Why Netflix May Fail

I’ve been a fan of Netflix for years now, but I’m thinking that they are moving down the wrong path.

I just cancelled my subscription after several years due to the second price increase in six months for Blu-ray access.

The justification they give is that Blu-ray disks cost more, but I think the reasoning is that people with HD televisions and Blu-ray players are probably a little more affluent than average, and Netflix would like to exploit that fact. Blockbuster has a similar plan to the one I had with Netflix with no Blu-ray surcharge as well as free in-store exchanges.

In addition, the Netflix representative made no attempt to retain me as a customer. We watch one, maybe two movies a month, so I assume I’m one of the people Netflix loves to have as a customer (versus those people who watch 2-3 movies a week). If you do the math, those high volume customers barely cover the cost of postage, whereas I’m almost pure margin. That didn’t appear to matter.

Netflix has one of the best designed websites out there (Blockbuster pales in comparison), as well as a very responsive delivery system, but as soon as they stop focusing on their customers is when they start to fail.

OSBC, Portland and Walt Disney

Apparently I’ve missed another Open Source Business Conference. I should go to these things, if only for the humor factor, but since it doesn’t really fit into our mission statement of “Help Customers – Have Fun – Make Money” I skip it.

I did see a couple of trends come out of the blogosphere around the show. The first was that it seems that people are still trying to fit open source into traditional commercial software models.

I saw this on Matt Aslett’s Twitter feed from the conference:

RT @markdevisser: @jHammond states the Bazaar evolves to a Guild and then to a Shopping Mall, which attracts customers so vendors can thrive.

It sounds cute but on thinking about it, it started to piss me off. Who do you think comes to bazaars if not customers? I spent a day at the souk in Damascus and it was a more pleasant, crowded and exciting experience than any shopping mall I’ve ever seen. Why must software be put into little shrink-wrapped packages and sold on a shelf?


The implied statement is that the bazaar isn’t good enough and that open source somehow needs to be “fixed”. While I think that we have a long way to go in educating the market, we don’t have to fall back into the comfortable commercial software business models to do it.

My favorite posts were people claiming that so-and-so CEO of such-and-such company doesn’t care if software is open source or not, so “open source” doesn’t matter in the marketplace. These are usually the same people who work for companies that have the phrase “open source” plastered all over their web pages, press releases and marketing materials, along with information on their latest commercial software offering. If open source doesn’t matter then why do they use it to market their products? Seems a little hypocritical to me.

The last trend was a renewed call for a billion dollar open source company. Of course these people mean an open source “software” company, but I would consider both Google and Amazon to be billion dollar open source companies. Considering the mess that huge companies who were “too big to fail” have gotten us in to, I wouldn’t be so quick to claim big is better. The argument that big companies will only do business with other big companies, while containing a nugget of truth, fails in the long run. First off, a lot of big companies do business with OpenNMS, and we’re rather small. Second, I often tell potential clients that if you are not improving your operations by using open source, your competitors are, even if it means dealing with smaller companies.

So instead of going to the OBSC and choking on my own bile (grin) I decided to do something infinitely more fun: visit New Edge Networks. They are in Vancouver, Washington, across the river from Portland, Oregon, which is one of my favorite places.

New Edge (an Earthlink company) is a provider of bandwidth and networking services. They have been quite successful supplying private networks at a fraction of the cost a company would pay to do it on their own, and to back those networks with a high level of customer service. They use OpenNMS to monitor and collect performance data and to integrate that information with their internal customer portal (at this writing we are collecting well over a million data points every five minutes). They’ve been a customer for almost five years now.

They are very eager for the provisioning enhancements coming in OpenNMS 1.8 with provisiond, as this will give them a fine, granular control over what gets monitored, how it gets monitored as well as making adds/changes and deletes seamless. This meeting was to start the migration process from their current installation to the new version some time this summer.

I get to see a lot of companies, and the vibe I get at New Edge is that it is a great place to work. Their work environment dovetails nicely with our mission statement, since it is much easier to help customers if you are having fun doing it, and happy customers are more willing if not eager to pay for your services.

Speaking of money, I sometimes feel that I come across as if money isn’t important to me. That’s not true, but money isn’t the most important thing. I run a business, not a charity. This week on Daring Fireball I was reminded of a quote by Walt Disney:

We don’t make movies to make money, we make money to make more movies.

That sums up how I feel about OpenNMS. We have chosen a business plan that lets us continue on and to grow year after year, always making “more OpenNMS”. This means that we will always be chipping away at the commercial software offerings in our space, making it much harder for them to charge their huge license fees. Plus, we have fun doing it. It actually becomes easier year after year for us to increase revenue, until eventually we’ll have a company worth hundreds of millions of dollars.

But if we were to shift our focus away from our mission and on to just making money, we’d soon be out of business. I believe our customers know that our first priority is them, and that is the key to a winning business strategy.

I don’t need no conference to tell me that.

Eric S. Raymond Speaks Heresy

I came across this link today about a talk esr gave to a users group in which he proposed that the open source community ditch licenses like the GPL.

While I understand his reasoning, there are a couple of flaws with it.

When I used to study economics, the models seemed pretty straightforward, but they were based on “perfect” market knowledge, easy entry and exit, and the idea that people act rationally. As I’ve talked about before, people quite often act irrationally. The software market does, in most cases, provide easy entry and exit (with some notable exceptions such as operating systems), but market knowledge is often hard to come by.

With a commodity like corn, it doesn’t really matter if the corn comes from Iowa or Nebraska – corn is corn. But what about cars? Is a Lexus the same as a Mercedes? How about a Hyundai?

The same issue exists in software. Is Tivoli better than OpenView? How can one objectively compare them? Often the comparison comes down to price – with the higher priced software considered “better”. One reason that Micromuse was so successful was that their software was priced higher than anything comparable on the market (at the time) and people just thought it must be better. It’s a problem we run into with OpenNMS – many people in decision making positions don’t think that “free” can be good.

Where I think esr misses the point is that the GPL guarantees a certain level of market knowledge. Without it, someone could take a project like OpenNMS, slap a prettier GUI on it and turn around and sell it as a commercial product. The potential buyer wouldn’t have to be told that there was an open source alternative, and thus the market wouldn’t “punish” the closed source version.

The GPL not only prevents that but provides for severe penalties if the license is violated. Any revenues from such commercial software sold in violation of the license could be forfeit.

To me the GPL is like locks on cars. They don’t keep a determined thief out, but they help keep honest people honest. It is a commitment to keeping the work of the community truly open. Until the software market can be better educated on the value of open source software, it can’t operate efficiently to punish the closed alternatives, so the GPL and similar licenses are the best things we have to insure that the value created by open source communities is protected.

Rental Car FAIL

While does Thrifty think I need to carry around two huge remote/key things for the car? In case I lose one? It might help if I could actually separate ’em, but as it is if I lose one I lose them both.


Note: This is one of my “travel” posts with little OpenNMS content.

After the successful Users Conference in Frankfurt, I decided to take a few days to visit a friend of mine in Dresden. Although the weather did not cooperate, I had a great time.

I took a Lufthansa flight from Frankfurt to Dresden, and after one of the craziest landings I’ve ever experienced (the pilot took that 737 on basically a slalom course before landing, hard, on the runway – I swear that at one point the wings were vertical) I met my friend and we took the train into the city.

The first stop was lunch and where I got to experience the German take on the döner kebab. It was fantastic (I liked it so much that I had it for lunch the next day). After lunch we took a walking tour through the city while trying to ignore the light drizzle.

In one section of town the buildings were decorated to reflect different natural elements: water, sun, earth.

Right on the river Elbe are a number of impressive buildings, including the Dom (the Hofkirche) and the Church of Our Lady (the Frauenkirche).

The latter was basically destroyed in the bombing of Dresden during World War II (I will now always remember the dates 13-15 February, 1945) but it was rebuilt in 2004.

One of the original crosses was on display where one can see how the heat from the fire melted part of it.

I got a picture of me with the Golden Reiter, a golden statue of Augustus II the Strong.

While the statue is incredibly bright and shiny, there are only about 300 grams of gold used in the coating. Augustus was also king of Poland, so the statue faces toward that country. His body was buried in Poland but his heart remains in Dresden (in the Hofkirche).

There is a common misconception that the stance of the horse in equestrian statues illustrates how the rider died (both front legs up – died in battle, one leg up – died from wounds sustained in battle, all legs down – died at peace). While the Golden Rider has both legs up in the air, Augustus died of complications from diabetes.

Speaking of Augustus, he liked to fashion himself as an eastern version of Louis XIV and so collected a number of treasures. Many of these are on display in a gallery called The Grünes Gewölbe. Each room in the gallery is dedicated to a different type of art: from things made of amber and ivory to items of silver and gold. The most impressive pieces were the jewels and jeweled artwork. Definitely an exhibit not to miss.

Another thing I was delighted to see: the pedestrian crossing lights, or Ampelmännchen. On my first trip to England many years ago I stayed with Jonathan Sartin and his son had a odd pair of toys: a red figure with his arms outstretched and a green figure that was walking. He told me that these were “East German” crossing signals. I had totally forgotten about them until I saw them in Dresden. There is something about them that captures the imagination.

Apparently there are different versions as well. I saw the Ampelfrau as well as the Ampelmann and a bicycle. One thing I didn’t see was much else to remind me that Dresden was once part of the Soviet Union.

I was only in Dresden for a couple of days, but already I would like to go back. It is rather close to both Berlin and Prague, so perhaps I’ll be able to visit those places as well, using Dresden as a base of operations.

My only wish is that next time the sun will come out.

2009 OpenNMS Users Conference Europe

Sorry for the delay in posting this. Right after the conference I took a two day trip to Dresden, and no sooner had a landed back in the US I was off to DC. Just not enough hours in the day.

I was extremely pleased with the Users Conference, and it seemed that people who attended got a lot out of it. We had between 40-50 people in total from over 10 countries.

Friday afternoon I went down to the hotel lobby and the OpenNMS folk started gathering together. We chatted until about 7pm when the Nethinks people showed up and we went off to a restaurant for dinner and beer.

Since I had to speak for several hours the next day I left early, but after 10pm the party moved to another area of the restaurant and went on for awhile.

The conference was in three hotel “ballrooms”. The first hosted the coffee while the other two were used for presentations. Once I managed to get my Mac to talk with the projector, things went smoothly.

My first talk was an overview of OpenNMS coupled with four case studies, each focusing on a specific functional area: data collection, service monitoring, remote monitoring and events. After a short break I talked about the features coming in version 1.8. I think both talks were well received.

After a fabulous lunch buffet in the hotel restaurant, the afternoon session began. Alex and Antonio had both forgotten the cable needed to connect their MacBooks to the projector, so they ran off to buy one. We moved Jonathan’s presentation on the Trouble Ticket API and Ronny’s Reporting Enhancements talk up a slot to cover for them, and they were back in time to do the Syslog and Mapping talks, respectively. The day ended with Jason’s Enhancement Talk and Jeff’s Asterisks lecture.

It was cool that there seemed to be roughly an even number of attendees in each session, so we seemed to have scheduled that well.

All the slides are available on the web site, and I believe that the video from the conference will be made available soon. I’ll post when they are.

None of this would have been possible without the work of Alex Finger and Uwe Bergmann. I believe that Nethinks will make a great partner for OpenNMS in Germany. Also, special recognition should go to Simona Bott for doing all of the heavy lifting in making this things possible.

On one final note, my friends from the Netherlands bought me stroopwafles.


"Let's go exploring"

When I travel, especially to other countries, I tend to want to experience the place in a greater sense than most tourists. For example, I’ve been to London a number of times, but still haven’t managed to do many of the typical touristy things, such as ride the London Eye or watch the changing of the guard. But I have visited some historic pubs and wandered around the grounds at the Greenwich Observatory.

This seems to be in stark contrast to some Americans. Since I travel a lot on American Airlines I sometimes get upgraded to first class. Once I struck up a conversation with the guy next to me on a flight from Los Angeles to Dallas. From what he told me, he appeared to be very wealthy, but in that kind of aloof way of the nouveau riche (the wealthiest people I ever met were some multi-billionaires who were rather down to earth and lived somewhat modestly for their means, although even modestly their means were well above mine). I mentioned France, specifically this small town called Menthonnex-en-Bornes, that I enjoyed visiting in the Alps, and he countered that the only place worth visiting was near Versailles. He always stayed at this hotel where you could look out on the countryside, see goats, etc., but they had a special elevator down to the spa so you “never had to leave the hotel”.

Never leave the hotel? Then why bother. I’m sure there are some good spas in Dallas where you don’t have to leave the hotel either. You could probably go there and save some money (and the French a bit of grief).

Personally, I really enjoy getting out amongst “the natives” and trying very hard to disabuse the notion that Americans are loud and rude (not sure if I succeed at either but I do try). Unfortunately, on this trip to Germany I have been pretty much hotel bound.

The hotel is pretty funky, and comfortable

but for some reason my immunity to jet-lag isn’t working. I haven’t been able to sleep well, and I needed to finish up my presentations for the OpenNMS Conference happening this weekend so I’ve been in front of the laptop most of the day.

I did manage one small adventure. Last year I decided to start collecting Harley-Davidson T-shirts on my travels. It gives me a goal and since most dealerships are outside of tourist areas, I get to experience a little of the local flavor.

Frankfurt is no different. After figuring out how the subway system worked (Frankfurt is a little confusing, especially at the Frankfurt Hauptbahnhof which is a large station with both proper trains and subways) I road to the edge of town and then walked about a kilometer to the Frankfurt “Harley-Davidson Factory“.

It was pretty large, larger than many of the dealerships I know of in the US. They even had a display of antique bikes. I bought a shirt (“Made in the USA” – rare for textiles these days) and headed back to the hotel.

I also got to pat myself on the back for my growing understanding of the German language. For example, the German word for “zoo” is … “zoo”.

But there are some things that need no translation