IBM's Open Source Development: The Good and the Bad

IBM (IBM) recently briefed a group of analysts on what it calls its “cross-brand” open source development and marketing activity. That characterization makes the point that open source is as important to the IBM Lotus, information management, and Tivoli brands and products as it is to the WebSphere, Rational and operating system brands and products with which open source is typically associated. At the 30,000-foot level, I took away some good news and some bad news.

Here was the good news. At IBM, the use of the open source software [OSS] community and development model is all about increasing market cap. It’s not altruism. It’s not something for some developers to do 10% of their time like Google’s (GOOG) tithing for technology. It’s not an ad slogan or a manipulation of OSS terms and conditions (Ts&Cs). Most important, it’s not a strategy, it’s just a tactic.

This good news is not new news; it reinforces past IBM direction. But it is always good to hear it spelled out so clearly by top level managers, “cross brands” as IBM says. You can see OSS now in WebSphere, Lotus, Tivoli, Rational of course (the Eclipse Foundation), Linux and now information management (with the late March 2007 investment by IBM in EnterpriseDB). Ten years after beginning to employ OSS as a tactic with the decision to bundle the Apache HTTP server into WebSphere (in order to overcome an early Netscape lead in the web server software market), the open source tactic is paying off. My research says IBM is doing—conservatively—as much OSS-related business as Red Hat (RHAT). And the OSS development model clearly helps on the expense side as well.

Here’s the bad news: There is an IBM strategy behind “next gen open source” and they call it Open Standards (always upper case). In the Lotus market, IBM managers appear to be betting a lot on international approval of Sun’s (JAVA) open document format. There are also many other de jure standards efforts to which IBM pays a lot of attention.

I could not disagree more with the strategy. I'd rather see more time spent making appropriate IBM technologies lower case standards. Open Standards (always upper case) are an artificial market manipulation that has either no effect or no lasting effect. Even worse is when the Open Standards are combined with politicians. The use of Apache mentioned above from 1997-1998 is a better example for IBM to follow. IBM (and Oracle’s (ORCL)) early adoption of Apache illustrated how standards (lower case) change market dynamics quickly and positively for the company that acts on them. The years of meetings in Geneva can follow once the market has blessed one widget facet or another (or blesses more than one widget facet). Typically these are functions on which users are not going to make buying decision anyways.

But for more than my 40 years in the business, if The IBM Company (back in the day, it was always pronounced upper case) says something is so in the information technology market, I have to think long and hard about betting against it. I think the Open Standards strategy, although apparently being driven by the IBM Software Group, probably has a lot to do with what we called the services strategy in our 2007 annual review of IBM.