The Value Chain that JBoss was leveraging started out as quite different from existing software vendors but in its quest to increase revenues, the likes of JBoss have started focusing more and more on the typical enterprise customer. In doing so, their value networks are overlapping increasingly with those of existing vendors. By Christensen's Value Chain Evolution (VCE) theory, this makes co-option by existing vendors easier. Larry Ellison talked yesterday about interest in having its own Linux offering and in the recent past considering Novell for an acquistion. These developments show that JBoss in particular and the open-source software companies in general are becoming an increasingly easy target for co-option.
The threat from open-source to large software vendors may be on its path to neturalization. By attempting to go after the same customer base as traditional vendors, the open-source vendors have made themselves more vulnerable.
I am also noticing the same trend with SaaS (Software as a Service) vendors like Salesforce.com They started out attacking the un-served and under-served market by providing a limited functionality easy-to-use tool. In their quest for revenue growth, they are aggresively hiring sales teams slowly turning themselves into just yet another Siebel. Larry Ellison in his FT.com interview correctly pointed out that customers do not care how the SaaS vendors run their software and as these 'true' SaaS vendors try to attack Siebel, SAP and others, their business model & values become similar to those of the large enterprise software vendors. In this space, the large software vendors have an edge and co-option of smaller entities like Salesforce.com and NetSuite becomes a valid strategy.
In summary, the success of SaaS and Open-source and the attention they received from customers and media was predicated on how different they are- in how they build, sell and service their software. As these vendors try to encroach upon the customer base of large software vendors, they run a very high risk of loosing their uniqueness- in value chain and in target markets. Larry Ellison may be right- yet again!
(Disclaimer: The views expressed here are personal and do not represent views of my employer or any other entity mentioned above. To read full disclaimer click on my profile.)