Hewlett-Packard is returning to a software market where it suffered one of its worst defeats. But this time, the company has open-source software as its ally.
The company is expected to announce on Friday that it has expanded its relationship with open-source software company JBoss to provide support for corporate customers that run JBoss' software on HP hardware. JBoss' application server software is used to build and run Java business applications.
The tighter partnership will mean large corporate customers can get round-the-clock support only from HP. Until now, people dealt with HP for simpler problems involving configuration and installation but went to JBoss programmers to address software defects. HP is able to provide a deeper level of support because it has access to the JBoss software source code, said Martin Fink, Linux vice-president at HP.
Earlier this year, HP launched a professional services offering around a set of open-source components, including the Linux operating system, JBoss and the MySQL database. HP now has about 300 employees in presales and consulting trained on this open-source "stack" and about 20 customers who have gone through initial pilot projects, Fink said.
HP's move to ratchet up its commitment to open-source middleware marks something of a return to a business the company was forced to abandon two years ago. HP spent $470m in 2000 to acquire Bluestone Software, a small maker of Java application server software that brought HP into closer competition with market leaders IBM and BEA Systems.
But after failing to make significant gains in the multibillion-dollar market, HP decided to pull the plug on the division. Instead, it chose to focus on its OpenView management software business and its Utility Data Centre software. HP discontinued Utility Data Centre, which aims to automatically manage computing resources efficiently, earlier this year.
Since dropping Bluestone, HP has forged a close alliance with BEA and has trained its consulting corps on BEA's WebLogic software running on HP's different hardware servers.
Fink said HP's decision to focus on providing services around open-source products echoes the company's sentiment that application servers have become a commodity, a belief that caused it to drop its Bluestone line two years ago.
HP is specifically targeting IBM customers looking for an alternative to Big Blue's WebSphere Java server software line and its DB2 database products. IBM has invested millions of dollars in open source and in August created an Apache open-source project around a specialised Java database. But it still maintains a comprehensive line of proprietary software, such as its WebSphere suite and DB2.
HP's Fink said that despite IBM's commitment to some open-source projects, the company is still protecting its proprietary businesses from cheaper open-source alternatives. He added that HP's customers are showing an "astonishing" amount of interest in open-source infrastructure software.
"IBM supports open source when it's Linux, but as soon as you leave Linux, it gets squishy," said Fink. "Let's go all the way up the stack."
The combination of HP and JBoss has the potential to pose a serious competitive threat to market leaders IBM and BEA, said Pierre Fricke, an analyst who follows the application server market for research company D.H. Brown.
Though still not widely deployed, open-source alternatives are starting to take root, particularly with developers. Oracle and Sun Microsystems are also aggressively pushing their respective Java server software suites.
"If [HP and JBoss] can build an ecosystem around JBoss -- with ISV [independent software vendor] support and a good go-to-market strategy -- then they could become a significant player and they'll be talked about on the same page as IBM and BEA," Fricke said.
The most significant difference between HP's Bluestone business and JBoss is that the open-source business model makes it much simpler for a company like HP to enter the market for related services, Fricke said. He also noted that unlike Bluestone software, JBoss is widely used with Java developers -- an important factor in driving product adoption and sales.
HP's arrangements with JBoss and MySQL are not exclusive. The company is already investigating other open-source products that perform essentially the same tasks as the JBoss software, including the Jonas and Geronimo Java application servers and other open-source databases such as Computer Associates' Ingres, Fink said.
The push into open-source-related service could potentially put a strain on HP's existing relationships with BEA and Oracle. HP provides consulting services to customers that have chose BEA's Web application server and Oracle database to run on HP hardware.
"BEA and Oracle are aware of what we're doing," Fink said. "Time will tell who will deploy commercial versus open-source stacks."
In its latest attack on the middleware marketplace, HP won't be selling any software licences. Instead, it will sell support and installation services around open source.
Though tiny in size compared with industry giants such as IBM and Oracle, JBoss and MySQL are seeing rapid growth in their businesses, which depend on services revenue. Two start-ups, called SourceLabs and SpikeSource, are also developing subscription-based support services around a certified bundle of open-source components.
"It's an annuity business, and there's almost no better business to be in," Fink said. "Once you have the people set up for support, you can scale it and amortise your investment over a larger base of customers."
