Part of the strategy we put in play for SuSE was to communicate one step ahead of Red Hat. While the fedora-toped gang was still droning on about Linux being cheaper, we recruited major infrastructure vendors (hard and soft) to help us talk about integration and strategy planning. Since the market had decided to go with Linux, these talking points were what customers were thinking about – instant alignment.

We went out of our way to recruit Oracle. They were and are the big boss of the database business. After booting up a box, installing a DBMS is the next task on the average sys admin’s checklist. Having Oracle and IBM’s DB2 in the booth demonstrated that SuSE already had partners that buyers needed to build their future data center.

Which makes Red Hat’s recent sniping at Oracle amusing.

While SuSE, Oracle and IBM were aiming at enterprises, nobody was selling to the bottom of the market. MySQL, following the Open Source parade, slowly swallowed all DBMS action in the lower tiers. Yes, Oracle and IBM eventually released stripped down, limited access, largely unsupported versions of the mainline products. But by the time they reacted, the non-enterprise world had anointed MySQL the de facto SMB database. It came bundled on every release of SuSE, Red Hat, and whoever those other distros were.

The only people more annoyed by MySQL’s success than Oracle and IBM were the maintainers of Postgress (who figure into the story in a moment).

As the years rolled by and as Oracle acquired software companies faster than Bill Clinton acquires STDs, Oracle ran afoul of Red Hat in two ways: First, Larry Ellison brazenly (his only mode) went into competition with Red Hat, offering support services for Red Hat users with the added advantage of providing customers one throat to choke for technical support. Then he bought Sun, and by proxy bought MySQL. With MySQL an intrinsic part of the default LAMP (Linux, Apache, MySQL, PHP) stack, this put too many variables in Oracle’s control.

Which is why Red Hat followed IBM and is investing in an Oracle killer.

EnterpriseDB is an extended Postgress DBMS. Aside from offering a number of enterprise-ready features not found in MySQL, it does one thing that might just keep Ellison up at night – it mimics Oracle databases. It provides the same programming interface as Oracle, and thus allows Oracle-ready applications (SAP, et al) to run without the much more pricy Oracle DBMS. In other words, EnterpriseDB wants Larry’s money.

Which is why Red Hat is giving money to EnterpriseDB.

Oracle tried to take Red Hat’s support revenues, and now Red Hat is trying to take Oracle’s license and support revenues (oh, and IBM is helping EnterpriseDB in the same way).

In technology markets, nobody can go it alone. All vendors need partners. But tech alliances are about as stable as my ex-wife, and with less fidelity. They exist on the maxim that as long as each partner is helping the other make money, then the relationship lasts. When one partner causes the other to lose, then the partnership is weakened or broken.

Or partners are swapped.

Marketing strategists decide with whom to partner. They choose the alliances based on creating a whole product that they can bring to market. When we led SuSE’s strategy, recruiting Oracle was essential in bringing a whole product to enterprise IT buyers. Red Hat eventually did the same, and will remain on Oracle’s official partner list, because they still co-create the current whole product. But Red Hat sees that in the long run Oracle does not want to be a partner, but a competitor. Oracle wants to own the stack. Since the DBMS is Oracle’s revenue bedrock, Red Hat is reciprocating by attacking that revenue source through a new partner.

Expect Larry to retaliate … or buy Red Hat.

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T’is the nature of start-ups and other enfeebled entities.

However, a few outfits either had such interesting products or refined messaging that I would put them into the “watch these guys” category.

Top on the list was click2try. The first marketing lesson today is the company name. Though not 100% intuitive given what their product does, their name nearly creates instant cognition. A well thought-out company or product name can be the difference between cold and hot leads.

What click2try does is host a cloud where end users can create a private instance of software they wish to test drive. Users get a certain number of hours of free test time and the joyous experience of having the software installed, configured, ready and of having the whole stack saved in between sessions for instant reload with all configuration tweaks and data retained. End uses can buy extra time if their demos run long.

What impresses me about click2try’s business plan is that they have three separate revenue streams. End user play time is one stream. The other is commercial software vendors who don’t want to set-up their own demo clouds. They invest less, get started faster and get better results by outsourcing. click2try also offers a white box version of their cloud to vendors that want to bring demo cloud headaches in-house.

Literally, click2try earns money coming and going, from both vendors and buyers. Slick.

Slicker still was their presentation. Tom Callaghan was the click2try’s pitchman at OSCON. Tom and click2try know how to present, and by present I mean get people from a state of ignorance to a state of appreciation in a logical order. Their booth art gave you and idea of what they did (first step, grab the buyer’s attention). Tom delivered a well thought out elevator pitch that I’m guessing was under 18 words (second step, creating understanding and interest). The elevator pitch allowed anyone to understand the click2try gestalt and then ask questions peculiar to their own needs (which, when answered as well as Tom did, creates appreciation – third step).

The marketing lesson herein is that you must guide prospect from ignorance to appreciation quickly, and this is oddly done with well crafted baby steps – good display and copy, precise elevator pitch, ready answers to all common questions. If you cannot achieve this, you will fail.

Another cloudy contraption at OSCON was Twilio. They provide telephony services in a cloud with a tasty twist. Their cloud telephony platform is programmable, either as a service from Twilio engineers or by the customer. When customers call you, they dial a number in the Twilio cloud. The cloud pings your server where your code (PERL, PHP, Ruby, nobody cares) makes decisions, queries databases, or wakes the boss – whatever you are talented enough to code. Your server then sends instructions back to the Twilio cloud for telephony action. In short, low risk, low cost, completely programmable/integratable outsourced telephony.

The marketing angles are multi-fold. The weakest angle is that it is a cloud service, and thus very scalable. Most companies don’t grow so fast that their PBX boxes run out of horsepower, so floating on a cloud has limited market appeal. The actionable bit is that Twilio works with whatever technology you are already using. Running LAMP? You’re good. A Microsoft shop? Twilio can handle that … providing your Windows servers are not blue screened. Running a half breed HTTP stack on your G-Phone? It will fly.

Twilio’s floor pitch, though not as perfect as click2try’s, was good. Better still is their web site where they rapidly take visitors from curiosity to cognition … providing you make one unguided click. In their “how twilio works” page is a simple, effective Flash animation that describes the value proposition better than what is on their home page. I’m sure the simple fix will become apparent to them shortly.

Last on my list is Appko, which is a ham-handed abbreviation of “Application Company.” Contrast this name with click2try. Which company name more quickly communicates what they do and what they deliver? Appko may be a clumsy name, but it is one step ahead of Twilio.

I’m kinda found of Appko because they are executing on an idea I had years ago but lacked the gumption to launch. They preload a server with Open Source versions of the primary applications you need to run a business and a navigation wrapper around all of them. Order the box, plug-in two internet cables (external net, internal net) and get busy. They bundle and support major Open Source server-side applications. You can build/host a web site, facilitate employee collaboration, perform some HR functions, and more. When I coughed up the idea years back, I considered calling it “Business in a Box.” Not a great name, but it got the point across.

Appko confuses their customers a bit by calling their product “Appko CRM”, then explaining that the product does email, collaboration, document management, e-commerce, HRM, ERP, and other business functions far beyond CRM. One of the rules of marketing is to eliminate confusion. The best early sales pitches are the plainest. click2try did this well, Twilio did pretty good, but Appko’s pitch creates confusion from the opening line. Happily, this is easy to fix.

Appko’s target market is the SMB, heavy emphasis on S. Commonly these corporations lack anything resembling an expert IT staff. Typically Ma and Pa recruit their self-taught, geekish offspring to engineer their IT infrastructure. Finding, evaluating, installing, configuring, testing and then implementing a package of applications is so far beyond their capabilities that most never try. Many are turning to SaaS vendors for point solutions or NetSuite for a more integrated package.

Appko may have a long-term advantage in the market if they can broker or build integrations between these popular Open Source apps. The customer would receive a private, behind-the-firewall suit of tools with knowledge that the data is portable since the code is public. Appko benefits by investing next to nothing in software development, though they better be careful about support pricing (SMB’s are notorious tech support time wasters, bless their pointed heads).

I hate bottom fishing markets, but they are large and largely untapped. Appko is tapping them. They need to create buzz, mainly because all other forms of SMB promotion are cost prohibitive. They need to segment the SMB market and pick a juicy slice, adding tools that add delight to buyers in the segment. And they gotta get their pitch tighter, a process they can kick-start by talking to the folks at click2buy.

……….

Three companies with three unique products that have promise. One had a well thought, well honed presentation and a great name. Another had an odd name but respectable presentation. The last had an awkward/explainable name, but no smooth pitch. All other things being equal, on who would you bet your venture dollars?

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A number of elements indicate that Java is thriving, but in odd tangents and with uncertain bearing. I’m sure it was only coincidental that all Sun employees on site were wearing black shirts and near-death experience expressions. Sun staffers looked like people who woke up in a casket at their own funeral.

Or in Hell if they believe the rumors about Larry Ellison and his cloven hooves.

Exhibit floors are where you find the real pulse of an industry. Forget keynote fairytales which are often more about FUD than fact. When companies drop thousands of dollars on booth space and staff time – when spending shows their intent – that is where you learn how to place your bets in any industry.

After touring JavaOne, I’m buying more stock in Apple.

No, Apple was not demoing nor did the spirit of Steve Jobs introduce a new product. But many mobile handset manufactures and a couple of carriers were in the front of the exhibit hall trying to convince Java programmers that there is gold in them thar wireless hills. This says more about the mobile industry than the Java industry. Apple has proven that apps sell phones, and since Java is a dominate language on other handsets, device makers and carriers came to court coders and grow the set of popular apps.

There was even one vendor with a tool that turned Java into native code for iPhones (which don’t include a Java machine).

Also of note were seemingly out of place actors like eBay and Amazon. They were trolling for talent. Java is popular enough that a shortage of sufficiently skilled Java hackers remains. Top shelf companies like these rent booth space to collect resumes. If I were a young geek, I’d consider being a Java junkie. Not only is it a sane language but the pay scale seems better.

Being a former IT fellow and system programmer, what caught my attention this year is the emphasis of memory caching colliding with cloud computing. Make no mistake; clouds are the next phases of IT infrastructure. The 12% rise in my VMWare stock in the last two weeks is testament to that. More and more companies are moving to support private and public clouds, and a few more visionary vendors are rigging systems to support both.

Google showed that sharing cache memory across boxes is central to scalable systems. If you are uncertain where on the planet your servers may be, exploiting caching systems become critical. This explains both the why Terracotta was talking it up and why VMWare was parked in their booth. Clouds are great, from the virtual machine standpoint. Clouds could be clumsy from an application standpoint. Slipping cache code between a Java application and the Java virtual machine (not to be confused with the virtual server on which the virtual machine hosts the virtual app … virtually) is a slick way to make life in the clouds livable. More importantly it is an element that will make ad hoc application expansion from private into public clouds doable.

Oddly the most interesting technology on the JavaOne floor had nothing to do with programming in Java. Some excitable pups were promoting the Pulse “smartpen”. Despite my entire career being connected to technology, I’m not a gizmo freak. My cell phone is six years old. I don’t own a digital television (I might if broadcasters devise programming for intelligent adults, by which I mean killing off all ‘reality’ programs and their contestants). I haven’t even bothered to spring for a GPS to decorate my dashboard.

But I may have to get one of these pens.

These Buck Rodgers quills do two things once you put them into record mode. They digitize all your pen strokes across a piece of paper so that when you plug the pen into your computer, the pages are uploaded and allegedly ready for optical character recognition (I defy any software to read my handwriting, which alone qualifies me for medical school and a life of writing prescriptions). It also starts a voice recorder and the sound files are uploaded as well. In one tool you have everything necessary for gathering your note and diagrams while also capturing the discussion that led to the notes.

The marketing question then is why Pulse was peddling their pens at JavaOne? Because geeks like tech toys, and at an opening price of $149, it is affordable. Oh, and their products are Java powered. Now that’s worth noting.

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Using Open Source for the betterment of your products is well understood. Using Open Source to grind your competitors face into the dirt is more of an art. Yet when done well it accomplishes the primary objective of competitive marketing – attacking your opponent’s strengths.

For technology marketing tyros reading this, understand that attacking your competitors weaknesses is a losing game. Weaknesses are typically marginal worries to consumers. If your competitor’s weakness were serious then they would have never become a competitor. Even if the weaknesses were important, they can be corrected and thus your assaults will be short lived.

Attacking their strengths however is to eat their souls.

Your competitor’s strengths are what made them successful. Any time you can assault their strengths you attack the very foundation of their prosperity. Successfully making their strength into a weakness will do more harm than nuking their headquarters. After all, they can build new offices once the ground stops glowing.

The trick is that competitive strengths are … well … strong. You must make customers believe the opposite of the compelling reason to buy that your competitor has created. Often this is merely impossible. If one were to attack Oracle database strengths – their robustness and scalability in particular, attempting to convenience people that these were Bad Things – you would be laughed at as their slapped you into a straight jacket.

Open Source allows you to do something even more insidious. It allows you to attack a competitor’s strength by promoting the same strength. And no, I am not wearing a straight jacket at the moment. It is out at the cleaners.

IBM lost the battle for the big database market. Depending on whose numbers you like to use, DB2 is well behind Oracle, Microsoft and MySQL. With Oracle now positioned to control the fate of MySQL via the Sun Micro acquisition (assuming that antitrust lawyers don’t put Larry Ellison in a legal straight jacket), Oracle runs away with nearly all of the market. Granted, MySQL does not add much to Oracle’s top-line, but the Open Source option keeps customers in their camp by covering all bases (graphic by JoinVision.com).

Unless, of course, there is an alternative.

While Oracle is acquiring MySQL to provide product to the low and mid market, IBM is investing in EnterpriseDB to reduce Oracle’s high-end revenue stream. EnterpriseDB offers the Open Source Postgress database with an added layer than makes it look like an Oracle instance. Users have Oracle’s PL/SQL interfaces atop a database that costs about 90% less than what Larry wants. Granted EnterpriseDB and Oracle databases are an apples and kumquat comparison. Oracle offers a lot of features that EnterpriseDB will not provide.

By and large that doesn’t matter.

IBM’s move to include EnterpriseDB with DB2 licenses attacks Oracles strength on two fronts. First, it gives customers a reason not to buy Oracle instances for non-critical applications. Customers need to have the number of database technologies kept to a minimum so developers and support staffs have less technology to master. If customers do not need the esoteric aspects of an Oracle database, having EnterpriseDB and IBM support are good options.

The juicy bit though is that IBM is using Oracle’s PL/SQL interface to bleed off enterprise adoption of MySQL. Since cost savings are the primary attraction to Open Source databases, EnterpriseDB offers Oracle shops a means for achieving a unified set of interfaces to databases while not enriching Larry, who according to recent news stories is the highest paid CEO in the United States, making north of half a billion bucks in 2008.

IBMs move then is removing the advantage of Oracle’s MySQL acquisition and simultaneously attacking Ellison’s high end revenue stream. Poor Larry will likely only make $400M this year.

Expect more of the same from other vendors. Open Source creates products that offer real value and real competitive threats. These products can be leveraged to hobble competitors. Large vendors will continue hunting for Open Source upstarts that can cause competitor convulsions.

In this instance though, I wonder if there is another feature afoot. IBM previously participated in a $10M round funding for EntepriseDB. They have more than a passing interest in EnterpriseDB. In theory EnterpriseDB’s PL/SQL layer is portable. Since IBM is bundling EnterpriseDB with DB2, there is a chance that the EnterpriseDB application interface could be ported to DB2, which offers some of the esoteric database features required by large enterprises. This may be the beginning of a concerted program by IBM to not only block new Oracle sales, but to migrate existing accounts.

You gotta love technology marketing. It’s like warfare but we use bucks instead of body counts to keep score.

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I toss that question at an occasional CIO and get borderline lucid answers. Most don’t yet use clouds but lust after them. Others leverage public clouds for non-privileged and mission-uncritical work. A scant few have cobbled together their own private clouds (p-clouds).

P-clouds and rentable clouds are as similar to Sherman tanks and kangaroos.

The promise of agile clouds is that you would be able to establish your own internal p-cloud and extended it ad hoc to external, rented cloud resources. Currently this requires either a significant amount of home grown engineering or adherence to one or another public clouds tools and management protocols.

Either approach is anathema to IT.

All radical growth spurts in IT technologies have occurred when open standards were popularized. UNIX killed MPE, VMS and other also-rans. Likewise Linux is slowly killing proprietary UNIX and blocking Windows Server growth. TCP/IP and Berkeley Sockets killed Netware, Vines and a slate of sluggish competitors. x32 and x64 chips have all but eliminated SPARC, Itanium and other red-headed step children.

Standards make stuff happen because it invites commoditization and interoperability, the top two CIO wet dreams.

It is unsurprising then that a number of the smarter industry players are pushing standards for cloud computing. When a document titled the “Open Could Manifesto” is singed by IBM, Sun, VMware, Cisco, EMC, SAP, Advanced Micro Devices, Elastra, Akamai, Novell, Rackspace, RightScale and GoGrid, you see that standards are as important to vendors as well as their customers.

Oddly, HP and Microsoft are not on the list of signatories.

Microsoft’s absence is understandable, as is Amazon. Ballmer’s bezerkers have launched Azure. In their effort to own everything, Microsoft wants no part of plans that commoditize clouds. Amazon is as an understandable absentee too. Having popularized clouds they do not wish to diminish their lead in the industry.

HP however is puzzlement. The manifesto asks vendors to “ensure that the challenges to cloud adoption (security, integration, portability, interoperability, governance/management, metering/monitoring) are addressed through open standards.” HP has made good profit from standards be they PCs, servers or the network management protocols that feed their still wildly popular Openview suite. Perhaps HP was excluded from the manifesto group as IBM/Sun merger talks were in progress. Nothing marginalizes a competitor quite like excluding them from a standards group.

In their trashing of the manifesto, Microsoft marginalized itself.

The bugga in the boo is that the manifesto is nothing more than a declaration of desire – a love letter to the market. It sets forth high-level principles for cloud vendors to adopt and little else. It is a more threat than action – a way to get competing vendors to either commit to open interoperability or appear to the public as old-school lock-in tech companies (hence Microsoft’s absence). Like other religions, it articulates noble goals through pretty words.

The beheadings come later.

The Open Cloud Manifesto web site is sparse – more of a staging ground for discussion than a hotbed of action. Without action, without translation of high minded desires into concrete cloud interoperability, it stands as nothing more than a wiki of wonder. Let’s hope that IBM buys Sun and repurposes it as the leader in open cloud technology, using the Open Cloud Manifesto organization as engineering epicenter to the next wave of IT infrastructure.

Finally, a good use for Sun.

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Around the millennial epoch I helped SuSE whelp the SuSE Linux Enterprise Desktop (SLED), a product that is till on the Novell price list. Growing frustration with Microsoft viruses, continued vendor lock-in and the inherent lower cost of an Open Source desktop were hailed as the beginning of the end of Microsoft’s dominance.

Yeah. I didn’t believe it either.

SuSE arguably had and still has the best alternative to a Microsoft desktop, and considering that it is not Vista, perhaps the best desktop available. But like many good technology solutions it never took the market by storm despite continued frustration with Vista, continued vendor lock-in and the inherent lower cost of an Open Source. Market dynamics and realities stopped SLED’s march.

“The reality is that (the Linux desktop) is a slow, gradual, unstoppable growth,” said my buddy Jeremy White at CodeWeavers, a crew that knows more about Linux desktops than Torvalds. “Emphasis on ‘slow’. Growth is steady, but measured in a fraction of a percent and mainly overseas.”

The reason Linux desktops have never been a big hit with businesses is because no segment of the market sees enough advantage. Technically challenged small businesses have enough to deal with, and can’t even migrate away from Windows 98.

Midsized firms have the technical skills required, but the cost savings do not justify it. With discounts, the combined Microsoft operating system and common office applications cost about $200 a seat. If we assume a business with 500 employees and a four year hard/software life cycle, that is an annual expense of $25,000. This savings would be entirely wiped out by the switch costs and requisite hair plugs for the IT staffers who ripped out their own follicles during the migration effort.

Enterprises simply have too much inertia. They have invested heavily over the years in management infrastructure and IT expertise with Windows. Conversion to a Linux desktop might be profitable, but the scope of the project (not to mention technology territoriality) scares away IT staffs with urgent issues, like installing more network bandwidth so play Gears of War on company time is more enjoyable.

Whatever promise Linux desktops had in the early days were hampered by a premature rush to deploy. One former Novell product manager told me “There were a million dirty little secrets of failure.” Many of the big deployments heralded in the trade press never happened. He noted that lawyers panned early editions of Open Office for the simple lack of strike-through fonts. Forget retraining users when the basic tools were unusable.

But the Linux desktop market is growing, and will (eventually) create a significant dent in Microsoft’s territory … someday. In Asia and in developing countries, Linux is becoming the de facto OS for all computers including desktops. This includes foreign enterprises. Assume that their desktop administrators make $15,000 a year. It is cheaper to have their administrators and support staffs learn GIMP and train all employees than it is to buy copies of Photoshop. Disparity in economics drive differential rates of adoption.

This regionalized momentum will not directly affect industrialized countries, though over time we will have to deal with incoming documents in native Open Office formats. In industrialized countries Linux desktops will be found in the enterprise, but only on techie desks (but then again it was the techies who brought Linux servers into the enterprise, and we see where that led). There will be niche uses, including virtualization controllers and some thin clients.

Yet Linux adoption will grow mainly from consumers. And, yes, I did take my medication this morning.

The tech industry inverted in the new millennia. It used to be that computer technology was designed for business first, and that technology later filtered down to consumers. Now consumers are leading in many fields (laptops, cell phones, etc.) and innovations for consumers later reach the enterprise. How many enterprises are providing Phones or their equivalents to employees? How many will five years from now?

This is where netbooks and cell phones come into play. Devices people use the most set their expectations for usability. Though in their nascent stage, netbooks (which are primarily Linux based) are becoming the tool of choice for many households who now do everything on the web. They use Google Docs, Quicken Online and keep family photos on Flickr. The old concept of a laptop, much less a desktop, is gone. And Linux/Firefox has become the OS/UI with which they are most accustomed.

Then there are cell phones. Android is easing past its growing pains and ready for broader adoption. Palm is resurrecting itself with the Linux-based Pre. Motorola, HTC, Samsung all build Linux handsets. Android and the Pre show Linux can be cooler than Apple. People use their smart phones more than their netbooks. Thus usability levels of expectations are being set by smaller devices that are used more frequently, and over which Microsoft does not have the same leverage as with desktops.

I won’t predict that Linux will rule the end user space (and if I knew this for sure, I would keep it between me and my stock broker). But like life, Linux finds a way. It is the original computer virus, able to infiltrate every hardware platform. It’s only limitations appear to be the imagination of developers … who are smart enough not to tie ribbons around applications.

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In very short order (relatively speaking) the mobile market has seen:

• Google/Android advance a Linux mobile operating system
• Symbian convert to Open Source
• Motorola release Eclipse-based mobile development tools
• Verizon open its network to certifiable devices not sold by Verizon
• Wi-Fi handsets are now commonly sold by network carriers, eliminating some data network revenues

In short, the mobile market has opened up and this trend will accelerate (which is seemingly impossible, but I never bet against an avalanche). Two dominate forces are causing this to happen: competition and customer resentment.

In a rare moment of governmental lucidity, regulatory agencies in charge of frequency allocations made sure that no company could monopolize the cellular industry. This came as a huge surprise to AT&T who is unaccustomed to real competition, and it showed in their perpetual inability to focus on their market mission.

Congress — in an even rarer show of caffeinated consciousness — made your telephone number your property, forcing cellular carriers to release your number if you ever decided to switch to another network. This removed vendor lock-in based on the obvious need human and business continuity through numerical IDs.

Competition required each cellular providers to keep trying new things in order keep their customers happy, and thus keep their customers. Better and simpler service pricing, faster data networks, fancier and heavily subsidized handsets. The technology and markets have evolved so rapidly and brought so much new end-user convenience that many people would rather do without television than their mobile handset.

But there was a weakness in the market induced when the carriers tried to keep customers locked-in. The choice of handsets for any carrier was limited to what they sold and supported. The back room economics of this had to do with the terms of your service contract. The logic (so to speak) went like this:

• To encourage you to subscribe to our services, we’ll sell you a $500 handset for $1.95 (we, the network carrier, eat the $498.05)
• In turn you agree to subscribe to our services for no less than two years, and pay massive fees for an early cancellation
• Don’t worry, we’ll earn enough off of you in two years to more than make-up for this initial loss (unless of course you don’t use your hands free kit, fly your car off a bridge, drown and thus fail to pay your cellular bill on time)
• And if you use some foreign device on our network, don’t expect to get any help from us

The carriers then would write sole-source deals with handset manufacturers for the latest and niftiest new handsets. So if you wanted a SuperCell X400L then you could only get it by subscribing with Honest Earl’s Cheapo Celluar. This limited the number of X400Ls, the number of applications and accessories that worked with it, and thus your choices.

This model is about to break and break hard. As more and more people start carrying these portable computers we call cell phones, they want more functionality which means more applications. Carrier network are not software companies and cannot possibly design every type of application for their set of phones. Thus, customers are a bit disgruntled by the limitations of what handsets run on what networks. What do you mean I have to subscribe to Sprint is I want to play Mega Reversi?

Led by the techie caste, people have started using “unlocked” devices — unsupported devices on carrier networks. The carriers may offer support for unlocked devices, but the end-user success rate has been high enough to spawn a thriving market in unlocked devices. This is in part because the handset manufacturers earn a better margin by selling more directly to the customer and also broaden their markets in the process. Want an AT&T Tilt without the AT&T? Buy an unlocked HTC 8925 and slip in your SIM card from your old Alaska Wireless handset (unwise if you are not in Alaska).

Vendor lock-in was beginning to break, so the rest of the market decided to help the process along. Nokia will gladly sell their handsets to anyone as will HTC. Google wants to make one operating system to cover all cell phones (which has to keep Steve Jobs up at night) and Symbian was released into the wild as Open Source to counter Google. The networks are beginning to see the trend and not fight it.

When competition is assured and customers can collaborate on alternatives, it is better to lead the trend than to be crushed by it. Cellular customers will have the final say and it will eventually be that all devices will work on all networks (tower protocols being the current, and perhaps temporary limit).

Want to make some money? Start thinking about mobile applications. That is where the next next thing will be.

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Ignore the sales numbers from Novell and Red Hat. They tell only part of the story, namely the demand by larger institutions who must ensure success and have support. These sales figures do not even come close gauging unsupported replications of subscribed distributions, hosted Linux (which often is self maintained), departmental servers, all the OpenSuse and Fedora installs, and the occasional renegade Linux laptop.

And those are the small markets.

I’ve been watching the embedded space more and more. Silicon Strategies Marketing has clients in the mobile phone business, the Linux business, and now in the embedded Linux space. We have been mapping where embedded Linux is finding traction, and some of the issues within that market.

The question is “where is embedded Linux not being used?”

• A relative of mine who works on Defense Department and “spook” contracts notes that Linux is the favorite platform for all military and intelligence embedded applications. As he phrased it “We can’t afford to reboot a spy satellite every few hours.”
• Linux is used in routers from a lot of different manufactures. Networking is a core Linux strength and with an embedded web server, it is easy to create user friendly interfaces.  And now everything needs to be network savvy.
• Phones are just starting to use Linux, but the open nature of the devices and the ability to plop new native applications on them is a strong differentiators. This is part of the reason Google went with Linux for G-phones.

Devices need to be smarter than in the past. This means they must have logic. It is far better to use an embedded operating system that has broad support. That really means Linux or Windows.

Linux wins mainly for two reasons:

1. It is more stable. Google wouldn’t run their entire product on Linux if it weren’t.
2. It is modular and tiny.

It is that last point that is perhaps most important. Much has been made of Window’s lack of modularity. WE (Windows Embedded) is considered by many to be a poor hack of XP, where fragility was induced by wholesale ripping apart of the operating system. I cannot comment directly, but this is the growing reputation. Some acquaintances of mine at Circuit City’s HQ said a WE deployment on cash registers was abandoned due to endless problems, which supposedly were induced by removing pieces of XP and seeing interwoven parts of the OS die.

Linux is by design module from top to tail. Much of Linux’s success has come by its ability to upgrade (or roll-back) discreet parts of the total package without disrupting other parts. This also means you can remove big chunks of unneeded functionality without much work or fear, creating custom versions of the OS.

This is why Linux will own the embedded space. When whittled down, the Linux kernel can be nearly 10oKB small, which is tiny. Total RAM requirements can be less than 4 MB. This makes putting Linux into nearly any device possible. Add the ability to customize all upper-level packages to operate well within small-device space, and you have something with which Microsoft cannot compete and simultaneously chase dreams of acquiring/integrating Yahoo.

Here’s the kicker: more smart devices are hitting the market all the time. Your dashboard (which soon will have integrated GPS navigation DVD player, Bluetooth interfaces, and more) is embedded. Your cell phone is embedded. Your home network is built on embedded devices. Your oven might require embedded logic to keep you from burning dinner … again. MP3 players need embedded OSs.

The list is endless and growing. The question then is “How do I profit from this?” That’s my secret for now.

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Now we see how the two work together and create what some might view as the End of Days (of course those same people had apocalyptic visions when Microsoft announced NT).

The big news of the day, week, month, and thus far the entire year is that Sun Micro (of all people) is buying MySQL for a cool billion dollars. So much for Mister Mickos growing rich slowly. This takes the world’s most popular DBMS (in terms of number of installations) and gives it a global sales and support team. Not bad for a hardware company.

(The wisdom of forfeitting 8% of Sun’s current market capitalization is suspect however — you can buy a lot of offshore programmer time for a bill)

MySQL, like Linux, is Open Source and a force for commoditization of the IT infrastructure. Vendors who waited too long to realize that their markets were being commoditized (like Sun and their UNIX servers) get clobbered. So Sun is shifting and grabbing strong players in the commodity technology business.

Sun’s CEO Jonathan Schwartz seems to understand the mechanics of commodities, something his glib predecessor McNealy did not. Schwartz recently noted:

“Exxon just reached a half a trillion dollar market cap based on a commodity. Commodities are where it’s at.”

This is a mighty switch for Sun. In the past they retreated to high-end servers and software in order to escape the forces of commoditization, and found themselves selling to fewer and fewer customers. Wealthy customers they were, but the higher up the technology curve Sun drove, the less total revenue they made.

Now Sun is submitting and planning on profiting in the volume business that is commodity technology.

“MySQL is by far the most popular platform on which modern developers are creating network services … The adoption of MySQL across the globe is nothing short of breathtaking. They are the root stock from which an enormous portion of the web economy springs.”

If I were Larry Ellison, I’d be tempted to take Scwartz’s scalp … or at least that ratty looking ponytail. Oracle is on its own buying spree in an attempt to escape the commoditization of their piece of the IT infrastructure. Oracle is buying and building applications and middleware (mainly for high-end customers), and added to their portfolio by purchasing BEA.

Anyone else see what I’m seeing?

Oracle is running away from commoditization the same way Sun once did. Sure, Oracle now owns most of the popular commercial CRM packages, but that doesn’t bother SalesForce.com or SugarCRM, who are taking different paths to commoditizing that application segment. From a recent consultation I had with Oracle’s middleware group, I know they are feeling the heat of commoditization in the developer tools category as Eclipse, JBoss, and other software take all recognizable market mind-share. Internally at Oracle, the two forces have been reconciled.

Larry Ellison makes very few mistakes, and if his charge up the stack is a mistake, it will take a few years to see cracks in his castle wall. But over a five year span, I would not bet on Oracle’s strategy.

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I’m pondering these realities as I comb through reports in the wireless market, where Silicon Strategies has a new client. The evolution of the wireless market will soon make a shift and the smarter vendors are rapidly adapting to the inevitable.

First, a musing on closed and open markets. In closed markets, the vendor has control by virtue of either a monopoly or through customer lock-in due to the high cost customers face in switching to different technologies. The IT technology industry was a closed market for a seeming eternity until the folks at Berkeley began porting and promoting their flavor of UNIX (which could be considered the original computer virus). When Sun Micro and other vendors began using open standards (like UNIX) as a wedge into the market, the closed system protected by high switching costs began to fade. Microsoft has a virtual monopoly on desktop operating systems, and we may be seeing the first cracks in that closed system as well.

Open systems work on the principle that choice creates other competitive realities and opportunities. For example, there is not a dime’s worth of technical difference between most of the Linux distributions. Linux purchasing decisions are primarily based on other issues, such as the perceived financial soundness of the vendors or their dedication to Open Source principals (or in the case of Novell, the seeming immunity from litigation by Microsoft).

TV cable operators are another case study of closed systems. Due to the dubious nature of local franchise laws and the instituted monopolies they create, cable carriers have zero incentive to innovate. It wasn’t until home satellite came into being that there was any movement by the cable companies, and even that has been lackluster due to the limited competition created between these two closed systems (like the limited innovation that existed between VMS and MPE — and if those abbreviations don’t date me, nothing can). There have been various attempts to create an standardized set-top box for cable consumers, but higher margins are created by renting gear to couch potatoes instead of letting customer buy one of many makes at Circuit City.

Now we are about to see a fissure in the wireless market. Google started the collapse by prodding the FTC to mandate some degree of open access by whomever wins the bidding war of the soon-to-be re-purposed 700Mhz spectrum. Google’s stand (and now the FTC’s as well) is that whomever wins temporary ownership of this chunk of air must make some or all of it open to allow any application, and certified device, any wireless service and any third party services provider to tap into the 700Mhz waves.

Naturally, this raised a stink from every vendor who had designs on any piece of this space. Cisco complained. Verizon cried foul. Even Satan, who current resides in Redmond, grumbled. But as soon as the FTC put their bureaucratic foot down … well, people started changing their tunes. Verizon, who had been one of the noisier detractors to Google’s open system scheme not only turned their opinion 180 degrees, they started opening the existing network, presumably as a show of philosophical acclimation to curry FTC approval.

In other words, once the inevitable opening of cellular services were going to be mandated somewhere, Verizon decided to join the new paradigm than fight to preserve the old.

Good move on their part. Sun rode the UNIX revolution, and took a great deal of market away from competitors, and opened new markets as well. Later in life they fought the Linux revolution and lost big. Both UNIX and Linux were opening previously closed systems, and Verizon learned from Sun’s mistake.

There is a truism among market strategists that notes the best way to win in a market is to change the rules. But the same applies when the rules are changed against you. If the change is inevitable, or worse still mandated by law, then the smart people will use the new rules to their advantage, create new differentiators, and leave their competition to slowly die.

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