After all, he spent 10 years at Microsoft and knows how the company thinks and operates. He learned a great deal about business strategy from his former boss, Bill Gates. He also knows that his company has a big target on its back and that Microsoft is zeroing in on it, gaining share in key markets they cohabit.
Now, he's suddenly Robin Hood with a merry band of open sourcers who will save the shire from the omnivorous Microsoft. Well, not quite. Glaser is trying to outflank Microsoft by hooking up with the open source community, but it's not clear to me that the open source community is fully prepared to join forces with RealNetworks yet.
Glaser and team propose to create a robust ecosystem built around an open-source version of RealNetworks' streaming media technology, Helix. The media distribution platform supports multiple audio and video file formats, including those developed for Microsoft's Windows Media platform.
On the surface, Glaser's strategy makes a great deal of sense, in terms of creating a standard, universal platform for distributing any media format to any device. Let the vendors, including RealNetworks, differentiate on implementation, service, support and other elements and take advantage of the proven collaborative community development effort.
And rather than continue to wage a head-to-head battle and end up debilitated like Netscape, take a lesson from how the Linux world has galvanized and gained credibility in the market at Microsoft's expense. Granted it is small in terms of dollars and market share, but it is a trend at the beginning of its lifecycle and one that has serious momentum. For example, the United Kingdom will consider open source software, such as Linux, in bids to avoid getting locked in to proprietary products such as those offered by Microsoft.
As you would expect, RealNetworks has lined up many of the usual suspects -- who are driving Linux into business and government -- to support its own efforts to create a de facto standard platform. Among the supporters are Red Hat, Sun, Oracle and Hewlett-Packard.
Beneath the surface, however, RealNetworks' strategy is conflicted. Granted, the company is contributing around $100 million of research and development and millions of lines of code as well as patents to the cause, according to Glaser. But creating a genuine open source or community movement like Linux or Java requires more than throwing some code and patents across the chasm.
The company is holding back core technology, such as the proprietary codecs that contribute to the quality of the user experience. Given that RealNetworks needs to maintain unique differentiation for the infrastructure and server software it sells to business and government --and wants to protect its intellectual property -- holding back elements of the formula makes sense from a business perspective, but also engenders an open source less pure than Linux.
I spoke with Bruce Perens, a leader in the free-software movement and co-founder of the Open Source Initiative, who characterized RealNetworks' proposal as -have your cake and eat it too." On one hand, Perens said, RealNetworks wants to take advantage of the collaborative engineering community, and on the other it has to grow its revenue based on use of the software.
Rob Glaser described the new model as a layer cake, similar to the way IBM's WebSphere is built on top of Java. The comparison to Sun's Java is good conceptually, based on a community source model, which works well for partners. But Sun also has a hardware business that subsidizes the software development.
If RealNetworks is to follow that model, it will have to find a way to provide the open source community with what they need to be supportive of and grow the platform, and at the same time take as much market share and licensing revenue as possible.
When I asked Glaser about the challenge of enabling more competitors via the open source strategy, he was confident that his company could run faster and deliver more compelling, differentiated products. And, he left the door open to bringing more of RealNetworks' core technology into the open source domain.
He also spoke about elevating the debate to create standards industry wide to fuel the next phase of growth. Now, he needs to figure out how to generate that growth without catching the wrath of the open source community, customers, or shareholders.
Can RealNetworks have its cake and eat it too? Tell us through Talk Back!
