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How far can you stretch an open-source business model until it breaks?

Welcome to Protocol | Enterprise, your comprehensive roundup of everything you need to know about the week in cloud and enterprise software. This Thursday: why Elastic revoked access to a key software-development tool, Salesforce the media company, and Facebook built a time machine.
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It's hard to imagine enterprise software over the last decade without open-source software and the companies that brought those ideas to life. It's also getting harder to see how pure open-source software companies will play the same role over the next decade of enterprise software.
Elastic took a bold position on the future of open source. Founded in 2012 around the Elasticsearch open-source project and now worth almost $14 billion, it has been one of the more prominent companies to shift its open-source strategy in the face of what it believes is unfair competition from cloud providers, namely AWS. Last month, the company raised the stakes in its ongoing dispute with AWS by making life harder for anyone not using its commercial software.
Elastic also shut down any discussion of the matter on that GitHub thread over the weekend, although it was a hot topic on Hacker News earlier this week.
Backing away from the open-source community raises questions (again) about the future of open-source software business models in the cloud era. Does it still make sense to launch (or fund) a company around an open-source project?
The primary business model right now for companies that grew around open source but are rethinking their approach is the "open core" philosophy. The thinking is that the main code is open and available to anyone, but adopters have to pay to use code that unlocks special features, as well as for support.
Decisions like Elastic's send a strong signal to both developers and users that contributions made under different terms only served as a vehicle to make someone else rich. Yet there are no easy answers here.
There are still ways to build a business around open-source software that can drive revenue while remaining true to the spirit of the open-source philosophy. Companies that plan to sell professional services or distributions of open-source software that are easier for customers to implement are just one example.
— Tom Krazit
Singapore is fast becoming a global hotbed of tech innovation. It's easy to see why. Nearly 80 of the world's top 100 tech firms have set up outposts there, including Google, Facebook, Stripe, Salesforce and homegrown unicorns like the super-app Grab.
Salesforce and bill: You might not see Salesforce+ popping up as a new option on your smart TV, but Salesforce has found a new home for the hours of content-marketing video it produces every year. Protocol's Joe Williams broke down why Salesforce thinks the world needs an enterprise version of Netflix.
Vaxxes in Texas: HPE was one of several tech companies to declare itself done with California last year, relocating its headquarters to Houston. Protocol's Allison Levitsky reported this week that its decision to mandate COVID-19 vaccines for its Texas workforce could face some backlash from state officials.
What was your first tech job?
Believe it or not, working on Benchling was my first job in technology. I previously worked in academic labs and in biotech, but found the tools for collaboration sorely lacking. My background is in computer science, so I started to work on the software that I'd want if I were in the lab. The opportunity to help scientists bring breakthroughs to the world faster was too compelling to pass up, and the rest is history.
What's your favorite pastime that doesn't involve a screen?
I enjoy reading biographies, sci-fi and business history. Currently, I'm reading "The Code Breaker," which is Walter Isaacson's book about Jennifer Doudna and the discovery of CRISPR.
How can enterprise tech improve its current status around diversity, equity and inclusion?
We all play an important role in improving diversity, equity and inclusion and should always be evaluating ways we can improve, but we are happy with the direction we've been moving in and the progress we've made.
Recruiting is a great place to start. Many organizations end up with interview processes that rely too heavily on network connections and unstructured interview processes that inevitably introduce bias. Fixing this by defining structured interviews and investing in dedicated sourcing is a great first step. Expanding tech's geographic aperture is also critical — there's great talent everywhere.
Which enterprise tech legend motivates you the most?
Lately, I've been learning from Spenser Skates and Jack Altman, who run Amplitude Analytics and Lattice, respectively. Both are building category-defining businesses in competitive markets, which I find inspiring. I've also been learning a lot from Salesforce. They are one of the few large companies that has the pace and energy of a high-growth startup and has maintained customer focus. They're doing something special when it comes to developing leadership and you can tell by the success of their executive talent at other organizations.
What will be the greatest challenge for enterprise tech over the coming decade?
There are going to be diminishing returns on horizontal software. I believe the opportunities in enterprise tech will look more purpose-built, industry-specific and require interdisciplinary teams to bring to market.
Business leaders say they choose Singapore for its modern tech infrastructure, strong government support, robust pipeline of talent and pro-business regulations (the World Bank ranks it No. 2 in the world for ease of doing business). Plus, its location in the heart of Southeast Asia serves as a launchpad into the bustling Asian-Pacific market.
Thanks for reading — see you Monday!
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