the table for new companies to build strong businesses, using open source models, by enabling customers to effectively “manage abundance.”

Tim Yeaton
President and CEO
tyeaton@blackducksoftware.com
This week the EC Commission on Competition will hold a hearing to deliberate the issues raised in the Commission’s Statement of Objections over the Oracle acquisition of Sun. But the questions raised go beyond the specifics of the acquisition, to the very heart of the rise of open source and its ability to spur innovation if allowed to operate. Because Black Duck has unique and deep insight into the competitive dynamics of the open source industry, I felt it was important that we provide our observations for the Commission’s consideration as part of these deliberations. Here is a copy of the letter I sent to Commissioner Kroes on this topic.