Alex Hudson

Thoughts on Technology, Product, & Strategy

Month: October 2010

bkuhn on Canonical

If you haven’t read it already, Bradley Kuhn’s take on where Canonical are aiming is deeply interesting. There is bound to be push-back against the article, because it does connect a few distant dots, but I found it particularly interesting because it’s apropos of a recent discussion on Surrey LUG’s mailing list – which has no public archive so therefore I cannot link, but the gist of the thread was a discussion on the various approaches Canonical takes to getting income.

I personally disagree that it seems like Canonical are attempting some kind of open core strategy: I think it’s arguable that they’re seeking to leave that avenue open, but for them to sell proprietary software products at any point in the next few years would destroy pretty much their entire brand image. In particular, Shuttleworth has made extremely strong statements in the past about never charging money for software – and it seems pointless to be proprietary if you’re giving the software away (well, for the most part).

However, there are a couple of things I find pretty depressing that Kuhn brings up, particularly the admission that Canonical is still not profitable and would take “some more time” to achieve that. By 2007, some three years into the Ubuntu project, it had already cost some $25 million, and of course we’re another three years on since then – given the growth of Canonical, a total spend of $50 million to this point would seem particularly conservative.

What I never understood to begin with, and still fail to understand, is why Shuttleworth has ham-strung the project from the start by promising there would never be a pay-for version a la Red Hat. My thinking in this regard is pretty simple: when you’re paying for all this development, you have to recoup those costs somehow. When you’re providing support or doing all these other activities, you leverage that development, but you incur further costs which then also need to be recouped.

Pretty much everyone else who commercially develops free software has some method of recoup in position. Red Hat, as an example, sell security updates, support, and the OS itself. Nokia invest in software to sell their phones; similarly the likes of Intel, Oracle, and all sorts of other businesses invest in the software to enable hardware sales. Google invest in the likes on Android because it gives them a huge amount of control over the mobile market. And of course, there are plenty of small players too, all of whom have some kind of strategy to ensure their development activity is not some loss-making exercise in the grander scheme of things.

If Canonical’s commercial model confuses me, though, there is one thing which is abundantly clear: for that company to fail would be incredibly damaging. It would be difficult to imagine a more worse-case scenario than seeing Canonical at ten years old, still burning millions of dollars each year and still not making a profit.

Of course, Canonical likely has that luxury; previous break-even targets have been set and then moved for whatever reason, and the vision still seems to be about growing hard, branching out and becoming some “cohesive whole” (which is avoiding the issue). So it’s not likely that they’re going to fold in the next five years. But in away, that’s almost worse: much like a Government-funded entity, there is this insulation from commercial reality which ensures that “the vision” will be followed. The must be an opportunity cost there, room for a new Ximian or a new Mandrake, and fresher more innovative visions that are currently squeezed out of the market.

Philip Green report on Govt spending; UK Free Software

For a number of years, the discussion amongst UK-based free software professionals has been about how to do more with Government. The most active discussions happened around the time of the UK open-source, standards and re-use policy was developed (around 2004; it has been updated since): it wasn’t great before, and it hasn’t improved an awful lot since.

In very similar ways people have bemoaned the accessibility of Government procurement processes for micro/small businesses, and it’s basically the same problem – the “big guys” tend to be pushing proprietary solutions.

So, it was with some interest I read Philip Green’s recent report on Government efficiency. I had some fears about what I was going to read; “efficiency” generally means driving costs down hard, which usually means bulkier contracts with fatter discounts. And that’s what we’ve got.

People who don’t work with UK Government on IT projects probably don’t have much of an idea of the state of play. Right now, discretionary spending within most of it is limited to contracts to £10,000 value. Above that, and you need more central approval, and there is an absolute bar on any project worth over a million. In my book, that’s basically micromanagement.

“Government must leverage its name, its credit rating and its buying power”

This is the central theme of the report. Basically, Government could be buying stuff in bulk, or doing things for itself, in areas that it currently is not. And by Government, I really do mean “Government”: right now, the various Departments often do things for themselves, and by business standards each department is a pretty large enterprise. Green is saying that Government, as a whole single unit, should be doing things.

This is a knock-out blow to free software and small business; it’s difficult to see how any SME will be able to supply Government with anything but the most specialist of services. What’s more, the principle of multi-vendorship enshrined (but rarely acted upon) in the open-source policy is more or less going to be a thing of the past.

Just major suppliers?

You see, here’s the problem. The Green review is mainly looking at main suppliers: contracts worth millions of millions of pounds. However, that doesn’t really mean that it’s not going to affect small contracts.

A good example is the NHS. For the last 12 years, there has been an NHS-wide agreement for Microsoft software. Who knows how much this has cost, obviously hundreds of millions, but equally obviously at a vastly reduced rate. Not only was the NHS able to deploy pretty much any Microsoft software it felt like, NHS staff were virtually free to take it home with them (ok, they had to pay £9 for Office). For those unfamiliar with the NHS they employ, one way or another, around 7% of the UK workforce. That’s a lot of Office installs.

Are NHS employees really likely to become Fedora users if it costs them a few tens of pounds to get the latest Microsoft operating system and office suite? I’m not sure LibreOffice is quite that compelling, and frankly people spend more money at the pub on a Friday night.

It’s the network (effect)

Once central IT platforms are bought and paid for, Government-wide, that puts a huge obvious limit on what applications can be deployed on it. No free software desktop, that much is obvious. But what about free software desktop apps? Having seen the likes of Fujitsu deploy Government desktops in what is commonly called “lock down mode”, I don’t see it that likely that many people are going to be Firefox users in that environment

And what about delivering software as a service? Many people have touted that as a way of doing an end-run around the desktop lock-down. But sadly, the picture is probably worse there, if anything. Government will have centralised hosting as an IT service, and they will expect their services to be hosted on their platform for reasons of security and reliability.

That platform is not going to be an Apache-based platform: being realistic, it will either be some grandiose Java application server (Websphere?) or it’s going to be Sharepoint. Which will mean any application you want to sell to Government will have to run on one of those platforms.

Whither the future

If Government acts on the Green report, and implements anything close to the full recommendations, what we will see in the next five to ten years is a central Government IT platform which is homogenised to a much, much greater extent than we have ever seen. Networking and telephony may be provided by a single central Government unit (Green called it “GovTel”), and computing is likely to be outsourced to a single organisation: an IBM, or a Fujitsu, or similar.

No more WordPress running the Number 10 website. No more small enclaves of innovative, independent projects trying to blaze a trail in Government IT. The future is going to be breath-takingly corporate, bland, and hostile to small business. Some readers may remember the APLAWS project: funded by Pathfinder, this was almost a fluke project which showed just what free software could do. It brought together some big open-source companies, charities and local Government, and developed a mostly-free CMS system that could have been further developed by any local authority that cared to look at it. Sadly, although still in use, project development seems to be dead and in this new Green world, it would never be procurable now.

It’s a very sad picture. Yes, we all want Government to be “efficient” and cost-effective. But there is an opportunity cost here. The opportunity cost is the small businesses and the people innovating in IT, whose products will effectively be beyond UK Government’s reach.

The NHS has also shown us a picture of what happens when these large agreements come to an end. Mass license compliance activity, which never had to be performed before. Large numbers of staff being asked to pony up £100 for an Office suite they already have but no longer have the rights to use. They’re expensive agreements to get out of.

Philip Green has managed to reduce the IT procurement problem to little more than finding the cheapest box of tea bags. I think it’s a poor way of thinking about the problem, because IT moves on so quickly. By centralising and planning IT to the extent being recommended (and this from a Conservative Government!), it will remove any and all flexibility to respond to changes, and impose an IT inertia on the country as a whole.

Sad times.