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I’m at OSCON this week. Come say hi and talk Drizzle, Rackspace, cloud, photography, vegan food or brewing.

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A longer version of this story is published at www.opensources.com

Last week, Barnes & Noble announced they would cut the price on their wireless Nook eReader, from $259 to $199 ($149 for a new WiFi-only edition.)  Many thought this was a good opportunity for the third place contender to gain market share.  But within a few hours Amazon beat Barnes & Noble's price by $10, marking down the Kindle 2 to a mere $189.

As the New York Times notes:

The price cuts were made as manufacturers of e-readers faced a mounting threat from Apple’s iPad. Even though it is far more expensive than the e-readers, the iPad, which starts at $500, performs a range of functions with a versatile, colorful display that contrasts sharply with the static, monochrome screen of e-book readers. Apple said it sold more than two million iPads in the two months since the tablet’s introduction... Analysts had expected the prices of e-readers would gradually fall because of the natural decline in component costs and the increased profitability of e-books themselves.

The price cuts should add further momentum to what, despite incursions by the iPad, has been a growing market for dedicated e-reading devices. Amazon and its rivals are on pace to sell 6.6 million e-reading devices this year, up from 3.1 million in 2009, according to Forrester.

If Amazon, Barnes & Noble, Sony et al manage to sell 6 million eReaders this year, that would be impressive growth for a category that has been lackluster to date.  Amazon has never broken out sales of it's Kindle line, but by all appearances it's the leading standalone eReader and likely has sold a couple of million units in its three year history.

In comparison, Apple has sold more than 3 million iPads in its first 80 days. And they're expanding into 9 more countries next month.  Analysts are predicting that the iPad could sell between 5 and 10 million units this year, which blows Amazon's Kindle out of the water.  And unlike Amazon, Apple actually makes money with it's iPad since it's costs are around $260 for the $499 entry level product and margins improve on the higher end units.  

But its worth considering a few questions:

• Will price cuts making any difference competing against the iPad?
• Or does it just increase the burn of a money-losing business?
• Why is Apple's iPad business profitable and Amazon's Kindle isn't?
• If you could chose to be in either business, which would you choose?
• And what does all this have to do with open source?

The key point here is that price is just one part of a disruptive strategy.  No doubt, part of the success of MySQL, Red Hat, jBoss, Alfresco, Zimbra, Pentaho, Revolution Analytics et al, comes from delivering 90% of the benefit for 10% of the price of incumbents. The trick is do to do in a manner that is profitable but that incumbents cannot respond to because of their higher cost of operations.  (And remember, most open source users don't pay anything!)  

Read a longer version of this story at www.opensources.com

• Amazon: Kindle $189
• New York Times: In Price Wars, eReaders go below $200

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Financial services on the go - GlassFish for Fundamo and profit
Alexis recently published a new Adoption Story on how Fundamo uses GlassFish v2 and OpenMQ for its Enterprise Platform. Overview at stories entry, details in questionnaire, and an overview in this earlier short video interview.
We are always interested in more GlassFish adoption stories, both from (non-paying) users and from (paying) customers.   Stories come from all industries and around the world, the last few entries are PSA Peugeot Citroën (France/Auto), iVox (Belgium/Print), NHIH (US/Gov-Health Care) and Suncorp (Australia/Finantial).

OSGi/JMS/MDB Example
Sahoo's latest post describes a hybrid OSGi/JavaEE example that uses JMS and Message Driven Beans and leverages GlassFish v3.  Post includes source code and detailed description.

Siebel CRM Support for the iPad
Oracle shows how to use their server-side REST APIs and the iPad SDK to provide access to Siebel CRM from the iPad.   Devices like the iPad (and the iPhone) seem a very good match for the Oracle Fusion Applications. 

Innovating at Warp-Speed: Monitis Announces Java Monitoring from the Cloud
Monitis announces Java Application Monitoring, a cloud-based monitoring solution for JMX-based applications, including GlassFish containers.  More details in announcement and product page.

EJB 3.1 Asynchronous Session Beans
From Paris, with love... Patrick Champion provides a short example of using EJB 3.1's @Asynchronous annotation.  More benefits of JavaEE 6!

Alfresco community 3.3 installation on Glassfish
A short but detailed description of how to install Alfresco Community 3.3 with GlassFish v2.1 and MySQL.

Getting started with Glassfish V3 and SSL
The JavaDude provides a tutorial on how to use GlassFish v3 with SSL.

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Oracle managed to score a major victory last week at the MySQL Conference by announcing performance gains of 200-360% in the forthcoming version 5.5.  This is a tremendous improvement and comes in part due to closer collaboration between what were historically two distinct (and occasionally competitive) groups: the InnoBase team and the MySQL Server team.  Bringing the InnoBase team under the direction of the MySQL Server team under Tomas Ullin is a great benefit not only to MySQL developers, but also for MySQL users.  No doubt these performance gains are a result of many months of hard work by not only Tomas, but also a good number of folks on both teams including guys like Mikael Ronstrum, Kojstja, Calvin Sun and others.  

Reaction to the new release has been positive in the community from the likes of Jeremy Zawodny, Don MacAaskill and others. Zawodny provides more detail on his blog:

    It seems that in the MySQL 5.5.4 release, several performance bottlenecks that really affected scalability beyond 4 cores have been either eliminated or seriously mitigated. Some of the changes were in MySQL itself, while others are InnoDB specific...

    The benchmarks presented that compared MySQL 5.5.4 with 5.1 show substantial improvements in a variety of workloads. And given how many shops are still running MySQL 5.0.xx in production (including us), that means there really is A LOT to look forward too–especially on newer hardware.

    I, for one, cannot wait to see what this stuff does for us.Thanks to the MySQL and InnoDB teams for their continued hard work and dedication to making MySQL faster as hardware evolves.

For those who have been skeptical, these results should go a long way towards demonstrating Oracle's commitment to ongoing investment and improvement of MySQL.  Who knows, maybe this will help eliminate some of the rhetoric and FUD from the splinter groups in the MySQL community.  And of course, Oracle will need to continue to ramp up investment in other areas of MySQL to make good on their promises.  But they're off to a better start than anyone could have expected.

I've included some video excerpts from keynote presentations by Oracle VP Edward Screven and from Open Source maven Tim O'Reilly below.

• MySQL: Introduction to MySQL 5.5, Downloads

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Topics for this podcast:

*The latest in VC funding for open source
*VMware’s SpringSource buys cloud messenger Rabbit
*Open source monitoring vendors’ key cloud partnershps
*Oracle moves ahead, back on MySQL, OpenSolaris

iTunes or direct download (25:38, 7MB)

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Adrian has talked about a few of us Drizzle Hackers joining Rackspace over at the Rackspace Cloud Blog.

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It is a pleasure to announce that Kontrollbase – the MySQL analytics and performance monitoring webapp for MySQL servers – has a new sponsor. Network Redux is located in Portland, Oregon and offers enterprise quality dedicated and managed hosting as well as cloud services. Thomas Brenneke contacted me to discuss his interest in utilizing the [...]
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Oracle, after dating HP, Dell, Netapp and EMC has found its mate in Sun. Oracle is now becoming a systems company, and unceremoniously dumping these former paramours. These leaves the spurned lovers to find alternate accommodations, especially in the area of the database.

As I have stated previously on this blog, the clear partner of choice on the Windows front is Microsoft. This is demonstrated by today’s partner announcement around MS SQL Server for OLTP. But who is their partner in the Linux segment?

The following are contenders:
* Postgres (HP rolls their own)
* EnterpriseDB (pre-rolled Postgres)
* Ingres or Sybase—Oracle has felled them both in the past, but they are hoping for new life with a big sugar daddy like HP.
* ScaleDB, If HP is going after the cloud and the MySQL market

I don’t see them going for a NoSQL solution because NoSQL = NoEnterprise, making it a non-starter for HP. One way or the other, HP needs a solution for OLTP on Linux and they are on the clock.

For OLAP, HP has NeoView. If they felt the need, there are a number of OLAP solutions out there such a Greenplum, Netizza, Asterdata, Paraccel, Ingres/Vectorwise and others. That said, I think HP feels that they are holding a good hand on in the OLAP space, but Linux-based OLTP just became a gaping hole in their product suite. Today's partnership with Microsoft confirms this problem, but only solves the Windows half not the Linux half.
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Regular visitors to the 451 CAOS Theory blog will be well aware of The 451 Group’s CAOS (Commercial Adoption of Open Source) research service and our CAOS long-form reports.

They are probably less aware of the open source coverage that The 451 Group provides on a day-to-day and week-to-week basis, however, and I thought it would be worthwhile to provide some examples of The 451 Group’s ongoing open source coverage by highlighting a few recent reports.

The company’s core services are 451 Market Insight Service, which delivers daily insight into emerging enterprise IT markets, and 451 TechDealmaker, a forward-looking weekly analysis service focused on M&A activity within the enterprise IT business.

Here’s some examples of how our coverage fits in to those two services. Needless to say, these reports are only available to clients, although you can apply for trial access. Vendors - open source or otherwise - do not have to be clients in order to be covered by our analysts.

451 Market Insight Service
The 451’s CAOS analysts - Jay and I - are responsible for much of the coverage of open source specialist vendors. Recent examples include:

• Novell lessens Linux push for Intelligent Workload Management strategy

• OpenLogic offers code scanning and compliance, community Linux support

• DotNetNuke rides the explosion of open source on .NET for app development, WCM

Meanwhile The 451 Group’s team of analysts also cover open source related vendors in their respective coverage areas, often in conjunction with CAOS analysts. For example:

• Google’s online channel for smartphones changes little in terms of market dynamics

• JasperSoft eyes the enterprise with latest commercial open source BI suite

• xTuple’s open source ERP attracts more manufacturers, strikes chord with distributors

• Gluster targets virtualization, unstructured data with new clustered storage platform

• eZ Systems gears up for growth with new funding and new CEO

Additionally, we also provide reports assessing the strategies of proprietary/mixed source vendors towards open source. Examples include:

• JetBrains has an open-source IDEA that could expand its profile

• Day Software aims to become the patron saint of open source Web content management

• Microsoft’s new position reflects changing attitude toward open source

• Putting Oracle’s open source moves in perspective

• SAP is learning to give and take with open source

In addition to our vendor-centric MIS output, open source also regularly makes an appearance in our reports assessing wider industry trends. For example:

• Open source users voice concerns over Oracle’s acquisition of MySQL

• ‘Vendor wars’ push challenges, opportunity to HPC and its enterprise outlook

• Unpaid community Linux serving as foundation for provider and private clouds

• Open source and cloud computing – a match made in heaven?
  

451 TechDealmaker
451 Group analysts follow open source-related M&A in their coverage areas, again often working with the CAOS analsyst. Examples include:

• VMware grows cloud stack, sends message with Zimbra buy

• Terracotta acquires Quartz, adding job scheduling to Java-caching lineup

• Pentaho snags LucidEra assets in bid to give analytics mainstream appeal

While we also provide reports assessing the prospects of potential acquirers and targets alike. For example:

• EC concerns over Oracle-Sun deal center on MySQL

• Will Red Hat have to buy to meet aggressive growth targets?

• Further acquisitions could boost Novell’s Linux business, indirectly

And again, open source makes an appearance in our reports assessing wider industry trends. For example:

• Could an open source project survive a hostile acquisition?

• How will recent moves by Intel and Google shake up the embedded OS space?

• Opportunities for open source M&A in 2009

• Will code scanning and analysis get large vendors shopping?

For those with an interest in M&A it is also worth mentioning is 451 M&A KnowledgeBase – the company’s merger and acquisition database, which contains details of all M&A deals tracked by The 451 Group, and offers the ability to filter search results to contain deals that are themed “open source”.

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Larry Ellison makes it very clear that Oracle believes in a back to the future model where software and hardware meld together into “systems”, purpose-built, integrated solutions. In other words you won’t buy an Oracle database and a server and configure it to run a data warehouse, instead you’ll buy the “Oracle Data Warehouse Server.” The first such system is Exadata, which is apparently doing quite well, according to Ellison.

This is a classic bundling, although some may call it a tying strategy. Microsoft, seeing that they couldn’t win each office productivity segment individually—including word processing, spreadsheet and presentations—decided to play to their strength and bundle them into a solution that no individual company could compete with. This is bundling. The tying strategy is where Microsoft used their dominance in the operating system to tie the browser to the OS, thereby owning the browser market. In the case of Oracle, one could make a case either bundling or tying. I’m making neither a value, nor a legal judgment about Oracle’s strategy; I am just providing historical context.

Ellison points to Cisco and IBM, under T.J. Watson Jr., as examples of successful systems companies. But my question is simple: Will this back to the future strategy work against the cloud? Assembling solutions with pre-packaged systems is certainly easier than starting with more granular components like hardware and software. But does it really stack up against today’s benchmark, the cloud.

Let me use a transportation analogy:

Assembling all of the components (hardware, software, etc.): Like building a car piece by piece

Assembling systems (a la Oracle's Exadata and Cisco): Like building a car by installing large grain items, the chassis, wheels, engine, etc.

Using the cloud: Like buying a pre-built car off the lot

SaaS Applications: Like riding the subway

Most people are perfectly happy either buying a car or riding the subway. For really high-end performance, some may want to build their own car with components or by hand, but it’s a relatively small market.

I don’t expect any public cloud offerings to satisfy high-end enterprise demands…yet. But I have to admit, the cloud is evolving quite rapidly. Just look at Amazon and their introduction of Virtual Private Clouds, Elastic Block Services (a SAN in the sky), Boot from EBS, etc. I can launch an entire cluster with a mouse-click, without talking to IT. How can you beat that? Historical precedence is also on the side of commodity technologies, like the cloud, growing up to cannibalize the high-end. The PC cannibalized the workstation, which cannibalized the mini, which cannibalized the mainframe. From the clou's perspective, the trend is their friend.

The cloud won’t seriously threaten large enterprise systems for quite some time, but I believe it is just a matter of time. Oracle can certainly ride a strong wave of current demand for systems. I expect that in time they will also provide a compelling suite of solutions in the cloud. But if I were a bettin’ man I’d have to bet on the cloud; they have simplicity and history on their side. On the other hand, it is hard to bet against Ellison.
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