Six Apart currently faces two main issues with Movable Type. The first is loss of market share. It faces competition on two fronts – from other blogging software that can be installed by customers, and online web-based services for blogging that compete directly with TypePad (which runs on Movable Type). The second issue is the shrinking of its Movable Type developer community. This has led to perceived stagnation of development in Movable Type, and a loss of competitive advantage in technology and functionality.
Movable Type, is proprietarily licensed as shared-source using either a no cost personal, non-commercial license, or a paid commercial license for organizations and commercial uses. In either case, users have access to the code and can make modifications to the copy they are using but do not have the right to distribute any of these modifications. This is clearly non-open source as defined by the Open Source Initiative. Is it time for Six Apart to open source Movable Type to compete more effectively and to regain the stature it once had as the clear leader of the industry?
The blogging community has close ties with the open source community. Indeed, many bloggers are also open source advocates. Movable Type’s top-down growth strategy has estrangered them from their roots. By making Movable Type open source, will it not encourage use and adoption of Movable Type through word-of-mouth and viral marketing through bloggers and developers? Open sourcing of the software will also recover valuable brand equity for Six Apart, much of it lost in 2004 through outrage in the community over their botched introduction of commercial pricing.
Open sourcing Movable Type will also lower the cost of maintaining the TypePad service, allowing Six Apart to compete more aggressively with Automattic that runs the WordPress.com blogging service. Unlike Six Apart, Automattic is based completely on open-source. They do not charge for WordPress software but instead receive revenue by providing support and services to enterprise customers through a service called Automattic Support Network. They also charge for non-personal or commercial use of the Akismet spam protection service, which has the advantage of being the only existing service that uses a centralized database system to control comment spam.
In contrast, Six Apart was not built with an open-source business model in mind, receiving its revenues mainly through software licenses. Although it will have to transition its customers to open-source service and support revenue models, I do not expect revenues to be hit negatively as customers that pay for Movable Type today are likely to be willing to continue paying the same amounts for the similar levels of service. We are talking about customers that obviously value managed services and support above installing and maintaining their own copies of open source software, something they could already have done by switching to WordPress, for example.
However, this does not mean that Movable Type should just become another WordPress. Alternative MPL licensing could be a source of competitive advantage and differentiation vis-à-vis GPL licensed competitors like WordPress at this point in time when blogging is starting to shift from being a consumer application to one used by enterprises. The MPL has been shown to be friendlier than the GPL to systems integrators that intend to offer commercial solutions that build on the functionality of the open source package.
Movable Type’s strategy of monetizing their system early, compared to WordPress who was playing catch-up, has worked well financially so far. However, the loss of market share, loyalty and mindshare amongst key customers has been an expensive price to pay, and continuing on the current trajectory may be unsustainable. Enterprise acceptance and understanding of open source has also progressed over the past few years.
The release of Movable Type as open source at this opportune time will secure Six Apart’s ability to remain a serious contender in the blogging marketplace by providing a credible alternative to the leading open source solution WordPress; benefiting customers, system integrators, and developers through expanding the choices that they have in making purchase and integration decisions.
Six Apart investors will have to be convinced that the prevalence of open source alternatives available, especially the now dominant WordPress, means that any underlying asset sale value of the Movable Type code has already been disrupted and the best way of monetizing the code for the future is to focus on building a service infrastructure around it that is of value, as is the case with successful open source companies.
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