LAKE TAHOE, CALIF. — Commercial open source is like the planet Mars: a fascinating environment that holds tremendous promise. It can also be harsh, sterile and difficult to navigate, say two veteran explorers.
Craig McLuckie, founder of Kubernetes and now CEO of Heptio, and Sarah Novotny currently leads the Kubernetes Community Program for Google. Kubernetes, an open source container cluster manager originally designed by Google in 2014, has been called a “secret weapon” in cloud computing.
The pair told a story about the emergence of “open source as a force in the world” as well as a cautionary tale for those embarking on a journey into the far reaches of commercial open source at the Linux Foundation’s Open Source leadership summit.
They first took a look at the current landscape: these days, software is increasingly central to the success of any business and open source software is changing the relationship between enterprises and technology. More progressive companies — including banks – are changing the way they engage with software, McLuckie says. They want to put resources into it to make it better, to make it theirs, behave the way they need to behave and that ripples into commercial buying decisions.
“You go to a lot of these organizations and increasingly they start to say, ‘Hey, this is open source’ and if it’s not, they’re not interested,” McLuckie says. “If you’re not an open source company, it’s hard times.”
Open source has also been the infrastructure that the internet has used for years and years but as the cloud has changed the infrastructure, and everything becomes a service, infrastructure software is being built in open source and deployed and monetized through cloud providers. “That really and fundamentally has changed how you engage with open source software and how you engage as open source developers,” Novotny says.
Sinha: Ownership in Kubernetes means we encourage everyone to take on a role, and you must respect whoever has the role. #lfosls
— APESOL (@APESOL) February 15, 2017
Cloud has changed the way open source software is monetized. When people ask McLuckie what was Google’s intent with Kubernetes, he answers, “We’re going to build something awesome. We’re going to monetize the heck out of hosting it. That’s it. That was the plan. It actually worked out really well.” The result was a strong community and a quickly growing product.
That impact is worth understanding, particularly if you’re running a community — doubly so if you’re building a company around an open source technology.
“We’re all in the open source world together,” he says, adding that there is “no finer mechanism for the manifestation of OS than Puppet cloud right now” and citing the example of RDS which is effectively a strategy to monetize MySQL. “It’s very difficult to point to something more successful than Amazon’s ability to mark up the cost of its infrastructure, overlay a technology like MySQL’s technology and then deliver a premium on it. This is incredibly powerful.”
Monetization is not without its challenges — “like going to Mars and staying alive when you get there,” McLuckie says. There’s an obvious tension in commercial open source between the need for control and the need to build and sustain an open ecosystem. “If you’re thinking about building a technology and building a business where your business is value extraction from the open source community, it’s going to be interesting. You’re going to have some interesting problems.”
McLuckie’s admittedly “non-scientific anecdata” theory is that the reality on return on effort for (distros, training, consulting) for many startups in open source can be “bleak.” The first way that startups tend to think about monetization is to create a distro and sell support. This is an easy way to get things rolling: the community finds it, they want to use it, very few people have the expertise to run it and you can make good money packaging it and selling it. But it doesn’t take long until another distro — almost identical — comes out at half the price. It’s easy for your customers to switch and the rest of your value proposition (getting the technology working, getting it through the community) is now making it easier for your competitor to undercut you. This is also true of licensing — where if your fees are high enough, companies start thinking internal engineers are cheaper and can customize more — professional services and training.
Survival is about being lean, McLuckie says. Smart startups can eke out a living if they don’t burn, say 50 percent of operating budget on customer aquisition and “look hard” for economies of scale.
How did Kubernetes navigate this territory? “We put together something that’s special. We created this back pressure, that will fight back from monetization,” McLuckie says . “The most focused way to do this is lock down a community. All organizations belong to us. If you want a fix, it’s coming through our computer base.”
Leadership matters, it’s a powerful and healthy form of control. The pair said that when they look at the biggest gap in their communities it’s not the contributors but leaders who can help contributors succeed. Leadership is also about the workaday tasks of managing releases, paying down the “community tax,” and being part of the team first.
“It’s easy to get on the wrong side of the community. It’s hard to get the unit economics right. Make sure you really think through the future of where this is going. And designing an organization, designing a good market strategy that’s grounded in the economics of the day,” he says.
“It’s also about being really smart,” Novotny says. “If you are a business, and you think you your business is value extraction from an open-source community. You’re going to have hard times. You cannot take more out of an open-source community that you put in.”
— Rochelle Grober (@GroberRocky) February 14, 2017
Be adaptable, she adds, ss the technology changes, as the landscape changes, as the cultural changes. “We’ve seen all of these cultural shifts, they all have threads that carry that, and now one of our favorite cultural shifts, of course, is Cloud Native. And that has such a strong expectation of being mobile. Mobile in the sense of not locked into any particular vendor, while still being able to get your- any you-cases service to the best possible execution of your engine. So my hope is that out of this, we will see open-source into across all of the very work that we need in our communities.
Above all, the key is to sell your vision of the future – new territories, unexplored lands.
“The technology is a tool,” McLuckie says. “If you want to create a business, the business has to be about how you use it. You have to sell the dream. You have to think about ways in which that technology is transforming in other people’s businesses.”
Cover photo by: Pascal
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