Open source grows beyond its roots

The company, founded three years ago, will release Zimbra Collaboration Suite 4.0, which will allow people to create documents, such as spreadsheets and text files, from the company's Web-based e-mail client.

The expanding product breadth of companies like Zimbra underscores the growing popularity of open-source software as it expands into categories traditionally dominated by commercial companies. Likewise, the LinuxWorld Conference and Expo has stretched beyond its Linux roots to a wide variety of topics, from mobile phones to business intelligence tools.

Several start-ups have adopted open-source business models in an attempt to unseat incumbent business software providers. In such models, some products are typically given away for free and customers pay for support.

Open-source challengers, from database to desktop software vendors, usually promise lower costs than closed-source software. But some open-source companies, including Zimbra, are seeking to outrace established vendors on features as well.

"Ultimately, open-source communities are at their best when they innovate and try to redefine a (technology) space," said Scott Dietzen, Zimbra's president and chief technology officer. "If we set existing products as the target, we cast the proprietary solution perpetually in the leadership role."

With Zimbra Collaboration Suite 4.0, the San Mateo, Calif., company is seeking to expand its product beyond e-mail and calendaring into shared Web documents, or wikis. For "ad hoc collaborations" in a small group, users can share Web documents with people in their e-mail address book. Or documents can be shared and authored by people in company-defined groups, Dietzen said.

Zimbra has embraced AJAX-style Web development extensively in an effort to combine the benefits of Web-based software, such as mobile clients and mashups, with the look and feel of traditional desktop software.

The latest release takes advantage of AJAX Linking and Embedding (ALE), open-source software developed by Zimbra that lets people include objects, such as a spreadsheet, within other documents.

"In this release, there's significant overlap with Microsoft's SharePoint, and that's no accident," Dietzen said.

The Kmart of software?
In general, open-source products in areas such as databases and packaged applications lack the sophistication of higher-end proprietary products from larger vendors IBM, Microsoft and Oracle.

But they continue to grow in usage because "good enough" products fit the bill for many tasks, according to vendors and analysts. Now, with venture dollars behind them, some open-source startups are seeking to shed that commodity label for their software.

John Roberts, CEO of SugarCRM, said the open-source application company competes directly with vendors with similar products, be they open-source or not.

Writing software in an open-source process gives the company regular feedback from customers. And because end-users can try a version of the application for free, SugarCRM does not need to commit as much money to sales and marketing as traditional enterprise software companies do.

"There's a better way. If you don't have to spend 70 percent of your revenue on sales and marketing, why would you?" he asked.

Drawing an analogy to fuel-efficient vehicles, Roberts said that SugarCRM's own sales and marketing are more efficient, compared with traditional enterprise software companies. SugarCRM's spend is about 15 percent to 25 percent of revenue, he said.

"Most proprietary software companies are like big gas-guzzling SUVs, throwing CO2 into the atmosphere," he said.

Two-year-old company Pentaho, staffed with refugees from incumbent business intelligence vendors, late last year introduced an open-source business intelligence tool.

The product, which will be updated next month, still lags behind the established vendors on features, said Lance Walter, Pentaho's vice president of marketing. But the company has the advantage of having architected its product around standards, which is typical of open-source software.

"We can snap into a standards-based, componentized, services-oriented architecture, where customers can use as much or little software as they want," Walter said. "Versus the proprietary vendors, who have big stacks where their stuff works well with their stuff."

The open-source process, where code is typically released publicly on a regular basis, favors more rapid development, said Kim Polese, the CEO of open-source services company SpikeSource.

"Open-source applications are becoming more feature-rich all the time...Users and VARs (value-added resellers) are adding extensions and making them more rich," Polese said, adding that smaller open-source companies tend to be more nimble.

"With the proprietary software model, you have an entrenched model of having major releases every 12 to 18 months, where everything is bundled into that release," she said. "In contrast, open source puts control in with the customer and the VARs, because they can add those features easily. They don't have to wait for the vendors."

Competitive highs and lows
Existing closed-source software companies are not sitting idly by as the open-source wave goes by. The largest infrastructure software vendors--IBM, Microsoft, Oracle, BEA Systems and Sun Microsystems--have embraced open-source products and development practices to varying degrees.

In terms of competition, open-source is still mainly a concern at the low-end, said Robert Shimp, vice president of technology marketing at Oracle. Surveys taken by the database giant indicate that customers are most concerned about high-end features to do with performance, reliability and security, and price is less important, he said.

"Open-source technology and community processes are complementary to commercial software. A lot of people, unfortunately, wrongly paint them as opposing forces," Shimp said.

Oracle has stepped up its involvement in open-source projects in the past year. It also acquired Sleepycat, which sells support for the open-source Berkeley embedded database.

"The open-source community deserves a lot of credit for developing some innovative business models and some interesting technology," he said. "The notion of making a product free to use and contribute to and you pay for support is an interesting business model we're certainly looking at closely."

Zimbra's Dietzen said that Linux distributor Red Hat has demonstrated that an open-source company selling support around freely available software can grow to a substantial size.

A significant difference with Red Hat and the round of open-source companies in formed in the last three or four years is that many incomers to the industry have developed their software from scratch, he noted.

"We're following in the footsteps of Red Hat, which has a nice growing business," Dietzen said. "The stunning part is that they don't own the IP (intellectual property). This next generation, like Zimbra, does own our IP, and that gives us an inherent advantage in capturing value in the market."