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APPLIX + COSOURCE FACE THE OPEN SOURCE MARKET

Applix has been in business for a generation. Its office suite, Applixware, has been a market leader since the '80s. By extreme contrast, Cosource has been in business for less than a year. But it has (along with its competitor SourceXchange) quickly helped establish a whole new market category: the development marketplace where buyers and sellers of open-source code can meet and do business.

Now Applix and Cosource are one: Applix acquired Cosource in December. Linux Journal, which has featured Cosource development news on its web page for much of the past year, was curious about the synergies that brought these two companies together. Doc Searls interviewed Cosource founder (and now Applix executive) Bernie Thompson on January 3, 2000.

Doc: What did Applix see in Cosource? The FAQ seems to say that Cosource is mostly a way to drive Applix development, rather than something for everyone—a marketplace. That's a big conceptual shift.

Bernie: In doing the acquisition, I made sure we would still be able to have say over Cosource and keep it unbiased. So Cosource is and will remain an independent broker of open-source work. Any other path would be self-destructive.

We've been acquired by a great company. Applix—the name means “Applications for UNIX”—is a software company that's been around since 1983. It would like to extend this noble history for another seventeen years. Like most software companies, it has derived much of its revenue from licenses. It saw that, as open source gained market share, the revenue balance would tend to shift away from licenses towards services. Cosource is a web-auction system that encourages open-source work and can thrive in this new environment. By having Cosource in the portfolio, Applix can have a more balanced mix of products and services and be a more healthy company as a result.

For things like seeding the development of open-source applications on our application builder (called SHELF, which we've released under the LGPL), we'll do that right on Cosource.com as a sponsor just like everyone else. If Applix wants to do anything related to their products that requires special logic (which is quite possible—like getting pre-commitments to buy copies of our commercial products), we'll do that by using the Cosource.com logic on another site like Applixware.com, which is specific to our company's products.

Doc: What will happen to Cosource? All kinds of questions come to mind here. In what new directions will you take it? Will you still run it? If not, who?

Bernie: Our goal for this year is to take the cooperative marketplace concept that we—Cosource—helped pioneer to the next level. We've done an okay job so far, but there are a lot of things we want to do better. If you look at our front page, you'll see that we've got a lot of good information there about what feature enhancements are in demand. But we need to do a better job providing customized views of that data. More importantly, we need to enhance our interface to make it easier to express interest in projects and commit money to specific proposals.

From the business perspective, we need to bring more partners into the system, and have them share in the risk and the reward. A site like eBay was able to launch as a largely closed-loop site that doesn't allow for affiliates or competition. It's an island. We doubt that will work anymore. We're looking to do a network approach, where partners like VA Linux, Red Hat and independent Linux consultants can participate side by side and benefit by driving the development of open source.

As far as who's running the show, Cosource.com is still my baby. The great team that built it is still intact. When you create something from scratch, there's always a strong emotional attachment to it. So while I'm responsible for a bunch of other products now, including the Applixware Office Bundle and Applix Anyware (an 800KB Java client to access the office suite running on a server), I'll still be looking over Cosource with the same goals and the same philosophy as before.

Doc: What exactly is your new job with Applix? What are your goals there?

Bernie: My new role is as the President of Applix's Linux Division. Whew! It's quite a challenge, but also a chance to do so much good.

Doc: What kind of changes should we be looking for from Applix over the next year?

Bernie: We're going to be focused on producing great Linux and *BSD applications. Our strength is that our applications were developed on UNIX many years ago. Our focus is on fast, tight, native applications. Toward that end, we're launching our Applixware 5.0 product this spring and summer that uses and integrates with GTK, for closer integration with the Linux desktop. We hope to make it the “most native” of all the office suites, and thus the most comfortable and hassle-free to use. Beyond this one release, it's our intention to keep up and increase the pace of innovation, since that's our primary value to customers.

Doc: Do you plan to open source any of Applix' products?

Bernie: We've already open sourced our application builder platform called SHELF (see http://www.applixware.org/). We've built a complete PalmPilot desktop interface using that tool and released it as open source. And as part of our Applixware 5.0 product, we have developed a graphical interface to the Pine e-mail program which will be released as open source. In each of these cases, we try to use public, well-known licenses such as the LGPL and GPL, rather than custom “Applix” licenses. We're going to be open sourcing more software in the future, as it makes sense. See Eric Raymond's “Magic Cauldron” paper for some guidelines. In particular, we're going to be using more and more open-source infrastructure in our applications—to the extent the licenses allow—and passing our enhancements to these infrastructures back to the community. This is the natural process of community enhancement that licenses like the GPL/LGPL pioneered, and it works great for us.

In short, the goal here is to prove that software product companies can still exist and thrive in this new market that the Internet and open source have created. They'll look different, but we still need them. We need companies that can pay programmers for their hard work and not lose money every quarter. We need companies that can invest large sums in R&D, with the ability to earn back that risky investment by winning customers who license the product. Once that investment has been recouped, we can eventually shift over to an open-source service model.

These companies will be different in that they will be more open with information—not trying to lock customers in—and more focused on empowering the community around the product. Hopefully, this happy balance can be found between the “give it all away” and the “keep the customer in the dark” camps that divide the open-source and traditional software communities today. That's what we're aiming for: we hope to find that middle ground.

We know as well as anybody that the Open Source movement has done only good things for customers. It has demonstrated the amazing power of the community to do great things by working together. It's up to companies to absorb these lessons and learn how to apply them back to serving our own customers better. This is our challenge and mission in the coming year.

—Doc Searls

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