Matt Asay introduces Open Source Business Conference

When Matt Asay — who once studied law under Lawrence Lessig — joined Novell two years ago, his job was to recruit developers to work on Netware. Today, his “day job” is acting as director of Novell’s Linux Business Office and Open Source Review Board. But Matt has also been part of the open source community the past five years. This week, the fruits of his unofficial labor are paying off in the form of a new open source conference to be held March 16 and 17 at the Westin St. Francis hotel in San Francisco. It’s called the Open Source Business Conference.

The renowned legal scholar Lawrence Lessig will give a keynote entitled “The Creators’ Dilemma: Open Source, Open Society, Open Innovation.” Other keynoters include Chris Stone, the driving force behind Novell’s acquisition of SUSE Linux; Scott Handy, IBM’s VP for Worldwide Linux Strategy and Market Development; and HP’s VP for Linux, Martin Fink. Another renowned legal scholar, Eben Moglen, a professor at Columbia Law School and General Counsel for the Free Software Foundation, was originally slated to speak, but has had to withdraw for personal reasons.

NewsForge had the opportunity to speak with Asay prior to the conference. When asked to explain why he had created the OSBC, he explained that he had never found an open source conference which focused on the key issue of “How do you make money from this stuff?” It is a question that has befuddled many businesses and entrepreneurs for years: how to “do good” by sharing code and make money at the same time.

Asay first tried to gain support for the conference internally at Novell. He had just returned from the Linux World Conference & Expo and was struck by the fact that the question was not addressed head-on. When he received a “lukewarm” reception at Novell, he got on the phone. After 30 seconds with Daniel Fry at IBM, he had the first OSBC Platinum Sponsor. But it was rough going from there, Asay said. Probably 30 percent of the show’s sponsors rejected the invitation at first, then rethought their position as the show gained critical mass. Those who initially declined but then reversed themselves changed their positions from “Can’t afford another conference this year” to “Can’t afford not to be at this one.”

About those models

I asked Asay if the model Michael Tiemann used at Cygnus, and brought with him to Red Hat, is still the best way to make money on open source. He replied, “It is doubtful to me that they even would have been able to get to this point — that they wouldn’t have gone out of business years ago — had it not been for the window that they went out on their IPO. If they had not been in that manic time, been able to IPO and make a lot of money to put in the bank so that they could tweak their model, I am not sure that we would have Red Hat today.” He added, “I’m not sure that that model is THE RIGHT ONE, in all capital letters. I think it’s a good one, but there are very few companies that can … build a maintainable business around services.

“I think that even more promising going forward are companies, that — like MySQL, like Gluecode — are doing interesting things with licensing. It is almost getting to the point where the license is a benefit to them. They are fine, they are actually thriving, because there is an open source license at the core of their business. But it’s not their whole business, they are not forced to do services. They — in some cases — mix some commercially licensed — otherwise known as closed source — software, or they find some way to provide some — this is the wrong word — proprietary value to their offering. Gluecode, with their managed source, is a great example of this. But I’m betting that most people in the industry have never heard of Gluecode, or if they have they have certainly never heard of their managed source model.

“I’m betting that most people don’t really understand the dual license model, and how these guys are making money. Why do they have two licenses? It’s a big question mark. So the conference is one forum, and I think really the first forum, to really flesh out what models are working, why they are working, what models aren’t working, why they aren’t working, and kind of give — hopefully, collectively — the attendee-base a collective and individual ‘Aha! moment’ as they think through these issues.”

While the open source community per se may not be tied up in knots over the problem of making money with open source, the businesses and investors being drawn to the community like moths to a flame are keenly interested in the problem. NewsForge will be reporting from the conference this week.