IBM vs. TurboHercules… Fight!

First of all a disclosure – I am currently employed by IBM as a software developer (but not in the z/OS group), however I will try to be impartial in my assessment of the situation. As you read this post keep in mind that the opinions expressed are mine alone and not representative of the opinions of IBM or its affiliates.

If you haven’t heard about the recent shots fired between IBM and TurboHercules, Ars Technica has good coverage of the whole situation which can be found here. If you don’t have a few minutes to read the whole thing there I can give you the gist: The Hercules open source project allows applications written for the IBM System Z operating system to run on alternate hardware (including desktop computers) within mainstream operating systems. IBM had no problem with this until recently, when TurboHercules was founded to offer the software commercially – and made a move against IBM accused monopoly of the mainframe space. Now, IBM has asserted a number of its patents against TurboHercules (some of which were pledged to the open source community back in 2005).

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Putting customers before shareholders

Today’s post asks whether an organization’s long term financial health is best served when the organization’s main focus is to increase share price each and every quarter, or if more value is generated by putting the customer their needs first.

Recent literature on the subject implies that the popular trend of the last three decades may not be the best choice – prioritizing share price above all else may actually rob longterm shareholders of wealth that could have been generated with a customer first policy. In the January-February 2010 issue of the Harvard Business Review, Roger Martin (dean of the Rotman School of Management) took a close look at a few companies that put the customer first. Interestingly, many of these companies generated strong shareholder returns compared to the S&P 500 while creating customer loyalty (or because of it).

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From open core to complimentary services

SpringSource recently announced a change in their open source strategy. SpringSource’s dm Server project (a Java/Spring application server) was previously monetized using the open core model in which a product’s core functionality is available as open source and a commercial version of the product is sold with a different license agreement and/or an enhanced feature set. SpringSource has decided to move to a complimentary service model in which the product is offered entirely free of charge and subscriptions for support can be purchased.

As organizations better understand their own offerings, the markets they operate in and open source  itself, changes in strategy and business model can be beneficial to their ability to create value. As an acquisition of VMWare, there may be ulterior motives to this strategy switch which is counter to what has been happening in the open source word as of late. Savio Rodrigues of InfoWorld weighed in on the switch  here stating that:

“It doesn’t take a crystal ball to see that VMware is attempting to drive dm Server adoption through the Eclipse Foundation and monetize the adoption when operations team want to deploy dm Server applications on Cloud infrastructure. The dm Server support subscriptions are a stop gap until VMware can build out its cloud offerings and dm Server adoption increases.”

Read Savio’s whole post here.