 Thank you, and good morning. It's always good to be back in Japan. I've been coming to Japan for many many years almost Most of my adult life actually I went to Sofia University when I was in college and I've been coming to Japan at least a couple times a year for The last five years That's a joke. I really didn't graduate from college five years ago. I'm much older 20 years. Let's try that but you know, I'm really happy to be here this year because this year has been a tremendous year for open source and today I want to talk to you about The new changes that are going on in the technology industry not not just an open source but what's going on in the tech sector in general and how open source fits in to that trend and Hopefully you'll learn some things hopefully I can Show you some new exciting open source projects to look at and hopefully you can bring that information Back to your organization and help your organization use open source to be successful in business You know today, we're going through a disruptive cycle in IT Every ten years or so the IT industry reinvents itself We went from the mainframe to Unix from Unix to the PC the internet and then the internet to mobile And we're in the midst of a big disruptive period right now The IT sector is changing and redefining itself and I think Meg Whitman here Just this October said it well when she described the change that's going on right now People who organizations who used to work together are becoming competitors. I think Meg was referring to the relationship between HP and Microsoft They used to work together HP is the largest seller of PCs in the world. They largely sold Windows machines And now Microsoft is building their own tablets. They just bought a mobile phone company. There's big disruption happening there We've all seen the huge changes in consumer electronics and the mobile industry that are really disrupting technology, but it's not just in the PC industry and it's not just in consumer electronics Where we're seeing huge disruption the impact of cloud computing is Not only disruptive, but this year it's it's becoming real This year it really is changing business it's really Disrupting in terms of some companies are becoming very successful and other companies are under a lot of pressure and frankly not doing well the best example of this I like to refer to the Bottom statistic there to demonstrate just how big an impact cloud computing is having this year This is from a financial analyst firm that stated for every dollar spent on Amazon web services Three to four dollars of traditional IT spending Purchasing servers and hardware buying software setting up your own data center Three to four dollars of traditional IT disappears For every dollar spent on Amazon web services three to four dollars is not spent on traditional IT Now how big is that? Well this year See even the even the shipping industry understands how disruptive this is But the to give you an idea how big this is Amazon web services is forecast to do four billion dollars in revenue this year If you use that math, that's a 12 billion dollar Loss for firms that were in traditional IT and we're seeing it right Traditional Unix businesses the server industry is having trouble this year the PC industry is having trouble this year it's a huge disruption and The best example of just how large this is is when you look at the scale of This disruption Organizations aren't just buying servers by the rack. They don't just buy, you know, 10 racks of servers They buy it by the acre They buy it by the square mile in huge data centers with tens of thousands of servers in other words The IT industry is moving towards a services economy That benefits very very large scale that you see at Google and Amazon and Facebook and Most of that is being built entirely on open source software In fact, the only large-scale public cloud service provider that is not using open source software is the Microsoft Azure Cloud And I think that will Microsoft will still have a good offering there the dot-net community is very very large But it's increasingly becoming small and Increasingly services are built on open source Just one example of sort of large-scale service computing and how it relates to open source is Twitter Twitter went public this summer They had a multi-billion dollar IPO. It was the hottest technology IPO of this summer in the United States All of the software that Twitter uses to run Twitter.com is open source They give all of that infrastructure software away. You can actually go and get The source code off of github almost everything they use to run Twitter is open source Because the value that Twitter creates is from its content and its customers And they would rather share in the development of the code that runs Twitter itself In enterprise computing we've really seen open source now Push the traditional proprietary Unix business aside These numbers I think say a lot it really Traditional enterprise computing is starting to become a two-horse race where you have windows growing at about 3% You have Linux growing in double-digit numbers year over year and Unix is declining That's a minus. Sorry that the slide it should say minus twenty four point one percent year over year Unix is basically phasing out and Linux and in some cases windows is being used New development models are also favoring open source More and more enterprises are choosing HTML5 and web based development models and This makes a lot of sense right web based development models are much easier to deploy secure Maintain than traditional client server, right? It's easier to centrally management it it scales much better and IDC forecasts that by 2015 Most mobile applications will be based on HTML5 IDC is predicting similar growth in web based applications being deployed in the enterprise again because of ease of management security and so forth and In a web centric world the operating system matters less and when the operating system doesn't matter much Obviously the free operating system usually wins And it's not just in enterprise, but the automotive industry is moving towards open source Our automotive grade Linux initiative has companies like Toyota Honda Nissan all building their future Informatic systems on open source Super computing is now almost entirely open source with over 95% market share Embedded systems has now essentially consolidated on open source Now over 50% of the embedded systems marketplace is on Linux in one form or another The mobile computing industry the smartphone industry is now dominated by open source 1.5 million Linux based smartphones are sold every single day and The majority share in the mobile market is based on Linux and open source What all this means is Smart competitive companies are getting rid of the burden of commodity research and development in particular at the infrastructure layer the Linux kernel Software-defined networking controllers All of the plumbing that runs the underlying infrastructure that runs enterprise IT People are collaborating and building that collectively Rather than companies developing it individually and then licensing it for sale to another Organization, I mean just just this year. There have been so many projects that have seen hundreds of millions of dollars of investment whether it's open stack or projects like Zen puppet chef I mean, there's just literally in every underlying infrastructure component in Modern IT in particular those that are being used in Cloud computing and in a service-centric model. It's all being done via open source So one thing I thought I would share is what are some projects to watch in 2014? I Think we've all heard of sort of the major, you know, Linux and You know eclipse and Apache and my sequel all the kind of core open source projects But what are some of the new ones to watch and I wanted to give you a flavor of ones that you should watch that I think are Going to transform enterprise IT just like Linux did 10 15 years ago One to watch is open daylight. Now. This is a Linux foundation project We started it last April in software-defined networking In Japan NEC is one of the leaders in that project In fact, Japanese companies tend to be leaders in software-defined networking period in particular with NEC Open daylight is scheduled to release their core controller In a few weeks There'll be a second release in June and what you're going to start seeing is a production Ready version of a software-defined networking controller that can be plugged into things like open stack and cloud stack That did not exist in open source before In addition, if those of you in the audience are working at a service provider like NTT Open daylight is now expanding into network function virtualization Network function virtualization is going to move load balancers and fire walls from on-premise to a service provider's premise Resulting in billions of dollars of disruption in the networking space Open daylight is scheduled to release a network function virtualization project again Just the next couple of months Another project that the Linux foundation announced today in the United States is all seen All seen is an open source project. This one is very new because it's actually new as of today This is a project that is designed to connect the Internet of everything Both consumer electronics and industrial control and automation Some of the world's largest companies a couple from Japan Panasonic Sharp But also companies from the US Qualcomm Cisco Sears LG and more Are coming together to create an open source stack that allows Industrial controls medical devices consumer electronics to discover each other exchange their capabilities via API's and interact with each other so that your phone can talk to your television so that your Oven can communicate with your refrigerator All of these things will be connected regardless of manufacturer and Regardless of the industry segment. This just got announced today You should go check this out particularly if you're in industrial controls or automation or consumer electronics Other projects to watch cloud computing in 2014 with open source is going to start to really scale Open stack cloud stack eucalyptus these projects are going to overcome Some of the early scaling problems that they've had and we're going to start seeing those in extremely large commercial deployments one thing I would tell you to watch within the Cloud computing projects are some of the tools that are being used inside of projects like open stack They have these wonderful testing and regression tools within open stack that I'll actually you can they're designed to help the open stack community Accelerate their development, but you can actually use those same tools in your enterprise to accelerate your software development So go test or go check out some of these testing Frameworks that are being built in each of these projects Other projects to watch in 2014 Zen and KVM So the Linux virtualization segment is going to take off in 2014 VMware has largely dominated virtualization for the past several years and what we're now seeing is Zen and KVM really starting to be deployed in competition with VMware in a big big way The biggest advantage of course with Zen and KVM is that they're free But the ecosystem now with both KVM and Zen have caught up with VMware where it's broadly supported with a very large ecosystem of partners Hadoop is another project to watch in 2014 Look for more uses and applications in big data Big data has been a big promise for a long time But we have not seen a lot of actual use cases and applications for big data outside of some very very niche segments in 2014 you're going to see many more applications being deployed to take advantage of big data Most importantly, you're going to see a much larger commercial ecosystem around Hadoop Cloudera and Fortin works are on schedule to go public in 2014 This will inject a lot more capital into the big data marketplace Many large vendors are embracing Hadoop and using it in their products and services including companies like IBM companies here in Japan So Hadoop is a project to watch in 2014 Lastly, I think no sequel is going to be big in 2014 MongoDB data stacks these type of no sequel implementations are Starting to overcome some of the scalability problems that they have had in the database world more importantly companies like MongoDB and others are Creating a very large commercial ecosystem around No sequel and I think this is again another thing to watch in the database world another open source to disrupt their in 2014 and The thing that I want to sort of summarize all of this with is to say that there's a new Network effect at work here that you need to pay attention to in enterprise IT Enterprise IT is changing because of a new network effect, which is the OS evolution is Really declining and almost over the days of sort of the Windows API Being the most important thing in enterprise IT is is rapidly ending I think there still will be a community of dot-net programmers, but really I think it becomes less and less over time There's a new network effect that matters and it particularly matters in a world where Enterprise IT is driven by a services model, which is broad hardware Enablement really matters more When you're computing at huge huge scale You have problems with power and cooling You need to support different Architectures you need to be flexible in how you configure your data center And so what that means is the new network effects means you have to support more Architectures more device drivers you have to be able to be flexible in Supporting new types of storage technology as it comes to the market And that's where open source and Linux have really gathered a huge network effect because of Android Linux now supports every arm system on a chip MIPS more more hardware architectures than any open source project in the history of computing More device drivers more storage everything and that's the network effect that really matters It matters both in enterprise IT when you're building a data center But it also matters in consumer electronics if you're going to build a new phone You can automatically find almost any chip You can get almost any screen almost any memory because all of it is already supported by Linux There's no other operating system that has the breadth of Innovation at that layer that Linux has what's really happening is that is commodity research and development that everyone is sharing and all the innovation happens above at the application and service layer and Below at the hardware chip layer So who are the new winners in this new era of IT disruption? Well most analysts agree that there are going to be two big winners broadly Now I think there's going to be other winners, but in general just speaking very broadly There are two big ones One is service providers are likely to be big winners in this new period of IT disruption It's the Amazon Web Services It's a network service provider that can virtualize hardware and offer it as a service It's a salesforce.com It's a Twitter. It's it's these organizations that offer IT as a service That are growing faster than any other part of the IT industry and the second winner is really open source and They're connected because to enable large service providers You really need open source software at its core every single cloud computing Infrastructure out there running on Linux and open source It's free. You don't have to pay a license You can modify it to optimize it for a large large scale Most of Amazon's infrastructure for Amazon Web Services is built on Linux with Zen Which they've heavily modified and optimized to produce better results at very very large scale it's this transition to this model to a Sort of collaborative model of the underlying Infrastructure that runs these services. These are the big winners in the new IT economy So is everything good? In this world for open source Well, no, there still are some challenges that I'd like to share with you today Not everything is great for open source. Although for me I because I run the Linux foundation I usually like to tell everyone that everything is good about open source, but for this audience today I'll tell you some things that are not so good for open source right now First of all, we need more lawyers It's true. I see some people laughing. No, it's really true We need more lawyers now. We don't actually need more lawyers numerically Japan has the best example of you you have far less lawyers than the US and I think it works good But what I mean when I say we need more lawyers is we need more lawyers who understand open source So tomorrow The Linux foundation is hosting a meeting in Japan to help educate Lawyers and business people here about how to take advantage of open source We need more lawyers who understand that open source Is just another business process That with open source you can share what you want to share and you can keep what you want to keep Open source is not a cancer. Just because you use open source does not mean you have to give away all your intellectual property It's actually a fairly straightforward Thing to understand if you have the right legal department who can help you understand how to share what you want and To keep what you want to keep and so the Linux foundation is going to train As many lawyers as we can to understand this new form of collaborative development The second thing and I think this is obvious is we need more developers How many organizations in the audience are trying to hire? software developers right now few of you so There is a huge talent war for developers going on right now. There simply are not enough developers to scale during this period where Hardware functionality things that used to be delivered as hardware whether it's servers or network appliances routers load balances those are all being abstracted virtualized into software and We need more software developers to create those products and services that are software driven and what's going on is Developers are becoming very expensive and valuable in fact in 2010 in the United States There was an antitrust Complaint brought by the US Department of Justice against six of the largest technology companies in the US Those companies had gotten together and decided that they were not going to hire each other's developers They weren't going to take talent from one another in other words Software developers Talent in this engineers in this economy are so valuable these companies are willing to risk breaking the law In order to get them If your organization is not focused on getting top talent right now You really need to change your strategy And the best place to get that top talent are in open-source projects Because another aspect of the global talent war is the fact that the best Developers are the ones who know how to work with people outside of their own organization as Things get more complex as everything is connected as more and more functionality is abstracted into software Companies cannot do all of this work by themselves. In fact, Deloitte Touche published a report this year talking about the open talent economy that by 2020 Any good company who's making anything worthwhile Half of the people used to make those products and services will work outside of your own company If you don't know how to collaborate on the fundamental Infrastructure that you use to create your products and services. You are not going to be competitive in the global economy So the Linux Foundation is Seeking to grow Linux talent as quickly as we can Next year you're going to see more training courses being offered for open-source talent across a variety of projects from the Linux Foundation We're going to offer them here in Japan the United States Europe to try and grow this overall talent pool of talented software Developers who know how to work and collaborate across Many many companies and open-source projects So those are a couple of the challenges And the question is can we meet those challenges? well, you know about about 13 years ago in Japan faced a similar challenge in Linux in terms of building a talent pool in terms of joining open-source projects such as Linux and With leadership from people like mr. Kanai here in the audience from Fujitsu NEC Hitachi We trained we spent years training Japanese developers how to be better Linux developers how to collaborate within the Linux community and Contributions grew from zero to I think now 10% of the Linux kernel project We face a similar challenge today Not in Linux, but in all of the other open-source projects that are out there software-defined networking big data network function virtualization the internet of everything Japan and the Linux foundation can work together to train the talent that your Organizations are going to depend on to compete in this period of IT disruption And so together We look forward to working with all of you to solve those challenges. Thank you very much