Open Source and Capitalism with Ashley Williams and Adam Jacob
So so, Brian, loved your talk the other day. Really enjoyed the panel, Ashley and Adam. But, Ashley and Adam, you know, Brian is a bit of a shrinking violet, and you really didn't get let him get a word in edgewise on the panel discussion. And I saw him desperately trying to get a word. So
Speaker 2:She promised us that he was the moderator. Right.
Speaker 3:I think I it was great. No. It was It was great. Terrific. I mean, obviously, the 3 of us, there is no moderator.
Speaker 3:That's the reality. The the 3 of us.
Speaker 1:There's no moderation that could happen.
Speaker 4:You can't hold us down.
Speaker 3:Exactly. No. It was, it was great. Thank you very much for that that was that was a lot of fun. And I do feel, though, it was short in that, like, just as it was getting, like, super spicy or, like, and we're out of time.
Speaker 3:Oh, come on. Now we're getting interested. But that was that was a lot of fun. So, thank you both for yeah. Where do we wanna pick it up, Adam?
Speaker 3:Do you wanna, do you wanna give me give a little bit of context here? Or
Speaker 1:Yeah. Do you wanna give a little synopsis of of your talk perhaps? And then there were actually a couple of topics that kinda tailed off towards the end that I was hoping that we could pick
Speaker 3:up. Sure. So, the so my talk was a I I revisited a talk that I gave in 2012, on corporate open source anti patterns, when when we learned that Ashley was had baby Ashley dreams about what open source was so long ago. Ashley, I love that. I I love their, the the way you phrased your your younger more optimistic self before we were all jaded.
Speaker 3:And, but so in that talk, I was really focusing on I mean, Oracle was the villain of that talk. That's like let let me just, like, distill it down for you. It was Oracle based villainy, and more like not actually Oracle has so much villainy, but you actually gotta be more specific than that. This is more like the companies that large companies that were participating in open source poorly. In the kind of the Oracle's extreme, they were making things re proprietary, but a lot of other companies just weren't really, abiding by the social contract or open source.
Speaker 3:They weren't really giving it back. And that's kinda what I was that's what the that was the theme in 2012. In 2023, that is not the theme. My if Oracle was the villain in 2012, then, just bluntly, HashiCorp was the villain in 2023, in part because they just embody so many anti patterns.
Speaker 4:Who saw that one coming, though?
Speaker 1:I seriously
Speaker 3:Did not. Did you see that one coming? I did not see that one coming.
Speaker 4:I didn't I didn't see it coming at all. Heroku.
Speaker 2:The Yeah. The fate of Heroku, I feel like, was when the direction started going up
Speaker 4:sideways. It had to add when you say,
Speaker 3:like, you do it Hashi in in itself, like, in particular, if we were good to go back into a time machine even a year ago and tell ourselves that, like, Hashi's the villain, you'd be, like, what? What happened? Don't is that what you meant?
Speaker 4:Yeah. Yeah. I just I wouldn't have predicted it. And there were a few people in my life who are like who are like smart in the know folks in the open source conversation who dropped like who dropped hints that they were, like, just wait till the big bomb drops, you know. Oh, really?
Speaker 4:And I'd be, like, you can't just say that shit to me.
Speaker 3:Like, give me the fucking
Speaker 4:gossip, You know? Like, I'm over here being a friend. You can tell me to keep it a secret. They kept that shit locked down tight. But, yeah, I there were definitely rumors that I was not privy to, or they were briefings, could be briefings.
Speaker 4:But yeah, I did not I would not have predicted it.
Speaker 1:In fact, like 2 months ago, 3 months ago, Adam, I would have put them at, like, last on list there. I I thought they were, like, I kinda loved them. And I think that's that's what made this change all the more galling for me.
Speaker 3:Yeah. I think you're right, Adam. That's a really good point that because I mean, god. It was when we had Kelsey on talking about it, it was so I mean, and it it just you know, Kelsey talking about, like, hey. All the work I did for you back in the day, you know, I didn't have to do any of that.
Speaker 3:And now, like, I'm a chump for doing that work. I mean, I was just very, very evocative. And, yeah, it was totally surprising. And and I hope you'll address the yeah.
Speaker 2:I just said, who do you think is next? Because certainly, AG Corp won't be the last.
Speaker 3:Adam is now when we announce a I shouldn't even joke.
Speaker 4:So my product hasn't even made it into the market really yet. I'm gonna go business open source license. Smart.
Speaker 3:Okay. So okay. I'm gonna be optimistic. I'm gonna be optimistic. I am gonna say that this is a turning point.
Speaker 3:This is just so I know this may be ridiculous. I think that that prior to Hashi, there it felt like there were no consequences. And in part, there were no consequences because the the busilyng that was happening was actually, lower key. It was kind of it was tighter. I mean, you look at, like, what you know, Adam, when you and I were, blogging about what was happening in 2018 in confluent and cockroach, they look I mean, we have so moved the Overton window that they seem, like, completely reasonable by comparison.
Speaker 1:Totally.
Speaker 3:And and I so I think that, like, so kind of with every act, there was this kind of, like, implicit escalation. Everyone using these other companies as the justification. Everybody's doing it. I'm just doing it a little bit more. Everyone's doing it.
Speaker 3:I'm doing a little bit more. And now I actually really wonder if we haven't hit the, like, actually, this is too far, and you're gonna lose the whole kit and caboodle and serve as a a warning to other other I know this is too optimistic, isn't it?
Speaker 1:I know. It's like yeah. I'm so glad this is recorded so that, you know, 20 minutes from now, when someone switches their license, we can play it back.
Speaker 4:I've had I've had more than a few, like, let's call it a handful of conversations with people post HashiCorp's news being, like, our board is asking us this question. Is this what we this is, like, what we should do? And not being demanded to switch by their board.
Speaker 2:Do you
Speaker 3:know what
Speaker 4:I mean? Their board's not showing up with a with a fiat, you know, saying, like, do this or you're in trouble or whatever. But just people asking the question, hey, like, this is a clear trend. All the, like, big versions of what you hope to be someday are doing it. Like, should you be doing it too, or are you, like, missing a trick?
Speaker 4:And, like, I don't for, you know, for every handful that talks to me, there's, like, many handfuls that aren't, you know. And and even the ones who did talk to me, like, who knows what they'll do in the end. Right? Like, it's not like everybody listens to my advice and is like, oh my god, Adam Jacob, you know? Like, gotta do that.
Speaker 4:So I don't know. I I I think it's You're very I think it's good to work before
Speaker 3:it gets better.
Speaker 2:I don't know. Your advice is usually very positive, I think, Adam. So I wouldn't say
Speaker 4:it's Especially. Think I give good advice. I'm not saying it's bad advice. I think it's the right advice. I just but I don't know.
Speaker 1:Not everyone's smart and not everyone follows it.
Speaker 4:That's fair. They may not follow it. Yeah. Yeah.
Speaker 3:So, Brian, terrific talk. Really enjoyed it. And then, great panel that broke out. And I think the organizer was, like, trying to give everyone the hook and and, everyone in the audience was asking them not to. This was great.
Speaker 3:I didn't realize that after the fact. I don't know what you guys Adam and Ashley realized that. I did not realize that after that. Do you realize that they gave us, like, that that they were trying to give us the hook earlier? And the p 99 crowd demanded that they let us run longer.
Speaker 3:No. Yeah. It was crazy. That was my one
Speaker 1:That's also why the end was so sudden. Because they were like, no.
Speaker 3:No. No. I'm now I'm cutting to a commercial, like, right now.
Speaker 2:Right. I think the end is always going to be sudden because we, we all knew that 20 minutes was just like not enough.
Speaker 4:Yeah. We weren't gonna be done
Speaker 1:talking. Well, it was Now I'll just really stretch out. One of the topics that we ended on that I really wanna pick back up is that, someone in I really can't remember who it was, sort of pointed to the BigCos from from 10 years ago and BigCos now and saying that their behavior was materially different and better and improved, and I think someone else taking the other side of that. So I don't know if that resonates or sounds familiar, but I'd love to hear, like, what do people think of Microsoft, Meta, Amazon in terms of their participation in open source? Now that's changed.
Speaker 4:I mean, I think Brian was making the point. Go ahead, Ashley.
Speaker 2:Oh. Oh, I think the thing I was gonna say was this word rapaciousness that got repeated way too many times. But I think the thing that's really interesting that I think forks with that, that question that you were just saying is, like, there was an element, I feel like Brian was saying, of, like, the that open source, like, can be a guard on, like, the greediness of Corpse.
Speaker 3:Right. Yep.
Speaker 2:And I feel like Adam said, like, the greediness came from the entrepreneurs and open source. And then I kind of was like, I think everyone who participates in open source has some level of greediness.
Speaker 4:Yeah. I'm a 100%
Speaker 2:actually aware
Speaker 3:that everyone yeah.
Speaker 4:I'm I'm with you on the greedy side, actually. I think I I don't I don't think that I think there's very little only, like, there are individuals, who hold, I think, really deep open source ethics and really, like, believe in the movement and, like, what it can do for humanity. I'd like to believe I'm one of those people. And then there's the, like, reason to participate on an individual level, which tends in in some larger way, which I think tends toward greed. And definitely, if you look at, like, Microsoft, like, Microsoft didn't have a conversion because of they suddenly caught a case of, like, morality.
Speaker 4:Like,
Speaker 3:you
Speaker 4:know what I mean? Like, they
Speaker 3:just Yeah.
Speaker 4:Like, what they saw was this potent weapon they could use to make a bunch of money and hurt their competitors, and they took it, and then it worked, and now they're like, oh, we should do that more, you know?
Speaker 3:Yeah. And I think that my argument would be that and let's call it for the moment self interest, even though we can acknowledge that it might be avarice. But that that self interest that in you you have entities like Microsoft that, yes, our Microsoft is not engaged in open source because it thinks it's good for humanity. It's because it realizes that it needs to do this for its own self interest. And I think my argument would be that that that that presence is very important because if you the open source acts as a check on these companies, and that they they behave even worse when they are strictly proprietary because they have not just unlimited pricing power, but they effectively have a natural monopoly under their over their own customers.
Speaker 3:And they end up in this just this obscene relationship that even and so this is my this was, I think, I out of you and
Speaker 2:I Let me add them.
Speaker 3:Well, no. Because I I think people don't understand how ugly these I mean, and, actually, I guess we're not allowed to use the word rapacious. Do I have to have a synonym for rapacious? Because Okay.
Speaker 2:And I just thought it was very funny that we, like, got stuck on such a illustrious word. Like, I don't it was just funny to me. Me.
Speaker 3:But the the way in which these these strictly proprietary companies handle themselves are it is so unspeakably gross, especially now. So it's like the in in particular, so I actually, Adam, as I was reflecting on what you were saying and kind of as we were talking about that in that panel, I've got a metric for you. And that is, how often do you litigate against your own customers? And I think that this should be like a this should be featured at, like, a public company should have to say how frequently they litigate against their own customers. And this is something that Oracle does all the time.
Speaker 3:This is something that Cadence does all the time. This is something that actually and then maybe maybe Red Hat does it all the time. I'm actually They do. They do.
Speaker 4:And I did too. Jeff did. Like, I had totally had to. If I didn't go to customers and be like, hey, you owe me more money. They would it's not like they were volunteering.
Speaker 4:You know what I mean? And like yeah. I think I I'm not sure that the level of litigation against their customers goes down. I think I think it's it's tenor changes because you're the the customer has a has an option that they maybe doesn't otherwise have. Yeah.
Speaker 4:But the but the the pursuit of the dollar, I think, is probably roughly the same, you know?
Speaker 3:Yeah. But the But this this is something I thought
Speaker 2:that, like, from the open source perspective, it it hasn't changed it. It's just sublimated it. And I I won't do any more psychoanalysis babble or anything. But the idea is that, like, it's taken the same, like, behavior pattern, but it's, like, thrown a layer of abstraction on it. So it's slightly harder to point at, which actually kind of makes it more insidious.
Speaker 2:Like, one of the words that you mentioned that really struck with me, and I was thinking about, like, what I was gonna talk on this panel today. And, like, the thing that's, like, stuck with me was that, like and and maybe this is also my Roman Catholic upbringing, but, like, open source, like, re is really what taught me that ambition is a sin, which is that, like, the the only way to, like, get a monopoly now, I think, in tech in many ways, is to do open source and do what is functionally the standards grab. And so I think in many ways, like, I think that's what the CNCF does in many ways. But, like, that that's what I think it is. And I think it's just that it's become slightly more socially acceptable to take that path for now.
Speaker 2:And then once it isn't, there'll be, like, a new layer of abstraction that we throw on top of it. But the same underlying motivations will remain. So Which is kind of not the baby Ashley optimist.
Speaker 3:So open source is kind of a way it's a it's a palate cleanser for world domination that you are the world domination is actually acceptable in an open source vehicle. Is that a is that a fair way?
Speaker 4:It's like world domination with, like, extra carriers.
Speaker 3:Who Yeah. Well, the the
Speaker 1:big coast have harnessed this, to wrap their otherwise, a lot of the same things that they were doing with this morality. Oh, a 100%. A competitor comes in, I drop my price to 0, The SCC is very interested in that. If instead I have this open source product that I'm giving away, it changes the tenor of that completely. Totally.
Speaker 3:And if
Speaker 2:you look at, like That was the other thing. Monopolies, but also the price fixing. Like, open source is price fix against 0.
Speaker 4:Yeah. Totally. There's like a the Microsoft does this now. They launched a, they launched a thing called Radius, which is like a DevOps infrastructure as code y platform y tool. It's I don't think it's particularly interesting as technology.
Speaker 4:But that they did it like, they launched it as an open source project. Right? It clearly competes with a bunch of existing both open source and proprietary things, including things inside Microsoft's own house. Right? And, like and it has, like, clear and obvious monetization hooks that lead you into Azure or or other places.
Speaker 4:And, like, you know, they've figured out that, you know, if that was a proprietary thing that they had launched, they would have looked like they were bullying people around in their own ecosystem. But, you know, slap an open source license on it, say they're gonna give it to the CNCF. Next thing you know, like, we're all it's all it's all good in the hood. Right? Like, we're all friends here.
Speaker 4:Right? And, like, you know, mhmm. Sure. Friendly.
Speaker 3:That's right. And they're pulling up the ladder,
Speaker 1:you know, from other startups that might wanna enter that space. Oh, for sure. All of a sudden, I can throw a 1,000 engineers working for 0 revenue and just monetize it in these these other products.
Speaker 3:So is this Adam, is this the 2023 equivalent of the vaporware announcements from the nineties? I mean, is that because the Microsoft famously would do this. They would announce things that they didn't have to kill startups.
Speaker 4:I think it's I I don't think it's that bad. I think it's actually I think it's actually more innocent than that. I think it's literally Google does this all the time too. Like, you know, there's a good idea, and then, like, there's a googley take on that idea. And then they're like, obviously, the googly take is a better one because it's Google.
Speaker 4:You know? And I think Microsoft's the same. And then now there's a vehicle for getting those ideas to sort of to to feel like they're wrapped in a giant Careberry hug, you know, which is we open sourced them and we gave them to a foundation. You know? And, like, it's the motivations for doing it are I'd I'm not sure how much they've changed, but they're wrapped in a layer of of principle that makes them more palatable to everyone.
Speaker 4:Right? And and I'm not sure how principled they actually are most of the time.
Speaker 3:I didn't know about
Speaker 4:I didn't
Speaker 2:know about this vaporware pattern, but I will certainly say that while I haven't seen companies necessarily do this, I have seen open source foundations release functionally nothing under the name of land grabbing it for collaboration so that it doesn't result in competition in the ecosystem. So I've seen that a lot, and that is definitely a way that they try to crush competition. That that has definitely happened. I'm sure people Okay.
Speaker 3:So let me ask you this, actually, Because the the that's really interesting. I would love to get the details. I would be very curious to know, what fraction of them were the LF.
Speaker 2:I mean, I can sort of gesture at Rust async.
Speaker 3:Yeah. Interesting. Okay. I want well, let's
Speaker 2:I'm really in huge trouble for saying that now, but, I mean, that's there's definitely a big, like,
Speaker 3:this is a better than
Speaker 2:us in total. Like, Russ kind of went I mean, in many ways, I think, you know, everything is, like, ebb and flow, and so they went they reacted really hard one way. And the idea of, like, building something out in the ecosystem and not, like, fully collaborating all on one thing that's the official thing is kind of seen as bad. And so, like, early on, Rust, like, kind of even though it's not in the standard library, the standard library is small or whatever, it did stake out a bunch of things and, like, sit people as, like, leads, in those places to try and like keep them from being ecosystem driven parts of the project.
Speaker 3:And do you see foundations doing this with other kind of broader technologies? I mean, is this part of a broader pattern, do you think? Because and let me so let me ask this. Because the the thing that that
Speaker 2:programs and foundations, I sometimes the foundations are not operationally efficient enough for me to assume that they're doing it in a strategic way, but sometimes it ends up having that impact anyways.
Speaker 3:Right. Okay. Fair. The the and this is I I think I mean, it's always a good idea to ascribe things to incompetence that you're tempted to ascribe to malice. So, I mean, it's like, whoops.
Speaker 3:Sorry. We accidentally like, did I did I kill this other community over here? Sorry about that. The so one thing that is interesting about this kind of Hashi thing is that it is increasingly clear that they are drawing a battle line against the LF. And the and that is gonna be a weird narrative to unfold, because that's something we have not seen happen.
Speaker 3:We have not seen a company go to war with a foundation. And, first of all, do you see the same thing? And, like, is that one question I definitely have for for you both is, like, what the anti patterns are gonna be What are they? Like, what are we gonna come back a decade from now and talk about with respect to the new anti patterns? I should mostly say that at the end.
Speaker 3:I should not I don't wanna get too far.
Speaker 4:It's a pretty good question. I look, the I'm I'm totally here for I don't I don't this is my personal opinion, which I'm sure is going to get me in trouble in some future point in my life. But I think, in general, the Linux Foundation and the CNCF more specifically, I don't think that they've always been great actors for the entirety of their ecosystem. I think that they are great actors for the people who pay them the most, and they're incredible vehicles for funneling the the hopes and dreams of those of those large organizations into collaboration and software, which is great or whatever. That, like, in many ways, it's great.
Speaker 4:But, like, I wouldn't say that they're, like, necessarily positive actors in a lot of cases. And I think, you know, if you're HashiCorp, I think the I think I think the problem with HashiCorp was deeper than than HashiCorp talks about. I think the shape of their business and its inefficiency is is for real. And I have an anti pattern that I will declare there that I think that whole model of building open core companies is is, like, broken and sort of irretrievably so perhaps.
Speaker 3:Can we talk about that? Is Is now the time to talk about that? Because that is something you mentioned in the panel. I think that is a really important point, and it kinda gets to this advice. Because, Adam, you're talking about people reach out to me for advice and they kind of ignore it.
Speaker 3:What kind of questions are they asking you? Because I imagine people are asking you, hey. I've got this open source project. It's pretty popular. I'm thinking about this open core model.
Speaker 3:What do you, Adam, Jacob, think about that?
Speaker 4:Yeah. Sure. Yeah. What I get a lot of is just we have this thing. How do we how do we think about open source with in relationship to our business?
Speaker 4:How do we what's the right model to think about it? I try not to, like, be appendant about the fact
Speaker 3:that open source is in
Speaker 4:a business model, yada yada yada. So with that out of the way, we'll just call them business models because it's easier. I think the what I see and have seen more and more of and becoming more and more convinced of is that we essentially think about open source as a vehicle for setting the product price the acquisition cost of the product to 0, which is basically what OpenCore does. So you give away a ton of value for nothing. And then you create some barrier artificially somewhere else upon which some segment of the market will want that value plus some other kind of value you can add into it.
Speaker 4:That's where you sort of draw the line for the for OpenCore. There's other definitions of OpenCore that are, I think, functionally useless. So just go with mine. But, like I
Speaker 3:like yours. Yours is good.
Speaker 4:But but that does that model of, like, how do we do it? That's that was HashiCorp's model. It was MongoDB. It was Confluence. It was it on and on and on.
Speaker 4:Right? Chef. Like, and what's wrong with that model is the part from a business point of view, forget about the open source part of you for a second, is that the most valuable thing you do, you set the price at 0. So there's something that the product does that's amazing. Terraform.
Speaker 4:So cool. Does something awesome. And you've said it's worth nothing. Right? And then not only is it worth nothing, you gave it you gave away the source code to it too.
Speaker 4:And the entire product process, the entire pipeline that brings that product into the world, you gave that away for free too. And it's the exact same thing that you will receive, if you just hang out in open source land. Ubuntu is the perfect example of this. Ubuntu had a strategy. Simon Wardley very famously talks about how he guided this strategy for Ubuntu to take over adoption in the cloud.
Speaker 4:Ubuntu, far and away the most used operating system in cloud providers by a huge margin. Ubuntu struggling very hard to come anywhere close to the level of monetization that SUSE has in operating systems. Right? So number 1 with a bullet, total utilization. Number 4, probably in monetization with a bullet, right, and struggling.
Speaker 4:And that's because Ubuntu took the core of their product and they gave it away for free. And over the years, they've been tinking around the edges trying to figure out what else they can convince you to pay for, and the answer is nothing. You want nothing from them. Right? There's nothing of value really that you want from them.
Speaker 3:Oh, clench my friend. I would like juju.
Speaker 4:You do not want juju. No one wants juju. Right? And What is I do.
Speaker 3:I'm sorry.
Speaker 4:I'm sorry. Configuration management thing. It was the first time I went to Barcelona, actually, it was to try to convince them
Speaker 3:to use chef and not
Speaker 4:build juju. And it did not work. Anyway.
Speaker 3:You want to build, you don't want to rephrase chef in terms of juju charms?
Speaker 4:I did. I didn't. I didn't. I tried. It didn't work.
Speaker 4:Anyway, so when I say that model is broken, what I mean is that from a business point of view, you create this incredibly difficult problem, which is you're hanging all of your monetization on this very inefficient, this very inefficient monetization vector. What it's good for is that you open sourced it, and it causes this humongous lift. So when you open source it, and you get other people to use it, and they go create value, so they do use Ubuntu, and it, like, gets into their whole environment, and Ubuntu is great. People talk about it, and they share it with each other. And all of a sudden, there's way more people using Ubuntu than you ever could have convinced to use Ubuntu if it wasn't available to them for free.
Speaker 4:But then you have to convince those people to pay you, and you can't. And Right. If you become a public company like HashiCorp, or like MongoDB, then you inevitably look at that sales pipeline and you look at the number of people who are using your software to get benefit. You look at what you receive from people who contribute back, which is almost nothing and, and you go, wait a second. If we could convert, let's say we lost, 80% of the Terraform market.
Speaker 4:It just evaporated. If that 80% was the open source part, the part where people used it for $0, but they got 20% of that large market to start paying them for Terraform enterprise or Terraform cloud. That is a fucking good quarter. Yeah?
Speaker 3:Right. And that might even be the calculus. As much as there is a calculus inside of Hashicorp, that might even be the calculus.
Speaker 4:Oh, not my it is the calculus.
Speaker 1:Absolutely, Adam. To pick at this example, do you think, I mean, let let's say, do you think Terraform is successful as a non open source product? Like, do you think that they if if they can take that route without being open source from the jump?
Speaker 4:At the size that they are now, I believe that they can be successful at doing that because people already recognize what Terraform is. HashiCorp can set the price at whatever they want to, and some large number of it'll be 0. Right? They'll have slower growth perhaps than they had before. It opens the door for more Pulumi growth or whatever.
Speaker 4:But, but, but it'll work. I from the jump though, I'm not sure they could have. Right? I think, I think the size of that open source community, the work that like Kelsey Hightower did, that lift that happens from being open source is so powerful, and I don't know how to replicate it in a way that is proprietary. I know how to replicate the business model of selling enterprise software.
Speaker 4:That's what Red Hat does. So what Red Hat does is they open source all the software, but under no circumstances can you get their product for free. Yeah? So you can take the software and do what you want with it, but you can't get
Speaker 3:it from Red Hat. If you
Speaker 4:want it from them, you must pay them something. Even if they set that number at low, Ansible $0 for example, but it's like only Red Hat gets to make Ansible. Right? And I think the
Speaker 3:And so, Adam, is that your answer for, like, okay, like, open core is a disaster. So what do I do instead? What I do instead is if I'm if I'm pure if software is the vector, I am charging for the product. The product is open source, but it's the rather
Speaker 4:It's not more as open source. The product is absolutely proprietary. Yeah.
Speaker 1:Yeah.
Speaker 3:Interesting.
Speaker 4:And, yeah, that's that's what I think we should start shifting people to. And I think the evidence that tells you that that's a more efficient monetization vector is pretty clear, in a bunch of different scenarios. You look at, like, Kubernetes monetization. Red Hat's got a $1,000,000,000 in ARR. If if in case you don't know, it's really hard to get a $1,000,000,000 in recurring revenue.
Speaker 4:Like
Speaker 3:it is
Speaker 4:really rare. HashiCorp public company, nowhere close. Right? Somewhere what? They're hovering in the 4 twenties, I think, and they are.
Speaker 3:Something like that. Yeah. And and then a lot and a lot of added services and support.
Speaker 4:Across a bunch of different product lines. Yeah. Right? Meanwhile, Red Hat, OpenShift, $1,000,000,000 in ARR and growing rapidly. Right?
Speaker 4:On software they didn't create, that a foundation runs. Right? That what they do is curate an enterprise product that they can, you know, produce and support and test and integrate and, like, do all of the Red Hatty things. You can go get that exact product for free from somebody who's not Red Hat, but you won't because you can't run that product in Morgan Stanley. Right?
Speaker 4:Morgan Stanley doesn't want a product that comes from, like, Bob in France. Right?
Speaker 3:But is that another way of what you're paying so what you're paying for is brand, but you're also paying for services. You're paying for support. You're paying for the that that someone's gonna stand by this thing. Is that what you're ultimately because I I feel like
Speaker 4:Supply chain security. You're paying for development time, engineers, expertise. You're paying for the product to be vended to you in the same way that, like, you know, you're the iPhone. I, like, I don't just get the software. Right?
Speaker 4:If you just gave me all the software that runs the iPhone, it doesn't mean shit to me. Right? What I wanna do is go to a store, buy an iPhone, make a phone call. Right?
Speaker 1:That's not a really fair analogy, is it, Adam?
Speaker 3:Because, like, there you're talking about something physical that
Speaker 1:I couldn't replicate at home. I mean,
Speaker 4:this is the argument of every software engineer that I've ever had to explain this to instantaneously. They're like, well, but Adam, if I don't have
Speaker 3:your software,
Speaker 4:I can do whatever I can do it. And the answer is, sure, you can, kind of. Except you also do actually want to know, like, who produced that software you're running? Where did it come from? How did how are they gonna patch it?
Speaker 4:Do you know that they're going to do that? What's the what's the agreement you have with them if there's a problem and you need to repair it and there's a priority one issue? Is it just like and, like, on and on and on. So, like, software engineers tend to overvalue the shape of the software and the total arc of the product. But there's a ton of evidence that tells you that actual consumers, people who buy software even in the large enterprise, don't particularly care for the software.
Speaker 4:They don't want the software. They want a product they can run. They want a problem they can solve. And if you charge them money for that problem, they will buy it. And if you yeah.
Speaker 1:So on the Terraform example, so, you know, we roll back the clock.
Speaker 3:Yeah. You know, Mitchell, you know, doesn't put it
Speaker 1:up on GitHub, does put it on on GitHub, but regardless, the way it's brought to market is not with us freeloaders, but rather as a packaged product that, oh, by
Speaker 4:the way, it happens to
Speaker 1:be open source. But you, Morgan Stanley, of course, like, you wanna buy the product.
Speaker 4:Yeah. I if if if it was me, what I would have done, what, or now what I know to have done, I wouldn't have done it then because I didn't know this then. But like, I think the the answer there is HashiCorp builds Terraform. Terraform's a product that they use their trademark and their distribution terms to set up a proprietary distribution of much in the way that, like, Versus Code is a proprietary distribution. The software itself is open source, but if you wanted to take tariff take that source code, Terraform, and not pay for the privilege of using the Terraform product that's that's built by HashiCorp.
Speaker 4:What you have to do is take that thing and fork it. You got to call it, you know, AHL and you got to like have AHL become your propriety your version of Terraform. And you could decide that that's a, that's a license in license out version and the, and all of those things, and you can collaborate with them in the upstream, but what you can never get is Terraform for free. And if they'd done that, they'd have been monetizing all along at, at a significantly better rate.
Speaker 3:So my counter to that would be that not everything could be monetized to the same degree. Not everything so in particular, like, if you have if if you you cannot take bash and turn that into, like, a static file.
Speaker 4:Is not particularly valuable at this point.
Speaker 3:Right. And I think I mean, I I would argue the interform panel about, like, a
Speaker 4:hash table. They were, like, how do I monetize my hash table? I'm, like, you can't. No one gives a fuck about your hash table. But that's not an open source business model problem.
Speaker 4:That's a this software has no value as a product problem. Right? Like, we're just not willing to pay money for that problem. Right?
Speaker 3:So, anyway, this so it's something actually now we're gonna get really spicy because you worked for another company that was attempting to monetize a space that really wasn't clearly monetizable in terms of the NPM.
Speaker 2:Well, this is very funny because I wasn't sure if you were about to ask me what my plans are to monetize the tools that I'm currently building that are
Speaker 3:coming so far. I do that to be very gauche. I doubt that would be very gauche, frankly. I that's that's
Speaker 2:how I'm gonna explain.
Speaker 3:I I'm sorry.
Speaker 2:It's certain certainly something that I'm paying attention to, and I think is important. I guess the thing I'll start with is I don't think the package management space is unmonetizable. I just think that the way MPM went about doing it was terrible. I guess I will
Speaker 3:take the other side of that.
Speaker 2:I mean, these are these are not our favorite products, but, like, Artifactory exists. Sonotype exists. Like, there there are people who are taking your packages and are putting them places and then delivering them to you, and they are making a lot of money.
Speaker 3:Mhmm.
Speaker 2:But MPM, we can do.
Speaker 3:Yeah. So I guess that's, that's kind of my question is like, because Artifactory is a it's a I mean, it's a smaller business than I think NPM had eyes on being certainly than NPMs investors thought they were going to become.
Speaker 4:NPM's investors are done backflips if they could have been Artifactory.
Speaker 2:Yeah. I had no way so much. I feel like I've been competing with Artifactory my whole life. It's so weird. I mean, like, I
Speaker 3:mean, like, a rom com with Artifactory somehow or this is like
Speaker 2:Yes. I don't know. But I mean, Artifactory has surprisingly large contracts is what I will tell you. I think that you'd be surprised, like, literally Apple uses Artifactory, and Apple doesn't like using third party things very much. So Yeah.
Speaker 4:Yeah. JFrog's One of those JFrog's 2022 fiscal revenue was 280,000,000. 35% year over year increase. That's primarily Artifactory.
Speaker 3:And that would yeah. You're right. NPM would have killed for that kind of revenue. So the Absolutely. Okay.
Speaker 3:So so, actually, you say this space is is monetizable, and the and indeed that are
Speaker 2:better than more so now that, like, the I mean, Adam already mentioned, like, the supply chain, like, the supply chain of your supply chain. I mean, I love recursion. Right? Anyways, it's it's becoming very, very profitable, I think. Like, where the software comes from, where you're storing it, how you're delivering it, like, is very important.
Speaker 2:I think there are a couple of problems with with MPM's approach, and I was the little baby communist that I spoke of in the panel when I joined MPM. And so I I met a lot of, like, harsh realities very quickly working there.
Speaker 3:Is that gonna be a is that gonna be, like, a dramatized series on Hulu at some point? I I just really wanna go watch that. I just have this image of you. This is, you know, who who plays you, by the way, in the dramatization? Have you already kinda figured that out?
Speaker 2:I'm not sure, but I I'll take suggestions. That would be very interesting. But I think that this this kind of dovetails back to what Adam was saying, and I I do think was a problem, and I I don't think I signed an NDA at MPM. Anyways, it's all water under the bridge now. So old.
Speaker 2:But, like, one of the biggest problems, I think, if your company has, like, an open source tool, it's somewhere in it. I don't know. Maybe it's at the core. Maybe it's more to the side. I I think the key thing is that you can't be building 2 things.
Speaker 2:Like, you can't be building, like, your product that you're trying to sell people and then, like, also the open source. I think there needs to be, like, a story about how those are the same. Because if you end up building out 2 things, and that's what MPM was doing, like MPM enterprise was like a complete fork of the entire thing.
Speaker 3:Like, you're under control of the way. Yeah.
Speaker 2:You have, like, a conflict of interest with yourself. Like, we were competing internally. Like, it was very strange and awful. Yeah. And I think a lot of companies do this.
Speaker 2:I don't think this is just MPM. Like, I don't wanna throw a shade just on them. I think I've seen it in a lot of places. But that's definitely
Speaker 3:the way we did this in Atlas. Right? I mean, Atlas is still not open source. I don't think. Right?
Speaker 3:Was Atlas ever
Speaker 4:opened? You're talking about MongoDB Atlas?
Speaker 3:HashiCorp Atlas. Right? Everyone's got an Atlas. You know? It's great.
Speaker 3:The so yeah. But so, actually, elaborate on this while I determine if Hashicorp Atlas is actually a thing or some fever fever dream that I had. A
Speaker 2:lot of products, and I cannot keep them keep track of them. But, like, I don't know. So this is, like, potentially really embarrassing, and I can only hope that some VCs that I, like, had this anguished conversation with, like, hear this and, like, I somehow become redeemed. But, like, for a long time, trying to figure out what I was gonna do at Akzo, the thing that I was really stressed about was I was like, damn it. You can't sell software.
Speaker 2:The only thing you can sell is infrastructure. Like so I'm just gonna have to, like, take the software, and then I'm gonna have to, like, figure out infrastructure that's really hard for people to build and then, like, sell them that, and then we'll run our our vote on it. But So
Speaker 3:actually repeat that. You can't sell people software. You can only sell them infrastructure. Am I that by that, that correctly?
Speaker 2:The other thing that I will that that is what I said. Maybe that's not right. And like the thing I was really, and I can't say company names about this, but I had worked for companies that were doing the same kind of plan, ostensibly very high valuation companies. And just, like, depending on who your infrastructure provider is, like, the margins here aren't the margins that people anticipate in software companies. Right?
Speaker 2:Because everybody's developer experience product is an abstraction layer on top of somebody else's abstraction layer. And so we're all just, like, eking out, like, pennies on the dollar on top of somebody else's slightly harder to use thing. And I feel like there's, like, a tragedy there and that, like, can't we be building something greater maybe? And anyways, it's been a while it's been a while, like, just I was like, I'm gonna take some calls with VCs and, like, you're not supposed to take calls with VCs that, like, aren't invested in you and, like, try and have a brainstorm session. I'm just like a dumb little baby.
Speaker 2:But I was like, I don't wanna sell infrastructure. Is there, like, any other option? And it's like, no. Not really. And it's hard.
Speaker 2:And, like, the trick is that VCs are always attracted, I feel like, to software companies because of these, like, amazing margins that you can get. But now that we're on this, like, developer experience layer on infrastructure on top of layer of infrastructure, like, move, like, how that turns into a super high margin business. I don't know. There's certainly some some creative work to do there, probably along the lines of what Adam was talking about with, like, the productization, and that stuff does absolutely, definitely matter.
Speaker 3:Yeah. I
Speaker 4:mean, we really haven't really talked about, like, as a, like, as a community in venture, like, the amount of time I spend just educating people on choices. Just like, okay, here's this here's a situation, you know, the situation is that your software is in the Apache Foundation, and do you wanna build a proprietary thing? What do you do? And how do you think about that? Or what should you what's the move?
Speaker 4:And, like, why? Like, what are the comps? You know, what other companies can you see? Like, those conversations don't happen that much. Right?
Speaker 4:And, and mostly you just follow the, the herd, which is totally what you're saying. It's like, well, right. The herd would launch on top of a cloud provider, you know, even you see people like like, I don't know where railway is running right now, but I bet they're running a lot of that stuff in Edis. Right? And when you imagine a business like that running on AWS, you're like that cannot last.
Speaker 4:Right? There's no way that they can pay margin on top of them.
Speaker 3:There's no way that's gonna work with that. I mean, the rental model of compute, you have to own your own.
Speaker 4:At some
Speaker 3:point, there were another way. If only there was another way.
Speaker 4:Like, this
Speaker 2:is the thing I always said about Cloudflare. Like, the reason Cloudflare, I think, works so well is everyone's like, Cloudflare is like, we're not a DNS company. I'm like, Nope, they're not. They're a hardware company. Like the reason Cloudflare can make a shit ton of money is because they own metal all over the world.
Speaker 2:Like the more people who use it, the more money they make. Whereas for everybody else, the more you use it, the more your bills are.
Speaker 3:But this
Speaker 4:is the same this is the same thing with open source monetization. Right? It's the exact same problem. Today, like, I said the other day on Twitter what I thought was a very unspicy take, which is, like, DHH, who's not, like, a great person or whatever, but he, like, posted how much money he's saving with his Elasticsearch cluster. And I'm, like, he's absolutely saving that much money.
Speaker 4:And the number of people who replied to me, like,
Speaker 1:no, he's not. You don't
Speaker 3:know how to calculate total cost of ownership.
Speaker 4:And, like, like, just going around and around and around with me about how, like, you couldn't possibly run a search cluster as good as Amazon runs a bad search cluster for you. I'm like, that you're insane. It's insane. We've just we've got amnesia.
Speaker 3:And Well and and I mean, also, like, can we all please tip the hat to capitalism's Apex predator, Jeff Bezos, for
Speaker 4:a minute? Percent.
Speaker 3:Like Giving people this this kind of learned helplessness.
Speaker 4:Oh, what a move.
Speaker 3:Oh, what a move, man.
Speaker 4:Just a glorious thing. But, like, it's what's happening in open source too. When when we talk about open source monetization, the same thing's happening. What do you do to to monetize an open source company? Poor Ashley.
Speaker 4:She's gonna go she's going talking to venture capitalists. They ought to know better. They're like, what other moves do I have? They're like, I don't know. Those are the only moves we know, only moves we see.
Speaker 4:So, you know,
Speaker 2:they That's what they told me. They basically were like, and we're saying no. And I wasn't I was like, I wasn't even asking you for money.
Speaker 3:Oh, I do. Oh, I isn't it great? I love it when people pass on you and you don't even ask.
Speaker 2:I'm getting denied and I didn't even ask.
Speaker 3:Yeah. Ask. Yeah. But it's just Here's the thing.
Speaker 2:And you asked for the channel baby communist Ashley here. So, like, I want there to be a world, and maybe this is because I'm just like, I learned how to write software, and I think it's really cool to write software, and I'd love to, like, be able to pay for, like, my cost of living with it. Like, do we all just have to start buying up computers all over the world, or, like, what's what's our answer here? Like, software, like and is software, like, not monetizable because open source? Like, did we just price fix it to 0?
Speaker 2:Like, is this something that Yeah. It's not just, like, something that happened, or is it something that we made happen? No. And now we have to, like,
Speaker 3:do we have to be able to do it? We did.
Speaker 4:We did it to ourselves.
Speaker 3:We we have to. But it will we but it was gonna happen. I mean, it was never. So the I mean,
Speaker 4:I don't think it was inevitable. We can fucking undo it tomorrow. Yeah.
Speaker 2:Anybody just decided to open source Did anyone, when open source was, like, starting to happen, like, go, like, hey. Like, you're about to screw yourself? Was there was there any, like, data there during that time?
Speaker 3:No. No. So what you had is you had this era of proprietary software companies, and their disposition towards open source varied, and you had people like Microsoft at kinda one extreme that spent a lot of time and spilled a lot of ink talking about how open source is going to be the end of days. And but the folks that were actively disrupting those folks rightfully said, like, no. Actually, you sorry.
Speaker 3:You're delivering an inferior product to people at a price that's too high. And open source actually allows people to get out from underneath the natural monopolies you have in your customer. So it was because kind of demand side where people that rightfully kinda generated all that energy. It is ironic to me that you have these then people that are very much born in that open source era that now then realize, like, wait a minute. Like, what about me?
Speaker 3:What how do I become a proprietary software company?
Speaker 4:And and it's a problem. We we didn't like when we back in that era, we didn't talk about the fact that, like, the monetization vector for our software, like, was was, like, we all got high on the principles. And so there was, like,
Speaker 3:a group of people who were the lift of open source
Speaker 4:and the lift of what it could do for other people is so powerful that it makes up for bad for a bunch of inefficient bad models. And the that that lift is very unmeasurable. You can't really you can't put it in a spreadsheet. And so, like, I think when we say that open source sort of broke it, I think what happened is it did break it. And what what broke it was, we now know that this open source lift is real.
Speaker 4:When you build something valuable and you let other people also create value in their lives with that thing, in whatever way they need to to make their lives better, they do it. And it becomes more, it becomes better than it was before. It becomes stronger. It goes wider in the world. All those things happen.
Speaker 4:But we, like but as soon as we decided that what we were doing was disrupting incumbent players, we cut the price in half. Right? Like, Chef and Puppet did this. We were such dummies. Like, BladeLogic was selling at 10 times the price that Chef and Puppet were.
Speaker 4:Right? And and because we were open core companies, we set the price for our products so low because the alternative was ourselves at $0. And, like, it was just it was dumb. It was bad business, but it was also bad open source strategy because none of those things are now sort of I would I would I would argue that probably most people aren't happy with how those open source communities are being managed at this point because they were bought and sold and sent to other people and right? Like, no shade on any of the acquirers.
Speaker 3:Anyway, it's just So I I I think so the actually, to answer your question about, like, how do we do it? What does it mean? So I do think and I made this point in my deck, and, the my my cofounder, Steve Dockers here. A point that he we try to make to venture capitalists, but they don't like to listen, is that you are fixated on gross margin when you should be thinking about net margin. And Yeah.
Speaker 3:VCs don't want they don't wanna focus no one wants to talk about net margin. Like, the people who wanna talk about net margin are people that want that.
Speaker 2:My conversation with those investors was, was about net margin, and I got, like, total They did blaze over. And the reason they
Speaker 3:blaze over is like, look. VCs are building the flip. This is the this is the the the challenge with this model, is that you are ultimately building the flip. You are building the company to sell it, and you are either gonna sell it to the public, if things go really well, or you're gonna sell it to a private company, if things go well, or you're gonna sell it to creditors. Things don't go so well.
Speaker 3:So you but you are ultimately you are not actually and and these VCs, you know, all the VCs that have, you know, the Apple placard up on the wall or the Google placard up on the wall, They actually sold Apple when it was at 1 1,000th of 1% of its current value. And they had to, because they had to actually they've got a fund with a limited lifetime. And so what they are looking at so they will and I think this is where and and, Adam, you and I strongly agree that it is the entrepreneurs ultimately to blame. Although, entrepreneurs have to be responsibility, not the VCs. But then you need to be aware of what the the model is around a venture funded business.
Speaker 3:And a high growth, high margin, high gross margin business is catnip to the next person you need to sell it to. It is not sustainable. So VCs will have you build HashiCorp, and they will have you IPO it. And you will be now a $5,000,000,000 well, I guess, Adam, out of all we Sub 4
Speaker 1:sub 4 now. But yeah.
Speaker 3:Or exactly. It's like the scene in airplane. It's, like, now arriving, like, day 13, day 12. Yeah. Yeah.
Speaker 3:So the they they are at evaluation that that cannot hold in terms of what their act in terms of the actual business. If they had focused on net margin earlier, they would have built a smaller business that is sustainable. And I think that we do not focus we you'll let VCs pump a ton of money, and then when they pump a ton of money in you, they wanna see growth.
Speaker 4:And then
Speaker 3:they There are new VC firms
Speaker 2:out there, like, that are focusing on this. But I also think and I do wanna step back because I I don't want us to be bashing on VCs too much or even entrepreneurs, because I think this ambition is part of open source and everyone who participates in it, whether or not they have a company or, and I, like, I don't think the ambition is terribly different.
Speaker 4:No. And I think I'm, like, I'm pro ambition regardless.
Speaker 3:Okay. So I'm gonna say alright. I will take the other side of that. I think when you got ambition, but without the kind of the the massive investment, then you then you're like Lua or Curl, and great. Good for you.
Speaker 3:I mean, it's like you you just end up being ubiquitous in the substrate
Speaker 2:it was very, very popular and no one would give you money to work on it?
Speaker 3:No. Because I I mean, no. I don't think.
Speaker 2:And you
Speaker 3:I don't know.
Speaker 4:It's Do I
Speaker 3:It's like a trap. Else.
Speaker 2:It's not a trap. It's just like I I feel like there there should be an empathy for that position somewhere in this conversation, and it feels a lot like the ambition of, say, like, an open source company that doesn't build, like, a slow, thoughtful business strategy, ends up wildly successful with a massive customer base and absolutely no way to fund it. And that's a story that happens in open source all the time.
Speaker 4:All the time. Like Yeah.
Speaker 2:Like, just for the individual. It happened to me multiple times. And here's the thing, they will bash you as the maintainer the same way we're bashing the VCs right now. And in a certain way, they're right because your sin was ambition. And I've gotten my ass kicked by this so many times.
Speaker 4:Yeah. And I think there's a there look, we should have I have empathy for everyone involved. Like, what Brian was just saying about net margin, like, it's true in that, like like, ultimately, you need to become a profitable company. The mar the the actual often, if you're if you're running net profit, but the growth numbers aren't as high as they could be, that's an that that's a bad way to spend their money. And because you could be growing quicker, and, like, if you wanna see what happens when VCs start to care about net profit, get to a place where the growth starts to slow and your ARR number is creeping up toward a $100,000,000.
Speaker 4:And next thing you know, every board meeting you're having is about net profit margin. So, like, you know For sure,
Speaker 3:but only because they wanna flip. Again, like, they're trying to flip, ultimately, which is Well I'm not I'm not faulting them for it. But it's, like, they've gotta live Yeah.
Speaker 4:They need to flip it. But also, like, as an entrepreneur, you'll want to too because there's all these people who have stock and you're gonna try to get them as much money as you can. Right? Because they've put their lives behind this thing you're trying to build. So, like, I I just, like, I very much wind up on the entrepreneur end of that argument.
Speaker 4:I think venture capitalists are what they are, and we sort of, you know, you know what they are and you know what their business model is. And if you don't, you can find out. And they're pretty they're they're certainly bad actors who will who will not tell you the truth about what they're looking for. But most of them will, especially if you say, like, I know what you are. And I think to Ashley's point about, like, you know, if you have a big popular open source project and that success runs away with you, like, it's difficult to figure out after the fact what the right thing to do is to sort of get yours.
Speaker 4:And you know what I mean? Like like, if you're, like, hey, I've built this massively popular open source project. Everybody's using it. They hate me because I'm not, like, building it fast enough or whatever. I'm having trouble, like, making ends meet.
Speaker 4:It's pretty difficult at that moment to decide, like, oh, crap. Like, now what do I do? Like, how do I how do I get mine? Like, how do I support these people? And, like, when when we don't, we wind up in this, like, interesting burnout cycle.
Speaker 4:And when we talk about sort of the complexity of open source and we talk about open source and capitalism, that angle, I think, is the is the is the one I have the most empathy for because those people are putting in great work, incredible effort, often very load bearing effort, and we just cannot figure out how to get them paid at all. And, like
Speaker 3:But but really I mean, I so okay. I think that we and we say getting mine. I don't know exactly what that means. But in terms of I mean, if if we are actually talking about, like, putting food on the table, it'd be kinda interesting to know. It's like, so Postgres is an example where for many, many years this isn't this isn't true.
Speaker 3:There was not a there was not a company that was built around Postgres. Right. Ultimately, like, Citus was built on Postgres, and but they had a bunch of stuff that that was not part of Postgres, and then ultimately exited Microsoft. But, like, I mean, Tom Lane and and and Josh Burkes and all those folks, I mean, like, I I I don't know. I mean, were they and maybe they were, like, struggling to eat.
Speaker 3:I don't know. I mean, it it feels like they
Speaker 4:I don't think they were buying houses in the Bay Area.
Speaker 3:Sure. But it I mean, I guess that that's that's kind of the question is, like, what is the part? Who's who's substack is? Yes. Yeah.
Speaker 3:Yeah. Yeah. Yeah. Definitely. Yeah.
Speaker 3:For sure. Yeah. I had to, like I I I had to, like, go through my my 2011 time machine. For sure.
Speaker 2:Sorry. It's a lot of stuff. Substack is the picture, the xkcd that somebody posted here. And, like, I mean, I know a lot of folks that have created an immense amount of value and have not been able to recoup it. And I guess I kind of wanna pop the stack a little bit only because, like, we talked about open source businesses behavior, and, like, the goal of the LF in popularizing, like, open source was, like, to get companies to use it.
Speaker 2:I think a real question is is just, like, how do we get more open source companies to, like, exist, or is the idea that, like, we don't want that to happen? Because, like, I do think we're seeing, like, a consolidation in open source that is, like, amplifying the problem that we are talking about.
Speaker 3:Okay. Hot take. I think it's fine if you have them exist. I think it's actually okay. I and I think it might even be good for Ball if you have them exist.
Speaker 3:And I think that if if Mongo had never been turned into a company, or Redis never been turned into a company, I it would have been fine. And I think that that and I and I I kinda look at evidence of that. It's like, there's not a there's not a company around Python. There's not a company around Pearl. There's not a company around Apache.
Speaker 1:So, Brian, some of those
Speaker 2:There's a company around Python, but it's anaconda. Anyways.
Speaker 1:It it like like, everyone likes to use Red Hat as their example of successful open source companies. But I remember a feeling in the early 2000 that Red Hat was almost conjured out of existence because it needed to exist. That is to say, there were all these financial services companies at the time who were deploying Linux, who wanted someone to yell at when it broke.
Speaker 3:And if it hadn't
Speaker 1:been if it hadn't been okay. Go for it.
Speaker 3:I think that that, Red Hat needed Spark to exist at x86.
Speaker 4:Oh, it fully did because that's why yes. Of course, it did.
Speaker 3:The I mean, like, Red Hat like, the the I mean, the greatest lie the devil ever told is that this this machine, this Linux machine is outperforming the slowest machine. But our
Speaker 4:but our actual sin here with Red Hat, Adam, is that is that when we talk about Red Hat as an open source success, we always talk about anything, but their business model. We talk about the circuit the market circumstances. We're always, like, well, in these circumstances, they could pull it off. In these circumstances, it was okay. It was because they had IBM.
Speaker 4:It's because Solaris was overcharged. Sun was overcharging for Spark. It's because this. It's because It's a dog. Because this I mean,
Speaker 3:if Spark and x86 flip roles, the x86 was just like it was cheaper and faster and better. Yeah.
Speaker 4:And and all that's real. And also, they also happened to figure out by accident, I think. But but they did figure out the most efficient way to monetize the lift that you get from building massive open source communities. They've done it over and over and over again. And whenever anybody says, well, why don't we do that?
Speaker 4:The answer is always, well, you don't have the market circumstances to let you do it. Now you're just selling support. Now you're doing this. Now you're doing that. Part of why I don't talk about selling support is that, like, to Brian's point about VCs only loving that margin, like, they also hate it when you say you sell support.
Speaker 3:Yeah. You can't. Right?
Speaker 2:Yeah. They don't like services.
Speaker 4:They don't like that. They don't like that. They don't
Speaker 3:like that.
Speaker 4:Trust. But if you say you're selling, you know, ARR, if you're selling SaaS revenue, they love it.
Speaker 3:Oh, I like that. No. No. I like that. I like I like the cut of your chip.
Speaker 4:I like I like the I like that reoccurring SaaS revenue. And so the when we talk about Red Hat or we talk about those things, I think you have to separate out the dynamics that meant that the software that they produced or the products that they built were competitive in theirs in their market, which absolutely is true and happened from the business dynamics that allowed them to monetize it at a degree of efficiency. And Red Hat run away. It's not just Red Hat, like, Red Hat, Sousa, Sousa has been public twice now, sold, like, 5 times or something over over and over again. Like, those companies are really efficient in monetizing in a way that, like, nobody else is.
Speaker 4:And, like, Larry Wall, like, there was no company around Pearl, but also, like, who thinks Larry Wall got enough money for in relative terms to the impact he had on the industry? Because I think Larry Wall probably got the I'd like, I'm sure he's a happy person or whatever. I'm actually terrified to meet Larry Wall.
Speaker 3:So Adam has got Larry are these now when we do our Larry Wall stories, Adam? May maybe I need a
Speaker 1:beer in hand for my Larry Wall meeting story. Suffice to say I had the wrong heroes when I was a high schooler.
Speaker 4:I'm just, I'm so scared of meeting Larry Wall. I can't do
Speaker 1:it. Justifiably. Let me just be really clear.
Speaker 3:Adam says honor your fears.
Speaker 4:Yeah. But I don't think Larry Wall but I don't think Larry Wall probably got enough
Speaker 1:for what he has. That's such an interesting concept of, like, getting yours or getting enough. Like, just because you've created value for other people, like, what entitlement do we have to the value that we've created without capturing?
Speaker 2:Know it's taking
Speaker 3:a game to
Speaker 1:be Like, you you talk about talk about it. Yeah. Talking about Larry Wall. It's like he's done he's done great things, and certainly, a high school Adam Leventhal, believed that he did great things. But I'm not sure that he like, that I don't know that we owe him anything in particular.
Speaker 1:And I think the the typical path to monetization for folks like that or the traditional one is to be hired by Google. And I don't know then what you have to do there, but maybe that's dried up.
Speaker 4:I mean, I think about I think about, like, Mark Burgess. Mark Burgess in configuration management, infrastructures, code, automation in general, no one's done more to move that that that art forward than Mark. And, like and and I'm not saying that he deserves something, because he doesn't. He made his choices. He knew what he was doing.
Speaker 4:I'm an American or whatever. You know? But, like, but but at the same time, like, I don't think we've figured out how to how to help folks unders who do make who haven't who have put incredible value into the world. They have made it possible for lots of people, lots of companies to be successful and to thrive, and and how to make sure that those people are taken care of for their work. And it's not because we owe it to them to be taken care of, but, like, my career wouldn't exist at all without Larry Wold.
Speaker 4:Right? It just wouldn't. Like, if Larry Wold hadn't written Pearl, I'd like, I don't think I'd have a career. And, same with Mark Burgess. If he hadn't written that configuration the those early computer immunology papers, like, I don't know what my career would have been.
Speaker 4:It would have been very different at the very least. And, like, I think there's a there's something inside the conversation around open source and capitalism that, like, where where because what we're doing is creating software that is limitless as long as you have the compute to run it. It They can go into the world. Anyone can take it. You can do what you want with it.
Speaker 4:You can read it and understand it. It's such a powerful force, and and yet, if you build something that's truly fantastic and you're not very careful about how you want to monetize that, or if you want to, then it can easily run away with you. And suddenly, lots of other people have changed their lives materially, and your life is roughly where it was. And that, you know, whether it's right or wrong, it doesn't always feel particularly fair.
Speaker 2:Yeah. So one of the ways I like to talk about this, especially when I find myself in what I would call mixed company, because, again, baby communist actually got very sad about open source but remained mostly communist, is, like, you have to think about an economy, like, as an as a technology. If we were like, think about the free market the way the people who love the free market think about the free market. They believe that the free market economy is a very efficient technology at distributing resources to the people who can create the most impact with them. And so if that's true, then we have a big problem on our hands with this like, this entire conversation would kind of suggest that the economy is broken if that is what it is supposed to be doing.
Speaker 2:And so I, I loved that we, like, we're talking about greediness and then even this kind of like offhanded, like language of like, get yours, get mine. But, like, I do think it is valuable to try and think about, like, what is this work worth? And certainly, there seems to be some amount of worth to it because people will spend an immense, immense amount of time on it.
Speaker 3:Yeah.
Speaker 2:Like, there's there's a value here, and there's a value that is incredibly difficult to capture, which which I think is complicated. And probably, like, if I if I was smart enough or, like, had enough capital, like, that that's the problem that I think I'd like to see solved. I wish, I don't know, I could go back to school and do, like, a PhD in economics on this, like, exact I
Speaker 4:wish you could.
Speaker 2:I really wanna do it really badly. This is a call to anybody who would like to fund my PhD in I
Speaker 4:mean, I think I I think open source as it was in as as invented and then as it has played out since it was invented is essentially utilitarian at its core. And I think it has all of the utilitarian failings that happened there. Like, the con what is the conception of the good? Right? Like, what exactly is it that we mean?
Speaker 4:What is it we're maximizing when we talk about the utility of something and and why? And then, like, what happens when, you know, the utility monster comes and it just, like, it gets more good from the same unit of utility than everybody else does, and therefore, it deserves all of the yummies, you know? And, like like, we see all of those same philosophical problems inside open source communities and inside open source businesses. And I think and I think thinking I do believe that there's there's something there in the responses in, like, political philosophy to utilitarianism that that that perhaps points a finger at how we can think about changing the way open source functions. But you have to start talking again about the conception of the good.
Speaker 4:Like, I say get mine a lot in this conversation and that I was I was doing it to be pointed. Right? Like I wasn't, it wasn't an accident. I was saying it that way. Cause I was poke, I was, I was poking at it because
Speaker 3:like Yeah.
Speaker 2:I did not mean to say it was an accident by the way. So sorry if it came off that way.
Speaker 4:That's okay. I just wanna make sure people knew I was doing it on purpose.
Speaker 3:Like It was an ironic, get mine, please. I'm talking about an ironic metaphorical, get mine.
Speaker 4:And and that and but the reason is that, like, the when you think about, like, when we think about open source and the utility of it, like, I think we do actually need to have a conversation that says, what is what are the what are the goods that come out? The not not goods like stuff, goods like in your heart, things that are valuable to you, us as people, that we receive through participation in open source communities. It's it's wider than money. One of them happens to be money. Like a reason people participate or that we build these things is for money.
Speaker 4:And but we don't spend a lot of time talking about what those goods are or what the social contract is between us. And even Brian and his talk talked about how the social contract is sort of embedded in open source. But that social contract is a very utilitarian social contract, and and it's problematic. And and it leads, I think, to a lot of the underlying problems that we've been talking about for the last hour. Like, there there's there's there's just a lot of how humans interact with each other and how we behave and what is it we agree on and don't that, like, that we're playing out that we kind of already know leads to shitty
Speaker 3:outcomes. Well, and I think there's a certain degree where you get to kind of, like, the the increasing divisiveness, societal divisiveness. And I think that the and maybe this is just maybe I'm actually, like, full adult communist Brian. But I I I think that if you are seeking to capture all the value you create, you're gonna live a life of resentment. And I Really?
Speaker 3:And especially in open source, you are going to create more value than you capture. And the so you need to figure out a way, and and I think that you you can't get bent out of shape about that. And I I think that that's a you're just gonna make yourself miserable if you get except, I mean, you know, Adam, but I feel like I'm I'm
Speaker 2:gonna poke
Speaker 3:at this.
Speaker 2:Wanna poke at this because I think you have to get bent out of shape of it, and and this is why. And this is coming from my history of assuming that open source was, like, creating software that literally anyone should be able to contribute to. So when I showed up very classically, it was like, why every why is everyone here white and a dude? And what I didn't know at the time, but is probably just very functionally true, also, like, kind of rich, like, in the scheme of things, like, globally. Like, if we want open source to look more diverse, then we need to be able to guarantee that the value capture is, like, at least some.
Speaker 2:And like we
Speaker 3:can't do that. For sure.
Speaker 2:And like I'd so I think like it is okay and actually kind of good to get bent out of shape about it because most people can't afford to just, like, give away a bunch of shit for free.
Speaker 4:Yes. And the when we talk about the distribution of the goods, we talk about, like, whatever it is that people get out of open source that's valuable to them. We don't set up social contracts that actually talk about the fact that it is not it is we are not all equal in our position relative to that distribution. And, like and because of that, there are circumstances we don't wanna find ourselves in. For example, Kelsey Hightower does not want to find himself rug pulled after having spent 10 years being an incredible vocal advocate for HashiCorp.
Speaker 4:Right? He wouldn't have done that for Microsoft for free. Right?
Speaker 3:But he
Speaker 4:did it for HashiCorp for free, because it was open source and he thought he was doing the right thing. And suddenly, he was on the wrong side of the line. And, like, I think that conversation and that idea that there's a social contract embedded in what we do, like, I we have to talk more about it if we wanna solve the the more fundamental problem. We can talk about how to solve it in business. It's kinda more clear because the puts and takes are more obvious, but, like, but, ultimately, it is about saying, like, who gets to participate?
Speaker 4:What are we willing what are we willing to accept if we don't know, like, what our position is going to be in relative terms, and and what aren't we? And I think that that conversation is one that I don't really see happening in open source.
Speaker 3:Yeah. I totally agree with you, Adam. And I I I I think that when we because on on the flip side of it, when you've got this kind of this this avarice in in companies, and not because I I think I to clarify what I'd said earlier about I I think it's when you get hung up on on capturing all of the value that you create Yeah. As problematic. I agree with that.
Speaker 3:And because in and then, I mean, rightfully, someone in the chat is like, alright. So when do I get my free oxide rack, mister? It's like, no. No. No.
Speaker 3:Sold are 0. The cost of goods sold of our rack is not 0. The cost of goods sold that because it's a physical thing. It has to live in the real world. Software lives in this unbelievable world that is the confluence of information and machine.
Speaker 3:It is truly unique, and it gives us this extraordinary capability to create this massive amount of value with effectively no cost of goods sold. And, and as a result, you are not going to capture all of it. And so the question, but but then I think the flip side is, when you have this kind of, when people view that is like, oh, great. So these morons are going to create value, and I am therefore gonna come in and capture all of it. And I am now going to, Adam, to your point, I am now gonna rip up the other end of the social contract.
Speaker 3:And I will actually I I, the the the Dave McJanet, I will capture their value. Or that's Or the c
Speaker 4:and c and c f. I had this conversation with, like, the like, look at the service mess space. Like, Linkerd, it's a crime that Linkerd is not a huge company. That was such a great piece it's such a great piece of software. It's so good.
Speaker 4:And it's in the CNCF and everything. And you know who the winner is? Istio.
Speaker 3:Right.
Speaker 4:And like not because it's better. Right?
Speaker 3:Like Yeah. Well, I've got some Yeah. I mean, okay. Okay. I've lived that life.
Speaker 3:I mean Yeah. I get it.
Speaker 4:And and Ask
Speaker 3:me about eBPF.
Speaker 4:Exactly. And so, like, what's happening in those spaces, like, when we're when we're talking about it, like, it's not that there'd be some better way to pick a winner or whatever, but it's just I don't know that that when the when the folks at Linkerd were deciding what to do and how to orient their business, I'm not sure that they made the right decision by putting that software into that foundation that way. Right? I'm not sure that that that meant that the work that they put in to build that piece of software, to make sure other people could run it for $0 to move forward the service mesh space. Like, I'm not I'm not sure that the rules of the game that they set up were the right rules for them.
Speaker 4:Right? Maybe they think they are. But, but I bet they have regrets. I don't know that they have regrets, but I'd have regrets if I were them. And, like,
Speaker 3:yeah. I I I have regrets that you don't have regrets. I think you should have regrets.
Speaker 4:Oh, I think they have so many regrets.
Speaker 3:What if they didn't? What if they didn't? You know what? They will it be it? I mean, it's like, oh, yeah.
Speaker 3:We we created this thing, and, like, actually, a bunch of people will use it, That the there's a false dichotomy between kind of winners and losers in software because when you do when you create these things, they they they do survive effectively in perpetuity. Folks are asking me in the chat, like, wait a minute. The cost of goods sold is not 0. It doesn't it it costs a whole bunch of of, like, energy to create it. It's like, yes.
Speaker 3:The cost of goods sold is actually 0. So it doesn't cost the the the actual, like, once you have written it, the cost is 0. And, this is very unlike anything else. We've I mean, it's more like a movie or a song. It has this it recorded, and things have this kind of this the same attribute.
Speaker 3:So, Adam, what advice would you I mean, let's get some of the advice that you would dispense if you've got so, you know, either go back in time to whether it's link or d. I mean, what advice would you give link or d? Not not to go to a foundation, perhaps. What should
Speaker 4:I'll give it to chef because it's easier because I lived it and I and I and there's, like, and there's, like, I I can see icons in the chat that, like, I know. So, like, I have regrets about the way we ran. I wish I'd known the things I know now when I was running that business then. The regrets I have around it are primarily around the return. Like, I think we did a good job of maximizing as much of that return as I could to the people who had put their lives and energy into building it and trying to find a good space for that software so that the community that had been built around it could have a shot at sort of continuing to thrive.
Speaker 4:I don't know that all those things worked out for the best in the end, but I think the number one thing is that if you want to ensure that your open source community can reach as many people as possible and have the biggest impact possible on their lives, the best way to do that is to be as successful a business as you can possibly be. Because the what what makes it possible for you to do all of those things that enable those good things for people is because you're continuing to generate value and and continuing to be able to fund that value sort of across the horn. If you built a great open source community that was funded on venture capital dollars, that eventually falls apart because to your point about net margin, it can't sustain itself. Like, I don't know that that was I mean, it's great that the software exists, but it will be fundamentally different. You know, RethinkDB is not what it was.
Speaker 4:You know? And and I think and and and I think there's a so that's one thing. The other is that you have to think about your business model as a business model separate from the open source dynamics. So there are dynamics that happen in open source that are a combination of the license, there are copyright holders, there's patents, there's trademark law. The over the overlap of all of those things are what create your ability to use open source to impact your business.
Speaker 4:I think the and so the situation is different. Right? The the folks who took, who built temporal, like, had to fork it from Cadence. Cadence was a thing that that they wrote while they were at Uber. They left.
Speaker 4:It was open source. They took it. They forked it, made Cadence. Now the Cadence is what or temporal is what the company is, and Cadence is the software they forked it from. And they need to do that because they needed to own the trademarks for the software that the company they were gonna build.
Speaker 4:Right? And then they had to figure out how to collaborate or not with, you know, the original Upstream or or those pieces. So, like, each each company has their own sort of complicated thing. To me, I really believed that the that there was a that the right thing to do was to try to mitigate the tension between the community's needs and what the open source community wanted and believed and what they saw is good both for themselves and for each other and what the company needed, and that you were trying to straddle some kind of balance between them. And I think that that was a that's a fundamental mistake.
Speaker 4:Like, in truth, they have to be the same thing. Like, if those dynamics are not identical, if what's good for the community is not what's good for the driving monetary force behind the software or the product, then eventually, that company is gonna do something bad to that community. Right? They're just gonna because because the because that there isn't a social contract that's been written down. There aren't really consequences in the way that you imagine there could be because you hurt someone's feelings who has less power than you do.
Speaker 4:And I think we have to be intentional about how we create those dynamics, especially if you're a person like me or like Ashley or like you, Brian or Adam, I who, like, is actually emotionally sensitive to to wanting to actually have the good valuable part of open source exist in the world. Does that make sense?
Speaker 3:Yeah. Very much so.
Speaker 4:And we just don't do it. Like, we don't talk about that when we talk to entrepreneurs about the open source stuff that they build. We don't say like, hey. How how do you keep this in line? Like like, System Initiative is Apache licensed because I know that there's people who would consider building on top of system initiative, but wouldn't, if I use
Speaker 3:the GPL.
Speaker 4:And And at the same time, I'm pretty sure it should be GPL because then I couldn't rug pull you if I wanted to.
Speaker 2:Interesting.
Speaker 3:And And so, Adam, who is the, the model of a company in this regard? If someone's like, alright, I'm a start up. I I I want a company I can look up to. Who's doing it right?
Speaker 4:You have Red Hat only. If you're talking about this from a not from a always as the best open source actor, but if you're looking at efficient monetization of open source software, it's Red Hat by an incredible margin and everybody else is in also ran.
Speaker 3:Okay. And then so I say, and I think Red Hat was kinda lucky, and I think that they ended up with this kinda critical mass because of this kind of historical
Speaker 4:That's what everybody will always say. And then you'll go off and build an open core business. And when that core when that business goes public and we look at your books, you're gonna be just a twinkle in God's eye of the efficiency of Red Hat. And you'll explain it away by situation and circumstances, but I don't think it is. I think it's really straightforward.
Speaker 4:I think they'd like there's a reason that they sell products at a higher price point and more of it than their competitors do. Because if the alternative was true, why doesn't Ubuntu win? Ubuntu's everywhere. Yeah?
Speaker 1:So
Speaker 3:Yeah. Right
Speaker 2:now it was not that long ago. I guess, I I I wanna have optimism, but I think I'm I tend to be a little
Speaker 3:bit more on on Brian's team here. But instead of thinking like, oh, I'll make
Speaker 2:an open core business and just, you know, it'll suck or whatever. Like, just it is is there a business model that includes open source in some capacity that works? Like, because there hasn't been another Red Hat yet.
Speaker 4:There have been. SUSE, like I said earlier, follows Red Hat's model. Chef is now no longer, is
Speaker 3:now no longer a standalone company, but we followed that model. And when we did,
Speaker 4:our revenue went up relatively significantly. I think the and and and it's kind of like asking, you know, like, Oxide builds computers, why hasn't there been a great computer company in a long time? Right? And, like, as evidence of why it is that there shouldn't be a great computer company. It's kind of the same.
Speaker 4:Like, the truth is it's because open source is really complicated.
Speaker 3:Yeah. It's fair.
Speaker 4:The the dynamics of how open source overlaps with how we build product is complicated. Most of the people we talk to don't understand the delta. Like like, it took me many, many years of study and time to understand the distinction between the software license and a distribution license, and that those two things don't have to be the same. I didn't know that that was I like, that took a long time to figure out. And, like, and and that's, like, one of dozens of things you need to know in order to think more clearly about how you stack up all the different tools in the tool belt to change the way the model works.
Speaker 4:So, like, and and at the same time, everybody's just telling you, well, look, just because it's inefficient doesn't mean I don't get to be HashiCorp or MongoDB. Right? Like MongoDB, Elastic. These are public companies. Everybody made they're all billionaires, right?
Speaker 4:You hear Mitchell Hashimoto giving a talk about how they built an incredible company and went public, and he's flying an airplane and writing a terminal emulator. And he's like, yeah, open core bitches. And then, you know, here we are, Oxide and Friends. And I'm like, well, my my little open source company only got to 89, 80,000,000 in ARR, and then I had to sell it to progress,
Speaker 3:No. No. I've just seen the pictures he tweets out.
Speaker 4:The pictures are beautiful.
Speaker 3:Pictures are beautiful.
Speaker 4:I like Mitchell. Mitchell, I'm sure, is having a great life. But, like, but, I mean, the like, there's a lot of evidence, like that open source is so powerful that it makes up for this terrible inefficiency. And so, yeah, I'm, I'm actually quite optimistic that we're gonna figure it out. I just, it's just a question of how much longer are we gonna stay in the dark.
Speaker 3:Okay. So I would like to also point out that there's another route that I would call the coward's route because it is my route, which is to actually sell a product, build a product that, is not the software product in which the software is very important, but it's also ancillary. That's what we've done on OXNET.
Speaker 4:Yeah. Sure. Which look. I'm I'm all in. Right?
Speaker 3:But in the I would like to there are other, like, really important there have been important open source contributions from I mean, we talked about Uber, Euler. Right? From Uber, from Lyft, from LinkedIn, from Amazon, from Google, from these companies that have actually a an unrelated business. And that business is a it it it can support the development of open source software, and that they contribute that back to the commons. So I think that, like, that is a model, and it's, I know that it's, not always what people wanna hear, but we we have been kind of implicitly or explicitly talking about really pure software companies.
Speaker 3:I'd also like to point out, not to be too morbid, but, software companies just tend to consolidate no matter what. I mean, there was a huge I mean, before the dotcomboom, there was a there was a tremendous boom in software companies in Silicon Valley in the eighties, more or less all of what all of which, you know, also, it's been kinda interesting that you've been using we've been talking about Red Hat as if it's an independent company, which is kind of interesting. I mean, I guess that they've they succeeded in tricking us. And I mean, when you've been saying Red Hat, you actually mean IBM.
Speaker 4:Well, now I now I mean IBM. But I would argue that, like, part of this part of the danger of Red Hat being acquired by IBM is that even when you talk to people at Red Hat and I've tried because I I feel like I had this revelation about what their actual business model was and how it functioned. And then I went, like, deeply in search of people who got it. Right? I was, like, oh, my God.
Speaker 4:Is that how this works? And then I was, like, I couldn't shut up about it. And I, like, used every trick I had to gain access to people to be, like, will you talk to me about this? And, like, I went and found open source lawyers and I talked to the and, like, there is a cadre of people who really understand that this what I'm described saying to you is really true and they don't talk about it because for them, it was a competitive hedge. Like, it was a competitive weapon they had that they knew how to do this and other people didn't.
Speaker 4:And and they built a company around it that that is successful. And but also like over time, of course, the knowledge of where that comes from erodes. So like, you know, companies, companies behave like their founders for a really long time even when their founders are gone. You know?
Speaker 3:Yes.
Speaker 4:Because their spirits just sort of infuse the place. You know?
Speaker 3:I mean, it's amazing that we are now way more than a decade past the life of Steve Jobs, and Apple still I mean, it still has all many trademarks of Jobs.
Speaker 4:They'll have it for a 100 years. Right? That wall if you go to Walmart headquarters, it's covered in Sam Walton, you know, like, it's just he'll be there forever, but, like, Red Hat's the same. Right? Like, there's this storyline of who they are.
Speaker 4:So, like, one of the big risks was that IBM doesn't actually understand what those dynamics were and are. Right? And in fact, like, probably has a counter view of what those dynamics were and how to monetize them best and was and and dramatically less efficient and bad at it. Right? So, like, there's a real risk that Red Hat itself actually stops being great at what made Red Hat's business model so efficient.
Speaker 3:You have none. So I wanna just I
Speaker 2:Well, I was gonna say, Glenn, there's something that you said that I wanna pull on, and I don't know if it'll end up making the conversation because I'm sure we're kind of wrapping up, but, like, I don't wanna make it end on a negative note necessarily. But you you just kinda reiterated this about, like, software companies inevitably consolidate. I think, and maybe this is just totally off base, that one of the great things about open source is that it is kind of like a a check on that consolidation because there's always people spinning up all these weird little projects. Yep. One of the trends I see in open source more and more, especially if you're looking at, like, university folks and folks who, like, wanna participate in open source.
Speaker 2:Like, they're not going the independent route. Like, they're going the go get the, like, 200 k junior developer salary at, like, Microsoft and, like, work on open source via these large organizations. And if you look at the people contributing to the popular open source projects these days, like, the percentage of contributors coming from massive companies, has never been higher, like, literally has never been higher. You had shared that you think maybe it's good if there's less open source companies. And I think I disagree.
Speaker 2:1, because it's self serving and that's obvious, but 2, I don't think
Speaker 3:that company is good. Obviously. I mean, I don't You said you said it. You said you thought
Speaker 2:it would be good. And I was like, woah. I think that that has some really long term system effects that I don't like.
Speaker 4:I agree.
Speaker 2:I think those are really bad system effects. And that's why I care so much about this open source company problem, because I want software not to consolidate, and I want there to be expanding opportunities for people who can't get those 200 k Microsoft senior developer jobs. And if we want that future, then we, like, really need to solve the, like, why is the open source business problem like, we need to solve that and, like, tell everybody. Otherwise, like, with the future's bad.
Speaker 3:Fuck, yeah. That's
Speaker 2:what I care about.
Speaker 4:Fuck, yeah. I'm a 100% on team Ashley. Like and because I I think I think that's the crux of it. Like, the actual the actual thing about open source and capitalism here is that, like, the open source part we keep talking Brian's point that software is the unique is really, really real. And that unique nature of the software means that there's a unique societal thing that's happened through open source and free software that we've only begun to understand.
Speaker 3:Yes. And Yeah.
Speaker 4:And if and if and if we figure out what it what that uniqueness is, like, what is it about that that allows us to empower other people to change their lives? Like, at Chef's Peak, I had people coming up to me in the street, like, thanking me for writing Chef and for the change that it had on their lives. Most of them weren't chef customers. They were just people who use chef. Right?
Speaker 4:They they like, you know, fed their family because they got a job as a, you know, they they got more they got paid more, like, whatever it was. Like, that they were real people that, like, that that because it was open source, it changed the the arc of who they were. And that's certainly what's happened in my life. And, like,
Speaker 3:I think we have to figure out how to align those things together
Speaker 4:into a theory of what it means to to create open source in a way that at its core cherishes that, that unique aspect of it. And that, that if we don't do that, then we're just gonna be stuck in this cycle of people, like, being, you know, Dave McJanets. Right?
Speaker 3:Yeah. Okay. So and it's not clear if I'm allowed to be on team Ashley because I feel like team Ashley was too. Like, so I can't be picked on team Ashley, but I would like to also join team Ashley. Even the thing you
Speaker 2:said that stuck with me, and I got worried about it.
Speaker 3:Right. So I just to be clear, I I I think that the I I I think, Adam, what you said is really important. I think I would also add to that. It's important to find a way to do it to build truly sustainable businesses, and that that the those businesses may be smaller, but they may be more enduring. And
Speaker 4:I I think that got anything to do with their size.
Speaker 3:Like I think it does it in terms of headcount. I think it definitely does.
Speaker 4:I mean, sure.
Speaker 3:I I I mean, it's like Docker could not support the headcount that it had. It just kinda I mean,
Speaker 4:I mean, we should talk about it.
Speaker 3:Do I think
Speaker 2:This is this is just a a series now?
Speaker 3:They well, fortunately, actually, we've recorded we we, you know, we've been shooting our mouths off for so long. We We actually already have one where we shot our mouths off about Docker.
Speaker 1:On Docker. Yeah. Yeah.
Speaker 3:The but I I think that you you need to I do think you need to kind of figure out how to be how to be sustainable. And the which is not to say I I mean, I I don't think. And I yeah. Adam, you know, you raised a very good point, about the it is our responsibility to find a way to be profitable because, otherwise, we can't do all the other things we wanna do in the world. And that actually that's I I don't know if you know this, but that is very much rhetoric from HP, from the kind of the height of HP, a good HP.
Speaker 3:HP had the same idea. HP was a, at the time, a very good capital g company, but felt that, like, if we our our first responsibility has has to be for the profitability of the business because, otherwise, we perish. We can't do all these things. Narrator's voice, they perish anyway. But the k.
Speaker 2:Wait. I have
Speaker 3:a I feel like this has
Speaker 2:come up a lot, and maybe, again, this is self serving. I have no idea, but I think that there is a response of it, like okay. Yeah. Everyone's gonna talk about communism and get in the chat, but whatever. I think there's a responsibility as, like, leaders and stewards in open like, just saying, like, well, if you wanna have a business, you better figure out how to make it sustainable.
Speaker 2:Like, sure. I just I don't think that's interesting advice.
Speaker 3:It's not.
Speaker 2:I think it's a much more interesting, like, thing to do that could be, like, a much higher impact, like, area to work in, which is, like, as stewards and leaders of this community, like, we all care about open source so much. And we already said part of the way in this conversation that, like, early decisions of people doing open source in general kind of led to some of these side effects. Like, I feel like this is something that OSI should be looking at. I don't know. Like, I feel like there's an opportunity
Speaker 3:to, like,
Speaker 2:larger groups. Like, just saying, like, oh, little business person. Like, you really wanna make money with your
Speaker 4:own business. It.
Speaker 3:We have
Speaker 2:cute. Good luck. Yeah. I will say bigger thing.
Speaker 4:I think you're right. And I OSI will be particularly hard to do that because they are really
Speaker 2:I know. I know.
Speaker 4:I'm penalizing this. I think you're it should be. They and they need to expand. I just wanna you'd mentioned Docker, so I just wanna toss out. Dockers current business model is, like, 95% aligned to Red Hat's.
Speaker 3:For sure, after they've recapped the company. And And And
Speaker 4:yeah. But guess what? Once they decided to charge people money, everybody got real mad about it. Now they're like anecdotally, we don't have any evidence. But let's just say between friends, the rumor mill says that company popped more than a $100,000,000 in ARR.
Speaker 4:And that's also very hard to do, And it happened because suddenly, if you want Docker brand Docker, you gotta fork over your $5 a month. Yeah? And it turns out enough people did, and now they're making a bunch of money. So, you know Happy for them. That's I'm I'm stoked for them.
Speaker 4:It's, like, one of the great open source business turnarounds of all time. And like, like, but we're not talking about it like that. Mostly we talk about it where we're like, there there used to be a free Docker and now it's not, you know? I'm like, no.
Speaker 3:The company was recapped. I mean, a bunch of people lost a ton of money. A lot of investors lost a ton of money. Yeah. We don't care.
Speaker 3:The only ones Nobody should care about
Speaker 4:how investors did. Sure. I mean, but talking about how venture capital did.
Speaker 3:Sure. But there there's a reason that people gonna be, like I mean, it's great that the that that Docker and maybe you could argue that, like, the Docker now is the model that you're talking about, but they need and but with with much less headcount, with much with with a focus on that sustainability. It I I also like the analogy in the chat that it's like this sounds like Theodore Roosevelt era conservation, and, like, we need, like, a national park system for We do. And and I I actually actually really like the idea of, like, the the I think as we look forward, I think foundations played an important role in the last 10 years. I think they're gonna play an even more important role in the next 10.
Speaker 3:I think that'd be
Speaker 2:I think it depends. I I want foundations to like, I guess this is I don't know. This is something I've been chasing for so long, but, like, I really want foundations to be these things that they just like aren't for a lot of reasons. And like the first one would be the idea of taking business advice from almost any of them, because they are not run terribly well. And, I mean, there's a joke about nonprofits there, but the LF on the other hand seems to be a very interesting and very successful business.
Speaker 2:Their 99 is
Speaker 4:suck money.
Speaker 2:Hitting. I would love their money. But, I mean, maybe with this angle, we could we would see a new generation of foundations that have higher operational skills. I don't know. Is that too dark on foundations?
Speaker 2:Am I the only one who thinks it's very,
Speaker 3:like, not impressive generally?
Speaker 4:Yeah. I think I think we're liable to wind up with foundations, don't as a dominant force, and that would be a shame if we don't figure out how to help people be able to build efficient businesses the way Brian describes or in whatever other way they want to build them. If the only way to get spread and and to get, to get paid and all of those things is to go through a foundation, I think I don't think that's not good for open source in general because there's there's a there's a lot of potential goods there that that sort of get left by the by the roadside.
Speaker 3:And I think I don't know. Maybe what's gonna happen is that, like, Ashley and Brian and me and whoever else wants to join the, like, little cabal should just become the, like, open source business model cabal. I they won't I told you, I've taken the cowards way. I started a computer company so I could have this, like, unequivocal open source model that I don't have to worry about, you know, changing license
Speaker 4:Look, man. I tried to take the cowards away and just build a proprietary SaaS company, and then I was, like, this thing really should be open source.
Speaker 3:You know, you buckled. I I unfortunately, it's like it it's really hard to actually, like, give away hardware.
Speaker 4:So I was overwhelmed by my principles.
Speaker 3:That exactly. Well, this has been, this has been great. I think I will let the p 99 folks know that actually you only needed to let us run for another hour and 37 minutes. So I like, I'm not sure why you got the hook prematurely. And I feel like we could go, like, actually quite a bit longer.
Speaker 2:Well, I mean, I think Adam is basically suggesting that we create some sort of informal almost maybe even becomes formal group and just, like, be be the people that we want to exist to help with this problem.
Speaker 3:I mean,
Speaker 4:I I have to
Speaker 2:be careful because I'm very susceptible to that type of call.
Speaker 4:I mean, look, I can say this for sure. Like, after we got off that call, I think I don't remember exactly what the order of operations was, but, like, Ashley pinged me on Discord, and we were like, that was so fun. We should talk some more. And I think Brian was immediately like, that was so fun. We should talk some more.
Speaker 4:And and then we went straight to, like, open source is utilitarian, and that's where all the problems come from. And we were like, yes. And we got, like, very nerdy about sort of the
Speaker 2:talked about the Protestant ethic yet. Anyways, it's We
Speaker 3:didn't talk
Speaker 4:about the Protestant work ethic. There's a whole there's a lot of Will
Speaker 3:we get into more of Calvinism? I would. Yeah. I did so are are certain open source projects preordained into heaven based on their GitHub stars? Is this the Neo Calvinism for open source?
Speaker 4:Yeah. I don't know. And, like, I
Speaker 1:think That is a hot take.
Speaker 4:Yeah. But I think there really is a very legitimate kind of work that needs to get done, and I don't know how or where it happens. That is actually, like, a true an actual study of what these dynamics are because it's all anecdotal. And if you wanna avoid HashiCorpps in the world, you have to turn that anecdotal thing into something that you can at least hang an intellectual hat on. And right now, you really can't.
Speaker 4:Like, it's just vibes versus, you know, spreadsheets.
Speaker 2:It's just vibes. Yes.
Speaker 3:Yeah. Oh my gosh. It's just vibes. It's all vibe. Well, it's been great.
Speaker 3:Thank you both. Thank you all 3 of you for I I I like the, the you know, I I feel Adam Leventhal with 2 Adams here. I I'm kind of channeling my inner John McLaughlin. Did you watch the McLaughlin group? No.
Speaker 3:Issue number 4, open source foundations, Adam Leventhal. No. This is not live. I'm not gonna lose This is when Mike Myers did his Sean Penn's impersonation on Saturday live, it was just, like, deafening silence because no idea no one had any idea who Sean was. Anyway, whatever.
Speaker 3:Shout out to the John McLaughlin impersonation.
Speaker 2:In this episode. There's been a lot of voices. It's been very theatrical.
Speaker 4:I love your McLaughlin group voice, and I knew exactly what you were doing. That was amazing.
Speaker 3:Thank you. You're welcome. Someone else was was drifting through PBS at the wrong hours tonight in 1985. But this has been great. And I it's been really I thank you all for coming back, and picking this up.
Speaker 3:Thank you for those of you in the chat. I know we had a a lot of, good stimulation from the chat. People are already asking for a part 2. I don't know. How many hours would we have to go on before people are, like, never talk about this again?
Speaker 3:Well, how
Speaker 4:many hours does it go on before were just the cabal? And the cabal meets is getting together in Discord.
Speaker 2:We already talked about open source found I mean, this panel alone has shown up for several conversations already over this past year or so.
Speaker 3:Well, alright. Well, then we then then we're just gonna add them. Sorry. We're just not gonna end it. We're just gonna give it this out.
Speaker 3:We're gonna keep the episode open. We're just gonna keep running.
Speaker 1:Hour stream, baby.
Speaker 3:The 24 hours exactly. We'll get started. Oh, I'm gonna go, get a catheter here, and I'm just gonna go to the distance.
Speaker 2:Alright. Alright.
Speaker 3:That I knew I knew I could get there. Yeah. That that's what it took. I would again, thank you all. We we will we're gonna have to do it again at some point.
Speaker 3:Hopefully, no more rug pulls to come, but, there's a a lot of sage sage wisdom. I do love Ashley. I I love, baby communist, Ashley, and I think I wanna get the plush to all of that. So you have to let me know when that's available.
Speaker 4:I want one too.
Speaker 3:Alright. Thank you all and thanks everybody. We'll see you next time.
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