Open Source XenServer? ESXi to Follow?

Citrix has recently joined the Linux Foundation, and there is a report (which they seem to have endorsed) that they plan to open source XenServer.  That’s not Xen, it’s XenServer – not the kernel, the product, the thing you stick on your server instead of ESXi, or sometimes vSphere.

It’s exactly 2 years since Citrix acquired XenSource.  Some say it cost $500M, which is almost true.  In fact Citrix told the NASDAQ that the consideration was approximately $328.5 million, comprised of stock valued at $232.3 million, $92.5 million in cash, and transaction expenses of $3.7Million.  It’s not clear exactly what XenSource’s revenues were, but it is clear that XenServer was expected to have a material impact on 2008 and later year revenues.

Of course, that isn’t happening now, because XenServer is FREE.  Citrix now justifies the acquisition because it takes $300M off VMware’s revenues.  That’s odd.  Imagine Ford justifying its unhappy ownership of Jaguar as a strategy to split  up and/or bankrupt DaimlerChrysler. It might have been the outcome, but it certainly wasn’t the objective.  If XenSource’s Investment Bankers had walked into Citrix’s office with a pitch: “Buy this company for $320M – It’ll cost you a ton of money which you’ll never get back, but hey,  it’ll cost VMware a ton too”, they’d have been laughed out of Fort Lauderdale.  No, perhaps the key here is that the Investment Bankers didn’t have to come in at all, the companies management already knew each other well. It’s all in the 10K form at the NASDAQ as, to be fair, are all the risks of the acquisition.

We’re not bashing Citrix here, in many ways they have executed this sequence well.  They have always played the layer above the base O/S.  It never made sense for them to drive their business around something that sat below an O/S. They are sticking the knife into VMware at a perfect time before VMware’s VDI becomes a threat, and  helping out their old pal Microsoft. Microsoft could never give a way a standalone hypervisor at least not  if they didn’t want the  EU and the DOJ to break them up.

OK, Citrix maybe can’t make money on it – that’s old news, but why Open Source?

The difference is in the detail of the Licence. Commercial licecnes are often prepare by the vendor’s individual lawyers based on industry practice but with specific clauses which relate to the vendors’  business.  Open Source licences can also be prepared this way (in fact there are hundreds of such licences), but there are nine standard Open Source licences which are in common use. These are typically more permissive than a standard commercial licence (e.g. there is no ban on use in nuclear facilities or aircraft as there is with Java) ,  except in one area – the licence under which “derived works” must be distributed.  The Open Source licences differ here. Xen is licensed under Gnu Public Licence (GPL), which is infectious. The GPL allows anyone to create a derivative work of the GPL code and redistribute it, as long as the resulting source code is also made available at redistribution time, and as long as the resulting source code is licensed under the terms of the GPL.

At this point it is worth noting who can enforce the GPL – in law it is the owner of the copyright that is being infringed, in other words either the person or the employer of the person that wrote the code, or a third party to which that copyright has been assigned.

Since most end-users never distribute software, the GPL redistribution condition is not material.  In both cases it says $0.00 at the bottom of the invoice.  In both cases you will need some kind of support contract from someone, and in both cases you may choose to add Citrix Essentials, or some other Citrix product, or not.

There is one other potential concern for end-users regarding Patent or other Intellectual Property (IP) Infringement.  In a standard commercial licence the vendor will usually indemnify the user against claims that it is infringing third-party IP by using the software (subject to the user helping the vendor defend against such claims).  In the case of GPL software this isn’t possible because the vendor can’t be held responsible for IP infringements of other GPL contributors in the combined work it is distributing.  In practice, there has never been a successful  action against an end-user for patent infringement, and the issue has really gone away since a company known as SCO ran out of arguments and money a few years ago. The problem is no greater or no less if the software is GPL. For reputation reasons,  Citrix will likely still defend the action on behalf of it’s customers and/or take steps in the code base to remedy the problem.

In terms of the community,  ecosystem,  partners or whatever you want to call them there are clear benefits to moving to GPL.  Part of the Citrix/Microsoft play against VMware is about openness. ESXi is free, but if you are a partner and you want to add value to it, there is a clause in VMware‘s Licence which prohibits the users from doing something VMware thinks is bypassing the limitations it has put onto its free product. GPL licences don’t allow these restrictions.  Partners can build whatever they want to interface to a GPL product and even build derived works to sell or distribute themselves.  In terms of Citrix’s strategy of hurting VMware, all this is to the good.

Citrix’s strategy of engaging with Linux is interesting in terms of Red Hat’s position.  They currently dominate the Linux space to the extent that they don’t really need to engage with the Linux foundation. At this stage we suspect Red Hat’s KVM in the Kernel is a done deal.   There won’t be two hypervisors in there, but there may be some things that would make XenServer work better.  Xen is also at the heart of Citrix’s client virtualization strategy and maybe there is some leverage at the Linux Foundation over this.

And it may also be about cutting their losses.  Citrix are dreaming of a day when they’ve killed of VMware and everything is virtualized on Hyper-V or (if necessary) on Linux, and the bulk of the Linux is Red Hat/KVM. If they kick XenServer into the open source, and set up a foundation around it (like AOL did with the Netscape code base and the Mozilla Foundation in 2004), it will sink or swim on its own accord and at least no-one will blame Citrix for it’s demise.  There are a few other people who currently arguably care more about about Xen than Citrix does:  SuSe, Oracle/Sun, and Amazon.  Maybe one of these companies would pick up some more of the development work.  The rest of the ex-XenSource developers can head off to Microsoft to maintain Hyper-V.

But there’s something nagging at the back of my brain here.  It goes back to this concept of a “derivative work” under the GPL.  You may or may not have noticed these days that when you buy a router for your home or small office,  you usually get a copy of the GPL in the box.  The entire router software stack is GPL as a result of a single lawsuit waged by the Software Freedom Law Center against Verizon on behalf of some of the original IP contributors to BusyBox, a kind-of micro command shell that people (including Verizon and also Cisco) put onto routers.  Basically, the infectiousness of the GPL code in BusyBox means that any embedded router that uses it has to be fully GPL.

It is entirely possible that Citrix’s lawyers have noticed that XenServer was so infected with GPL code that it was already Open Source anyway.

Now, those of you who know the backdoor to ESXi will know that when you log in you are presented with a BusyBox console, and if the Software Freedom Law Center has a go at VMware (just like they did Verizon)  VMware may be forced to follow suit with an Open Source ESXi. That would be a story.