August 27, 2007 by jimstogdill
Another Business Model for Software Companies?
I attended a meeting last week with Peter Bostrom, BEA’s Federal CTO. During a discussion of open source in the DoD, he made the valid point that integrators aren’t the best suited for developing large scale software products. They don’t have the product management capability, standards body interaction, versioning expertise and all of the other product-oriented DNA that is necessary to effectively develop software products.
I’ve posted before that I think widely used infrastructure projects like the Army’s SOSCOE (the software underpinnings of Future Combat System) should be developed under a “funded open source model.” In the future I would like to see contracts written that still expect delivery of functionality within a particular time frame; however, with additional deliverables that require the contractor develop and host an open source community around the product.
Today traditional software product companies like BEA participate in DoD software projects rather passively. As subcontractors they do little more than provide software licenses (and perhaps some focused integration expertise) to the integrators. Would it be reasonable to believe that they could alter their business model to un-bundle their software development expertise from their products and in the future sub to the integrators not as a mere license provider, but as the funded open source developer? In other words, could a company like BEA be hired to be the JBOSS for SOSCOE or other infrastructural products?
I really can’t say whether this model is workable (especially for firms like BEA who would have to change culturally to be successful in open source development). But I think the continued erosion of sales of proprietary middleware is inevitable and a defensive posture just isn’t going to work in the long run. Better to go on the offensive and try things that leverage the core strengths of the firm than sit back building a Maginot Line (unless the prospect of Vichy politics suit you).