The New Software Paradigm

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17 Φεβ 2014 (πριν από 3 χρόνια και 5 μήνες)

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© 2004 Black Duck Software, Inc. All Rights Reserved.

Copyright © 2004
-

2005 Black Duck Software, Inc. All Rights Reserved.

by any measure

CHOATE HALL & STEWART LLP


Open Source:

The New Software Paradigm





© 2004 Black Duck Software, Inc. All Rights Reserved.

Copyright © 2004
-

2005 Black Duck Software, Inc. All Rights Reserved.

Copyright © 2004
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2005 Black Duck Software, Inc. All Rights Reserved.

CHOATE HALL & STEWART LLP



What is a copyright?


A property right created by statute in each jurisdiction


Recognized by other jurisdictions through treaties


Berne Convention is most common


Arises upon the creation of a tangible embodiment of
expressive content


Does not protection ideas, only expression


Gives the owner the right to prevent others from using the
property


Copying


Creation of a derivative work


Insertion in a compilation or collective work


© 2004 Black Duck Software, Inc. All Rights Reserved.

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2005 Black Duck Software, Inc. All Rights Reserved.

Copyright © 2004
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2005 Black Duck Software, Inc. All Rights Reserved.

CHOATE HALL & STEWART LLP



Who owns a copyright?


The author unless the author is an employee


The ownership of an employee’s copyrightable work
product is automatically vested in the employer



Why does ownership matter?


Only the author can enforce a copyright


Only the author can transfer ownership of the copyright
to another


Assignment of a copyright must be in writing


Only the author can license others


A license can be granted orally or in writing,
expressly or by implication


© 2004 Black Duck Software, Inc. All Rights Reserved.

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2005 Black Duck Software, Inc. All Rights Reserved.

Copyright © 2004
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2005 Black Duck Software, Inc. All Rights Reserved.

CHOATE HALL & STEWART LLP



What is a license?


Permission by the owner of property to take some act that
the owner has the ability to control




What is a sublicense?


A license granted by a licensee


The right to grant a sublicense must be expressly stated
in a license and will not be implied



© 2004 Black Duck Software, Inc. All Rights Reserved.

Copyright © 2004
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2005 Black Duck Software, Inc. All Rights Reserved.

Copyright © 2004
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2005 Black Duck Software, Inc. All Rights Reserved.

CHOATE HALL & STEWART LLP



What is the license for a book?


A book is not licensed, it is sold.


The sale of a book is not the sale of the copyright, it is the
sale of a copy.


The rights of the owner of a copy of a copyrighted work are
in the copyright statute.


Buying a book does not give you the right to copy the book.


Fair use gives you certain rights to copy portions of the
book.


The sale of used books demonstrates the difference
between the sale of a copyrighted work and a license for a
copyrighted work.


There is no market for the sale of used software.

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2005 Black Duck Software, Inc. All Rights Reserved.

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2005 Black Duck Software, Inc. All Rights Reserved.

CHOATE HALL & STEWART LLP



Software is the sale of a license

Companies wanted to have it both ways, the best of all worlds.


They wanted:


All of the intellectual property benefits of a license
(control over use and resale)


To avoid sales taxes based on the sale of tangible
personal property (a license is an intangible)


To treat a transaction as a sale of goods for revenue
recognition and income tax purposes


But Uniform Commercial Code Article 2 on the Sale of
Goods not to apply because software is the grant of an
intangible right and not a good


© 2004 Black Duck Software, Inc. All Rights Reserved.

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2005 Black Duck Software, Inc. All Rights Reserved.

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2005 Black Duck Software, Inc. All Rights Reserved.

CHOATE HALL & STEWART LLP



What is the same between commercial
and open source licenses?


Both are proprietary


Both are based on ownership of intellectual property


Neither transfer or relinquish ownership


Both grant certain rights and retain others


Both are governed by the same laws


Both are often incompatible with each other if there is an
attempt to combine software under different licenses


NB


will start categorizing as
open

source versus
closed

source

rather than commercial or proprietary versus open
source


© 2004 Black Duck Software, Inc. All Rights Reserved.

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2005 Black Duck Software, Inc. All Rights Reserved.

Copyright © 2004
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2005 Black Duck Software, Inc. All Rights Reserved.

CHOATE HALL & STEWART LLP



What is different about open source
licenses?


Different goals


Written by developers not lawyers


Enables modification by unidentified copyright owners


Encourages uncontrolled combination and reuse


Some open source licenses are not contracts


All commercial licenses are contracts


Open source licenses have no acceptance procedures


Open source licenses disclaim all responsibility for software
and claim to be excluded from commercial law requirements


Some open source licenses impose sharing obligations on
users

© 2004 Black Duck Software, Inc. All Rights Reserved.

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2005 Black Duck Software, Inc. All Rights Reserved.

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2005 Black Duck Software, Inc. All Rights Reserved.

CHOATE HALL & STEWART LLP



Business Benefits of Open Source


Reduced R&D


Rapidly increased “go
-
to
-
market” through leveraging
the viral nature of projects


Creation of install base


“monetizing future
users”


Off load maintenance of infrastructure products


Address competition

© 2004 Black Duck Software, Inc. All Rights Reserved.

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2005 Black Duck Software, Inc. All Rights Reserved.

Copyright © 2004
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2005 Black Duck Software, Inc. All Rights Reserved.

CHOATE HALL & STEWART LLP



Business Challenges of Open Source


Evolving business models


Not many proven business paths or exits


Demand for developer mindshare outstripping availability


Competitive FUD


Confusing licensing landscape


Scarce experienced or knowledgeable business resources

© 2004 Black Duck Software, Inc. All Rights Reserved.

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2005 Black Duck Software, Inc. All Rights Reserved.

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2005 Black Duck Software, Inc. All Rights Reserved.

CHOATE HALL & STEWART LLP



“Old Guard” Challenges


Proprietary companies: challenge from open source competitors


Sun Solaris
-

Linux


BEA/IBM
-

JBoss


Siebel/SalesForce
-

SugarCRM


Open Source Responses


Sun
-

OpenSolaris


BEA


Beehive


CA


Ingress


Strategic Responses


IBM
-

Gluecode acquisition


IBM


Eclipse


HP


Certification and indemnification


Virtually all proprietary vendors are working on an “open source” plan





© 2004 Black Duck Software, Inc. All Rights Reserved.

Copyright © 2004
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2005 Black Duck Software, Inc. All Rights Reserved.

Copyright © 2004
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2005 Black Duck Software, Inc. All Rights Reserved.

CHOATE HALL & STEWART LLP



Commercial success factors
-

startups

Open source companies


Ability to define, garner and/or exert “Control” of IP


License revenue


Don’t be afraid of proprietary elements to the
business model


Enterprise management experience


Engage the right community


Don’t ever forget your community

© 2004 Black Duck Software, Inc. All Rights Reserved.

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2005 Black Duck Software, Inc. All Rights Reserved.

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2005 Black Duck Software, Inc. All Rights Reserved.

CHOATE HALL & STEWART LLP



Commercial success factors
-

startups

Proprietary companies


Establish community credibility


Build the right community, balance IP retention with
community building


Incorporate open source in your company DNA


Company business model must be fundamentally sound


no panacea


Technology should be modular not monolithic


© 2004 Black Duck Software, Inc. All Rights Reserved.

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2005 Black Duck Software, Inc. All Rights Reserved.

Copyright © 2004
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2005 Black Duck Software, Inc. All Rights Reserved.

CHOATE HALL & STEWART LLP



Business Models


License revenue
-

open source companies


Dual licenses similar solution
-

proprietary and open source
version


SugarCRM


License revenue
-

mixed proprietary and open source companies


Different offerings


JasperSoft, Zend, Actuate


Subscription/Maintenance


Business model?


Red Hat, MySQL


Services


Glue, pure services, “improving/packaging” open source


Spikesource, OpenLogic, JBoss, CA, Digium, Blackduck



© 2004 Black Duck Software, Inc. All Rights Reserved.

Copyright © 2004
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2005 Black Duck Software, Inc. All Rights Reserved.

Copyright © 2004
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2005 Black Duck Software, Inc. All Rights Reserved.

CHOATE HALL & STEWART LLP



Open Source Investment


Earliest investments


1999
-

pre
-
bust


Greylock/August: Cygnus Solutions 1999


Benchmark: Collabnet


Beginning of the land rush


2004+


Kleiner Perkins: Spikesource


DFJ: SugarCRM


Partech/Doll Capital: Jaspersoft


Mayfield: IT Groundworks


Shift from proprietary to open source


Partech: Investor in Business Objects, but now investing in
open source competitor, Jaspersoft


Successful exit strategy?



Gluecode: $11.5M investment in three rounds(>$20M exit)


© 2004 Black Duck Software, Inc. All Rights Reserved.

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2005 Black Duck Software, Inc. All Rights Reserved.

Copyright © 2004
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2005 Black Duck Software, Inc. All Rights Reserved.

CHOATE HALL & STEWART LLP



Moving from Proprietary to

Open Source Model


Lose trade secret protection and license copyright
protection


Patents and trademarks become critical


License choice


Critical role of community


Code architecture


Integration of proprietary and open source code


© 2004 Black Duck Software, Inc. All Rights Reserved.

Copyright © 2004
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2005 Black Duck Software, Inc. All Rights Reserved.

Copyright © 2004
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2005 Black Duck Software, Inc. All Rights Reserved.

CHOATE HALL & STEWART LLP



Compliance Policy


Whether Open Source is used in infrastructure or
product every company should have an Open Source
Policy.


Inventory what has already entered the company.


Develop policy for handling third party software.


Develop effective procedures for implementing the
policy.


Consider automated solutions


Educate employees about the policy and
procedures.


Build mechanisms for addressing open source in
M&A due diligence.


© 2004 Black Duck Software, Inc. All Rights Reserved.

Copyright © 2004
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2005 Black Duck Software, Inc. All Rights Reserved.

Copyright © 2004
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2005 Black Duck Software, Inc. All Rights Reserved.

CHOATE HALL & STEWART LLP



Conclusions


Open source is really the forefront of a waive of intense
collaboration and interdependency


It is a licensing model, a business model but most importantly it and
it is an entirely different approach to building value


Automation is essentially to make all of this frictionless