Balance lucre with liberty, open-sourcers told
MySQL chief Marten Mickos outlines his views on making money off software that can be obtained for free.
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CEO Mickos, whose company develops and sells the widely used open-source MySQL database, outlined his vision for commercialization of the collaborative programming movement to attendees at the MySQL Users Conference here Wednesday.
"For us, there's a duality to open source and how it works," Mickos said. "There's one part of us that says profit is a beautiful word, and there's another part that says freedom is a beautiful word."
Mickos joins a parade of executives who have pitched in on the topic. Sun Microsystems President Jonathan Schwartz outlined his "
Mickos said he believes a good business can arise despite that duality by satisfying both constituents: paying customers and eager developers. To keep paying customers satisfied, companies must make a difference between the products they charge for and the products they offer for free, but not go too far, he said.
"You must have some extra value for those who pay. They are not happy paying if they see those who are not paying are getting the exact same thing," Mickos said.
At the same time, software sellers must be careful, Mickos noted. "There have been open-source companies that lost their community from which they originated, because the community felt a compelling reason to abandon them, because they did something unacceptable in terms of differentiation," he said.
Red Hat, the top Linux seller, acknowledged it went too far toward commercialization with its Red Hat Enterprise Linux software. As a result, it's beefing up efforts to attract outside participation in its Fedora project.
MySQL has some evidence to back up Mickos' views. The software company's installed base is growing, its customer count is growing faster and its revenue is growing fastest.
In 2002, MySQL had about 3 million users, 1,000 paying customers and revenue of about 5 million euros, or $6.5 million. For 2005, according to Mickos' presentation, those numbers will increase to 6 million users, 5,000 customers and $34 million (26 million euros) in sales.
The best-known open-source project is Linux, which is produced by hundreds of programmers across the world. In contrast, the vast majority of MySQL software is built by MySQL's own staff of programmers.
But there are other ways MySQL welcomes active participation from volunteers: finding and analyzing bugs, building MySQL utilities and tools, and promoting MySQL simply by using the free version.
"We have an installed base of 6 million out there. This is our marketing department," he said. "At this point MySQL has about 1 paying customer to about 1,000 users, and we love it."
MySQL launched a new pricing scheme in February: an annual support subscription called the MySQL Network. Compared with what nonpaying MySQL users get, the network subscription offers certified software, maintenance upgrades, product support, consulting support, an update advisor, a technical alert advisor and a knowledge base.
MySQL, now celebrating its 10th anniversary, is about to release a major new version of its database, MySQL 5. The company began testing a raw version in 2004, released a second test version on Monday at the conference, and plans to release a final version by the end of June.
"We are now in beta 2, and we are coming out with the GA (general availability) version in late second quarter," Mickos said.
Among the organizations using MySQL are Cox Communications, Sabre Holdings, Friendster, Wikipedia and CNET Networks, publisher of News.com, Mickos said.
Also Wednesday, MySQL announced a tightened partnership with Red Hat. Under the deal, the companies have begun delivering integrated technical support and will test the database with two higher-end Red Hat packages, the Cluster Suite and Global File System.