Red Hat: BofA Downgrades; Cites Troubles With JBoss

(via Matt) Following news that Novell may be building momentum comes news that Bank of America has downgraded RHT. As is often the case with stock analysts, more are piling on the downgrade now. From Barrons:

Red Hat (RHT) shares are lower today after Bank of America analyst Kirk Materne cut his rating on the stock to Neutral from Buy. His price target goes to $21 from $23.

Materne says the company’s fiscal third quarter ended November should be “solid,” but that its JBoss application server software “continues to have trouble gaining momentum.” He adds that there are “few catalysts on the horizon” that could add to current billings and cash flow growth estimates for the fiscal year ending in February 2008, or for that matter, FY 2009.

Meanwhile, Trip Chowdhry, of Global Equities Research, also downgraded the stock today, moving to Equal Weight. Chowdhry contends that the company’s business fundamentals are “deteriorating,” and that the JBos acquisition “is a complete failure.”

Chowdrhy also asserts that Red Hat Linux “is gradually being relegated to a position of non-criticality.” He also says Red Hat is losing momentum in the BRIC countries – Brazil, Russia, India and China – to Microsoft (MSFT) and Oracle (ORCL). And he says hardware vendors IBM and Hewlett-Packard are providing support and bug fixes for Red Hat Linux since “vendors feel Red Hat support is not enterprise class.”

Not least, he says that developer momentum is shifting away from the Open Source LAMP software stack – Linux, Apache, My SQL, PHP – and toward Microsoft’s .Net platform.

It’s true that Red Hat is having a little more difficulty than it anticipated integrating JBoss. When you acquire an Open Source company, much of what you are acquiring is the people. Many of the top JBoss people have left. The cultures were different, the sales models were different and I’d guess given the information Red Hat has now, they’d have done things a little bit differently. Hindsight is always 20/20 and I think the long term benefits for Red Hat and JBoss are still there.

Moving on to the Global Equities Research comments, I have no idea where Trip is getting his information. All other leading indicators I’ve seen indicate that Linux and Open Source are doing quite well in BRIC and other emerging markets (and in many of those markets Microsoft is either having difficulty gaining traction or is gaining traction by discounting heavily). Additionally, more and more companies are clearly choosing Linux for absolute mission critical applications. The NYSE is a recent example of this. Finally, LAMP adoption in general has been seeing very strong growth and MySQL AB still seems headed toward its IPO, despite the weakening US economy. It just goes to show that an “analyst” can say just about anything they want, typically with little to no justification or real repercussions.

–jeremy

Refining MySQL Community Server

MySQL AB has announced some changes in the way it handles the Community and Enterprise releases of MySQL. From the post:

The changes are in the areas of release policy and stability of MySQL Community Server and in the availability of MySQL Enterprise Server.

The changes start from the question: “How can we better target MySQL Community Server to the community and MySQL Enterprise Server to the paying customers?“. Many of them originate from our ongoing discussions with the Linux Distributions, some of whom have been distributing MySQL Enterprise Server to their user base, since MySQL Community Server hasn’t conformed to their needs of feature stability and release schedule.

Our intention is for MySQL Community Server to be very good, and for MySQL Enterprise Server to provide further value on top of that. The five changes, in short, are:

1. New features and community contributions will go into the next development tree. The new features will not be applied to a current GA release, ensuring stability for the Community Server. At the time of writing, the development tree is MySQL 5.2.
2. There will be at least two yearly “mature GA” (currently MySQL 5.0) binary builds. They aren’t scheduled, but usually triggered by grave security vulnerabilities.
3. When a version of MySQL initially goes GA (as 5.1 soon will), the company will release binary builds of the new GA product every month for a period of several months until it reaches a point of suitable stability/maturity to be considered a “mature GA” release — as described above.
4. There will be four yearly “mature GA” (currently MySQL 5.0) source releases, predictably scheduled, to be released once every quarter. These will be ideal for use by distributions shipping MySQL.
5. The current Enterprise source tarballs will be removed from ftp.mysql.com. These will move to enterprise.mysql.com, and will be available for our paying subscribers only.

This has sparked quite a few responses in the community, most of them negative. For one, it’s an extremely confusing setup that builds on what was already a confusing system. Second, it appears to go against what they are attempting to accomplish. Why would supposedly stable “Enterprise” builds be released more often and be tested by less people?

To me, that’s not the worst of it however. At least on the face of it, it seems like a bad business decision. Let me make one thing clear: I really like both MySQL the product and MySQL AB the company. They have done a ton for Open Source and I’d like nothing more than to see them make boat loads of money. The way I see it though, their adoption process is usually something along the lines of: technical person installs MySQL, something critical ends up getting implemented using it, managers insist on a support contract. Maybe what I’ve seen it not representative of the average MySQL sale, but if it is this move should prove quite bad for the bottom line. By making the Enterprise product harder to implement, it makes a support contract less likely in my mind. I thought they were trying to sell on value adds, such as support and monitoring. Is it possible that isn’t working and they are seeking other alternatives? If so, that’s worrisome. I trust that MySQL AB is watching the responses on this closely and really think in the end they’ll do the right thing, but I have to admit this is a little troubling. It’s a trend I’ve seen at a broader scale bubbling beneath the scenes and some interesting times could be ahead for “Enterprise Open Source”.

–jeremy

OSCON Executive Briefing II

(live blogging, so forgive the grammar and lack of proof reading)

Always Better

Matt Asay (Alfresco) and Mike Olson (Oracle via SleepyCat) discuss the value of source code. Mike argues that zero cost frictionless distribution is more disruptive than source access. A response from the crowd asked why he doesn’t close BerkleyDB. He didn’t get a chance to answer the question, but did give Matt a book.

The Path to IPO

Marten Mickos discusses how he hopes to grow MySQL AB to a billion in revenues. He covered how much the company has matured in the last few years (including items like: “we now invoice customers and have prices”). MySQL really aligns with PHP, but is “promiscuous when it comes to programming languages”. “Moore’s law will continues, but doesn’t apply to people” – MM. “The company you keep matters in Open Source” – TO. MySQL data seems to once again confirm that many people test OSS on Windows and deploy on Linux. Open Source will accelerate what is already happening to a product – bad ones will die quicker and good ones will get better faster.

Managing Linus Torvalds and other small challenges

Jim is covering the reasons that FSG and OSDL merged. He is also reflecting on what he sees as the future responsibility of the Linux Foundation, including what directions they should take and what pitfalls they should avoid.

Why Free Software values work for business

Mark discusses the relationship between the commercial Canonical and the non-commercial Ubuntu community. Mark sees collaboration as one of the key Open Source strengths. Launchpad is meant to take advantage of this and leverage collaboration as much as possible. Freedom of data is becoming increasingly important and Ubuntu/Canonical is committed to free data not only in launchpad (which will be Open Sourced soon), but throughout the project/company. “Driver support in Linux is probably one of the biggest reservations in Linux adoption” – MS. The following question was asked: “Can Ubuntu become bigger than Mark”. In essence, if Mark went away for whatever reason, would Ubuntu survive? This is clearly a question Mark has really thought about, up to and including Will provisions meant to ensure financial viability for the project.

–jeremy

MySQL AB and IBM Announce Open Source Database Support for the IBM System i Platform

Some pretty big news from IBM and MySQL AB at the recent MySQL Conference & Expo 2007 (which I unfortunately had to miss this year, but do plan on attending next year). From the press release:

MySQL AB and IBM (NYSE: IBM) today announced a joint technology and reseller agreement to bring support for the MySQL open source database to the IBM System i business computing platform.

The two companies will work together to offer the MySQL Server for i5/OS, the flagship operating system for System i, and plan to deliver DB2 for i5/OS as a certified MySQL storage engine on the System i platform. This will allow System i customers to implement online and transactional MySQL applications while storing all data in a single, easy-to-manage DB2 database.

In addition, MySQL Enterprise subscriptions — a comprehensive offering of MySQL database software, services and support — will be made available to IBM clients worldwide through IBM’s reseller network and System i sales team. Financial terms of the agreement were not disclosed.

For such a large company, IBM has been able to leverage Open Source extremely well. This release is great news for MySQL AB and their upcoming IPO. The reach of the IBM reseller network is absolutely massive and will surely get MySQL into places it’s not currently. The fact that is being implemented as a MySQL storage engine is a testament to how powerful that modular paradigm is. Congrats to both IBM and MySQL AB.

–jeremy

Linux and Open Source Conference Discount Codes

I’m just booking some upcoming conference travel (in this case OSBC). As you may know, LQ is a sponsor of quite a few fantastic Linux and Open Source conferences. As a result of that, we’re able to offer you some discounts. Here’s a partial list – as I get more I’ll bump this post. If you run a conference that LQ doesn’t sponsor, but you think should, drop me a line. Without further ado and in no particular order:

The 2007 MySQL Conference & Expo: 10% off using mys07lqt
Ubuntu Live: 10% + $150 off using ubu07lqt
OSCON: 10% off using os07lqt
LinuxWorld Canada: 25% off if you register before April 11th

If you’ll be attending any of this conferences and would like to meet up (I’m attending most, but not all), let me know.

–jeremy

MySQL AB – a new product and an IPO

Speaking of Open Source companies that understand their market and core strengths, MySQL AB has also been on a tear. Earlier this week, the company announced its MySQL Enterprise Unlimited program. From the press release:
MySQL AB, developer of the world's most popular open source database, today unveiled a simpler way for large and growing organizations to acquire and adopt enterprise software. Designed with a customer’s perspective in mind, a one-year MySQL Enterprise Unlimited subscription offers a company-wide enterprise site agreement at the unprecedented low price of $40,000 (EUR 32,000, GBP 24,000).
“MySQL Enterprise has made it significantly easier to purchase database software and technical support for our entire organization,” said Glenn Bergeron, systems manager for Instaclick Inc., one of the first companies to take advantage of MySQL Enterprise Unlimited. “This new offering is ideal for corporate IT organizations with a growing number of projects but a tightly-fixed budget.”
MySQL Enterprise Unlimited is designed for companies with existing site licenses for Oracle, Microsoft SQL Server, Sybase and IBM DB2. Last year, a survey of the Independent Oracle User Group showed that a full third of its membership also used MySQL1. With a MySQL Enterprise Unlimited subscription, an organization can develop, manage and fully support any number of MySQL database applications — significantly reducing IT time, cost and risk.
“Due in large part to advantages in distribution and volume, open source has the ability to disrupt traditional enterprise software pricing,” said Stephen O'Grady, principal analyst for RedMonk. “MySQL is attempting to prove as much with its latest site wide agreements, which offer customers the ability to support every database across their enterprise at a fraction of the traditional cost.”

Make no mistake about it, MySQL AB could have actually raised the price of their main product and still sold more. Instead they have chosen a plan which I think has a higher upside potential long term. Matt covers some of the reason the company is able to do this:
Zack told me over email (in response to my question, “How can you possibly make money at that price?):
The reason we can make money is because:
-The software really works
-And we don't have expensive Armani-wearing Ferrari-driving sales reps closing 40K deals.

Expanding on that is a post on Zack's blog. This isn't just about Oracle, it's about disrupting the industry. That's why this is a long term play. It's game changing. A lot of proprietary companies may have raised their rates as mentioned earlier, to boost the bottom line in the short term. It all looks very nice on the balance sheet. MySQL represents what I consider the future. Vibrant sustainable companies that treat their customers like partners and not like prey.
I see that the company is now looking at an IPO. As you may have guessed by my previous comments, I'll certainly try to get in on that. As you may have also guessed, I also regularly recommend and implement MySQL and run it on a site that gets a considerable amount of traffic.
–jeremy

MySQL Stats

I just logged into the LQ MySQL server to get some statistics. I have a couple ideas for some optimizations and wanted to get a baseline on things. I fired up mytop and got the following:
Queries Total: 1,033,746,636 Avg/Sec: 112.80 Now/Sec: 119.93 Slow: 667
Cache Hits : 478,453,845 Avg/Sec: 52.21 Now/Sec: 56.15 Ratio: 46.28%

Not too shabby – one billion queries since the last MySQL restart. Almost all of the “Slow” queries are either me doing maintenance (some of which just simply use long queries) or queries going on during our snapshots (which I plan to move to the slave soon). I think we have a good handle on the current LQ growth, which continues to be fantastic. Performance is important, but we're also adding some interesting features in the near future. Stay tuned.
–jeremy

Where does open source code come from?

From this article:
The European Commission has published its final report on the Economic Impact of FLOSS (Free/Libre Open Source Software) on innovation and competitiveness of the EU ICT sector.
Weighing in at 287 pages it will take some time to digest, and contains enough data and statistics to fill a blog for a whole year.

One interesting nugget in the report (which I've not had a chance to fully read yet) was a “top ten business contributors” list, based on number of Person-months. To be honest, I was a bit surprised by the list. Sun was number one, which was no surprise. Rounding out the top three were IBM and Red Hat, also very much expected. The rest of the list:
4 Silicon Graphics
5 SAP
6 MySQL
7 Netscape
8 Ximian
9 Realnetworks
10 AT&T

That's where the surprises came in. Many companies I'd have expected to be there are suspiciously absent. SAP was also a surprise up that high. I'll have to look into what else aside from MaxDB they've donated. Just goes to show that code isn't always coming from the places you think it is. I'd guess I'll be posting more about the report as I get a chance to read it.
(originally from Matt Asay)
–jeremy
,

MySQL refines its GPL licensing scheme under MySQL 5.0 and MySQL 5.1

According to this blog post from Kaj, MySQL VP of community relations, the company is changing the wording of the GPL license for both 5.0 and 5.1. From the post:
MySQL has today refined its licensing scheme from “GPLv2 or later” to “GPLv2 only“, in order to make it an option, not an obligation for the company to move to GPLv3.
Specifically, this means that copyright notice in the MySQL source code files will change from referring to “either version 2 of the License, or (at your option) any later version” to “version 2” only, in the MySQL 5.0 and MySQL 5.1 code bases.
Six years ago in the summer of 2000, when MySQL AB licensed its software under the GPL, our founders David Axmark and Michael Widenius made this choice because the GPL was a license followed and respected by everyone. We have kept to it, because the GPL is the most palatable license, and poses the least friction for our user base.

It should be noted that MySQL AB is on GPLv3 Committee B, which advises the FSF. Basically what this move means, is that any GPLv3 fork of the MySQL code would need to happen at the last version of the MySQL code released under the old wording. It would need to be a clean break and no sharing of code would be allowed. The move seems to be a continuation of the sentiment some businesses are having with the GPLv3. To be completely honest, I've never liked (or even understood) the “or later” clause. Why would you agree to release your code under a license that hasn't been written yet. Right now, and for their entire history, the FSF has rocked. Even so, what if something crazy happens and the GPLv10 includes wording you are vehemently against? If your code has the “or later” clause the GPLv10 will apply. It's a blank check or sorts, which just seems like a bad idea. Maybe I'm missing something.
–jeremy