This is the third and last part of my multi-part series exploring “open source in China”. If you missed the two earlier posts, I’d strongly recommend you read them first to build some context. (Part I, Part II)
In this post, I’ll wrap up the exploration with three macro-trends that I believe will drive open source in China for the next five years: the rise of cloud computing platforms, new investments from all corners of the tech community, and geopolitical necessities in the forms of self-reliance and influence abroad.
Rise of the Cloud
Cloud platforms (e.g. AWS, Azure, etc.) have fundamentally changed how open source technologies are being distributed. Frictionless distribution used to be one of the key advantages of open source over its proprietary competitors. That’s no longer the case. You can almost think of the cloud as an app store for open source. Having more open source technologies available on a cloud platform makes that platform more valuable too. The value creation dynamic goes both ways.
With the cloud growing rapidly in China, the same distribution dynamic will take off in a big way. In Q4 of 2019, China has become the second largest cloud market in terms of spend. This growth will lead to more open source projects being created and distributed in both a cloud-native way. Open source creators and developers in China will have “cloud” at the top of their mind.
This distribution vector will not be limited to inside China. Out of the big Chinese tech companies that operate public cloud platforms, most of them have data centers abroad. Alibaba Cloud is the leader of the pack, as I’ve analyzed in a previous article: “Where Are The Data Centers: AWS, Alibaba Cloud, Azure, GCP”. Tencent Cloud also has data centers and colocation facilities around the world. Alibaba is stepping up its cloud investment with an eye-popping $28.2 billion USD investment over the next three years, which I’ve argued in a previous post will lead to data center expansions in Southeast Asia and Latin America plus additional investments inside China. Because open source technologies are borderless by default, ones first created in China are or will be on all the cloud platforms run by American tech giants too.
Of course, the actual distribution will take a few years to play out. It is no trivial engineering work to make an open source project operate well on a cloud, let alone multiple clouds. And the rollout from one cloud Region to another within a given cloud platform also takes time, and depends on business demand and technical resources. That being said, all cloud platforms are converging towards Kuberentes, an open source container orchestration technology, which will drive down the cost of integrating open source projects across different clouds significantly.
New Investments Piling In
As open source grows in China, naturally, more investments of all types will be piling in. The targets of these investments won’t be limited to new and existing commercial open source startups, but also conferences, community meetups, hackathons, and other (stereo)typical open source developer activities. These offline events play an essential role in the ecosystem, and the best way to earn some goodwill among developers is to buy the pizza, beers, and maybe a side of spicy crawfish. I see three sources of investments, each with its own implications:
As I’ve noted in Part I of this exploration, Chinese VCs are shifting their focus towards B2B enterprise startups, as consumer tech opportunities dry up. Commercial open source startups make up a big portion of enterprise tech, because almost all of them innovate in different layers of the infrastructure stack. Two potential problems I see with the influx of VC dollars.
One problem is the lack of notable VC-backed successes in the enterprise space thus far. UCloud’s listing earlier this year on China’s new domestic exchange, STAR, was a modest outcome at best. Kingsoft, the OG of enterprise software in China, was founded in 1988, long before venture capital was a thing. To be fair, many Chinese VCs study the US market intensely to become sharper investors and adapt learnings to their domestic market. But vicarious, second-hand learnings can only take you so far. Until a winner comes along, the effects of piling on more investment will just be mo’ money, mo’ problems.
The other problem is that the new VC entrants to the open source ecosystem all made their money betting on hyper-growth, consumer tech companies. Building B2B enterprise businesses, open source or not, require both more patience and a completely different way of looking at growth, business models, and company building. Further complicating the matter is that certain metrics of open source projects can look deceivingly “consumer-ish”. GitHub stars and the number of forks, clones, and commits are some of the usual culprits. Without a deep understanding of what makes open source successful and what makes commercializing open source work (two separate questions), VCs who are used to the consumer tech way of building startups will lead companies astray.
We may see more aggressive strategic investments from Chinese tech giants into commercial open source startups. Thus far, the only domestic example is Baidu’s modest investment in Gitee. Outside of China, Alibaba has led an investment in MariaDB, the open source fork of MySQL.
While China’s consumer tech ecosystem has been mostly carved out by the tech giants via strategic or controlling investments, most notably Alibaba and Tencent, the same has not occurred in the emerging enterprise space. That’s partly due to the lack of maturity in the space overall. Another reason is resistance from founders, especially of commercial open source startups, who are concerned about the perception (or reality) of platform lock-in, which is smart thinking on their part. As open source technology becomes more reliant on the cloud for distribution, taking a strategic investment from a big tech company that likely also operates its own cloud would hurt the technology’s long-term adoption and commercial potential.
Other Strategic Players
Strategic investments of a different flavor could also come from large enterprises, like banks, insurances, telecoms, and manufacturing. Some possibilities are China Unicom, China Mobile, China Telecom, Ping An Technology (part of Ping An Insurance), China Merchant Bank, and SAIC Motor, all of which are dabbling in open source with either technology adoption or memberships with the Linux Foundation or its subsidiary, the Cloud Native Computing Foundation.
For commercial open source startups, investments from these players may present interesting growth opportunities and technical partnerships, while breaking into some lucrative industries with no platform lock-in concerns. However, there are tradeoffs to every relationship. Because these large enterprises are all heavily regulated by the Chinese government, if and when an investment like this does happen, how that will affect the open source technology’s adoption in and outside of China and its international business potential is an open question.
The interconnections between open source and a country’s geopolitical necessities are as complex as complexity comes. I won’t be able to dive into each rabbit hole in this post, but there are two trends I think people should pay attention to: RISC-V and China Standards 2035.
RISC-V is an open standard Instruction Set Architecture (ISA) for hardware, first originated in the academic confines of UC Berkeley and available via open source licenses. This means anyone can run, change, copy, and distribute it, in accordance with the four freedoms that underpins the worldview of open source. In layman's terms, an ISA is basically the set of instructions needed to build the heart of a computer, i.e. the CPU.
As an open source ISA, RISC-V has massive potential to disrupt and unlodge the incumbency in the chip design industry dominated by the old guards, like Intel and ARM. After the sanctions against Huawei and ZTE during the height of the U.S.-China trade war, it’s no news that China is desperately trying to be less dependent on imported semiconductors, all of which are based on proprietary designs. By embracing and supporting the RISC-V ecosystem and being involved in the community stewarded by the RISC-V Foundation, China may very well accelerate its pace towards self-reliance. China is by no means the only country seeking such self-reliance; India is another major example.
At the moment, few RISC-V silicons are actually being manufactured by the major chip foundries, like the Taiwan Semiconductor Manufacturing Company (TSMC). Most of the big companies embracing RISC-V are using it as a bargaining chip to negotiate better deals with ARM, who still has a stranglehold on the market. RISC-V startups, like SiFive, mostly show traction and progress with design wins. I see Chinese tech companies being the main driver to catalyze RISC-V designs into production-grade silicons at scale in the next five years, due to both business imperatives and geopolitical necessities.
China Standards 2035
China Standards 2035 is a massive policy initiative from the central government to standardize all the specs of emerging technologies, from cloud computing and big data, to AI, VR, and 5G. Most of the standards will be applied domestically, but there is also indication that China would like to export some of those specs to influence how these technologies are standardized internationally. This proactive, some would call aggressive, position is causing some people heartburns. Some of the concerns from businesses and industry leaders are quite reasonable, other concerns from so-called “experts” with an agenda to push are rather shrill and baseless. The policy framework itself has only been in the works for two years. More details are supposed to be announced later this year. Until then, it’s too early to judge either way.
What does this have to do with open source? Most of the technologies being standardized are already dominated by open source solutions. Chinese companies will need to use those solutions just to stay innovative. In the process, more of China’s tech community will have to embrace the open source way of doing things, like transparent governance, open discussions with stakeholders and developers, and fair procedures for rulemaking. Absorbing these elements of open source will not only help China’s standardization efforts domestically, but also help the country become a responsible international shareholder with the integrity needed to be seen as a trustworthy player. Without that trust, any attempt by China to exert influence abroad will be caricatured as unsophisticated aggression by the “new rich”. That perception, justified or not, will not help any technology progress in the right direction.
这种分发向量不限于中国境内。在有自己的公有云平台的中国科技巨头中，大多数都在国外设有数据中心。正如我前一阵子的一篇文章中 “AWS、阿里云、Azure、GCP的数据中心都在哪儿？” 所分析的，阿里云是领头羊。腾讯云在全球也有数据中心和托管设施。阿里正在加大对云的投资，在未来三年内将投2000亿人民币，这一数字令人瞠目结舌。我也曾经分析过，这笔投资的结果很有可能是向东南亚和拉丁美洲扩张，同时继续在中国境内加力。开源技术是无边境的，所以从中国开始的开源技术也已经或在不久将来都出现在所有美国科技巨头的云平台上。
另一个问题是，新加入开源生态的风投许多以前都是投to C项目的。打造一个靠谱的B2B企业科技业务，无论技术是否开源，都需要更多的耐心和完全不同的方式看待增长、商业模式和公司建设。让问题进一步复杂化的是，开源项目的很多指标看似很像to C的产品，有误导性。GitHub的标星和forks、clones和commits的数量是常见的罪魁祸首。如果不深入了解开源成功的缘由和开源商业化的原因的话（两个截然不同的问题），那些习惯于投 to C初创的风投们将会把商业开源初创引向歧途。
RISC-V是一种用于硬件设计的Instruction Set Architecture（ISA）开放标准，最初起源于加州大学伯克利分校的学术领域，可通过开源许可使用。这意味着任何人都可以运行、更改、复制和分发它，吻合开源世界观的四个自由。通俗地说，ISA基本上就是构建计算机核心（即CPU）所需的一组指令。
这和开源有什么关系呢？许多包括在《中国标准2035》需要标准化的技术已经被开源技术的解决方案所主导。中国企业需要采用这些开源方案来保持创新。在此过程中，更多的中国科技界人士将会吸收很多“开源做法”（open source way），比如透明治理方案、与利益相关者和开发群体的公开讨论，以及公平的规则制定程序。吸收这些开源元素，不仅有助于中国在国内的标准化工作，也有助于中国成为一个有责任心的“国际股东”，被视为一个值得信赖的参与者。没有这种信任，中国在海外扩大影响力的任何企图都会被讽刺为“新富阶层”的粗旷鲁莽。无论这种看法是否合理，是否公平，都无助于任何科技和技术的长期正确发展。