Imagine an industry based on a product that is essentially free and endlessly reproducible. The product can be accessed – and customized – for virtually no cost by anyone with the right equipment and skills.
But instead of warping into a free-for-all with faulty products, this industry uses community checks and balances, merit and accountability to develop ever-improving products. And although those products are mostly free, the industry still makes money.
It’s not a pipe dream. It’s the reality of today’s burgeoning open source technology industry.
The open source technology movement has been around since at least the late 1990s, but has gained particular momentum in the last five years, said Matt Tunnell, president and founder of Formos, a Vancouver information technology company.
“Open source matters to business because it allows more value to customers for less money,” Tunnell said. “Open source lets our clients get there faster.”
Much of the in-house software used at Formos is open sourced, created under a software license that encourages users to create their own versions of it by changing its coding.
The majority of open source software is available online for free – the biggest cost associated with its use may be the time programmers spend making custom changes. But for average users, many open source programs can be downloaded and used for no cost unless they opt for a tech support package.
Tunnell said he suspects half of downtown Vancouver companies use some kind of open source technology, particularly when it comes to web-based programs.
Formos made open source technology a greater part of its services with the December hire of Howard Lewis Ship as the company’s first director of open source technology.
Lewis Ship is the author of Tapestry, a widely used open source platform that builds web-based software. He helps Formos advance its open source work while providing training and mentoring to Tapestry users.
“In the end, (using open source) boils down to more for your money because so much is readily available, there are no licensing fees and it’s so easy to modify,” Tunnell said. “I believed (that with Lewis Ship) we could help give back to the open source community and it was a good business strategy.”
Fourteen Formos engineers in Vancouver, with a team of about 20 in Vietnam, create custom software for clients including on the local level JH Kelly and Vancouver’s National Historic Reserve Trust.
Turning free into profit
For JH Kelly, a Longview-based construction company, Formos created KellyNet ERP, a secure, web-based business workflow application that replaced about five software programs, Tunnell said. It handles everything from cash management to employee time cards and provides a centralized, standardized way for employees to track project information.
“It replaced a myriad of Excel spreadsheets,” Tunnell said. “They risked losing everything if anything happened to a laptop. Now everything is centralized in this program. … It replaced hundreds or even thousands of ways employees had invented for tracking their own stuff.”
That project is one example of the way companies like Formos use the free commodity of open source software to make money.
JH Kelly pays Formos for program design and updates, making up about one-fifth of Formos’ revenue stream, which Tunnell projects will reach at least $2.25 million by the end of the year.
Open source software also has been a boon to Vancouver-based New Edge Networks, which builds and manages multi-site DSL and broadband networks for more than 11,700 client offices nationwide.
While looking for efficient and affordable ways to improve its client network management service about five years ago, a few New Edge programmers decided to see if they could come up with an open source solution.
After 90 days of writing code and researching open source platforms, New Edge programmers had a solution – a customized program powered by OpenNMS, an open source tool from the Pittsboro, N.C.-based OpenNMS Group.
With that, New Edge developed MyEdge, an online portal where customers track their network performance. Clients can see technicians’ notes along with performance charts, graphs of bandwidth use and Google maps pinpointing system failures.
For many business clients, MyEdge is tacked on to a service package with little to no additional fees, said James Sutherland, a New Edge staff systems engineer.
“Instead of having a product that’s costing us millions, we have one that costs us tens of thousands of dollars and it’s easy to make up those costs,” Sutherland said. “You could not offer this kind of product at our price otherwise.”
New Edge pays OpenNMS Group for tech support related to MyEdge, but even as an enterprise-level customer, New Edge pays one-tenth of what it might have paid a proprietary software company for a year, Sutherland said.
“Not to mention the software is free in the first place. … It’s cheap and we pass that on to our customers,” he said.
New Edge is one of the largest clients of OpenNMS Group, which Tarus Balog founded in 2001. Its software is free but the company gets a return on services for the software, such as the program customization and tech support it provides New Edge.
The company has commercial clients in more than 18 countries, with year-over-year growth of 39 percent for the last four years and a 21 percent gross profit in 2007.
Balog said working with a free product has created a unique but beneficial business dynamic.
“Open source is very much a meritocracy,” he said. “People who write it, all they really want is credit. In the long run, people using open source are going to be more competitive. They’re going to be more profitable and deliver better services.”
A unique economy
Working with a free product hasn’t been without some trouble for OpenNMS Group. The company is suing San Francisco-based Cittio Inc. for violating terms of the General Public License on OpenNMS, according to Balog’s blog.
Open source ethics also can be violated when companies offer a free but limited version of their software and call it open sourced while charging for advanced versions.
Even with such challenges, the checks and balances inherent in the open source culture lead to products of ever-increasing quality, said Tunnell and Balog.
“You usually find the open source programs (rank) higher because they’re so visible,” Tunnell said. “By opening (code) to scrutiny, you get a higher quality product.”
Programmers want to make it as clean as possible because their names are on it, he added.
“Whether you’re Microsoft, Formos or some guy building a game, it’s an interesting market,” Lewis Ship said. “You’re looking to an economy of reputation and interest. The opportunities flow from that.”
KEY TERMS
Open source: (philosophy, legal) A method and philosophy for software licensing and distribution. It is designed to encourage use and improvement of software written by volunteers, ensuring that anyone can copy the source code and modify it freely.
UNIX: [yoo-niks] (trademark) A multi-user, multi-tasking computer operating system.
Linux: [lĭn-ŭks] (trademark) An open source version of the UNIX operating system.
General Public License: Free and open viral licensing that requires changes to open source programs to also be GPL licensed; intended to guarantee the freedom to share and change free software while allowing anyone to distribute it.
Apache Software License: Grants permission to change code or rename an open source tool but not to alter the base copyrighted code.
Key terms source: Free Online Dictionary of Computing, American Heritage Dictionary of the English Language online
‘OPEN SOURCE ROCK STAR’
Mention Howard Lewis Ship’s name in the tech community and phrases like “rock star” or “lightning rod” might come up.
Lewis Ship is Vancouver-based Formos’ first director of open source technology and the author of Tapestry, a Java-based open source platform that can be downloaded for free and used to create customized, web-based software applications.
He began developing Tapestry in 2000 and now it is in use across the world in a host of different industries.
Lewis Ship said he is probably aware of one in every 100 users because nobody is required to contact him when they use the program or add to its code enough to create a new program.
But at least once a week, Tapestry users contact Lewis Ship for mentoring. Occasionally, they have suggestions for changes to Tapestry’s basic code, for which Lewis Ship has an Apache Software License that allows users to create new versions – even with different names – without changing its basic code.
Perhaps unlike many rock stars, Lewis Ship responds to those requests and often incorporates user suggestions into his core Tapestry updates.
So what is it like to know uncounted numbers of people are using his creation?
“It’s extremely cool,” Lewis Ship said. “There is some weight of responsibility to keep making it better.”
“Howard has the burden of the community (on him),” said Matt Tunnell, president of Formos.
Lewis Ship came to Formos in December after working about four years as an open source consultant, but Tunnell was a Tapestry user before he met Lewis Ship.
“Matt and I had the same vision,” Lewis Ship said.
Now Lewis Ship travels as a Formos employee to promote Tapestry about three weekends and one work week per month. In true rock star fashion, he’s touring this fall with the No Fluff, Just Stuff Symposium – a conference for Java developers in 25 cities in the United States and Canada.
“What I’m seeking for Tapestry is legitimacy,” he said. “As more people use it they feel it’s a safe bet to adopt.”
FREE AND READY-TO-USE OPEN SOURCE SOFWARE AND TOOLS ONLINE:
Mozilla Firefox and Thunderbird: web browsers, www.mozilla.com
OpenNMS: IT network manager, www.opennms.org
Open Office: Office suite including word processing, spreadsheets, slide presentations and databases, www.openoffice.org
Tapestry: Web-based software builder, tapestry. www.apache.org
Ubuntu: Linux-based operating system, www.ubuntu.com
Just because these programs are free and easy to access doesn’t mean you won’t need some tech support in getting them set up. But, said Matt Tunnell, president of Vancouver-based Formos, “If you have decent IT skills or a buddy you could call in, you could get an entire office running on open source software.”
Charity Thompson can be reached at cthompson@vbjusa.com.
