Data Sheet—Thursday, December 17, 2015

Software analysts at Deutsche Bank recently sent around a list of 2016 predictions, and one caught my eye: “Open source keeps eating the world.” Open source is more-or-less free software that developers share with each other for the good of nerdmanity.

Open-source software has been around for years. But the difference now, in the words of the Deutsche Bank seers, is that “there are open source rivals for almost every major infrastructure and data management software market.”

The analysts published an accompanying chart that shows that for every important category of business software produced by the likes of Oracle, VMware, Microsoft, and others there is a corresponding open-source alternative. What’s more, the analysts spoke to corporate chief information officers and reported a newfound willingness to try this newfangled software. “This accelerates the onslaught of price deflation across the entire enterprise software industry, pressuring top-line growth rates as well as margins,” they wrote to clients.

What’s happening here is revolutionary. Even as Amazon, Microsoft, Google and a few others are riding a rocket-ship trend of providing software services on the Internet, programmers are cobbling together industrial-grade programs that big companies are using.

It is a classic strategic inflection point that students of the great, former Intel CEO Andy Grove will understand can make or break not just companies, but industries. For software users and developers, it’s an exciting moment. For incumbent suppliers, it must be terrifying.

***

It somehow escaped my attention until now that Joe Nocera, one of my first mentors at Fortune Magazine, had shifted off The New York Times op-ed page. His farewell column is a gem, as is the first long post-business-column feature I read by Joe, now with the sports section.

Only Joe—who in years past went deep on tech topics like the youthful Steve Jobs and the marathon Microsoft antitrust trial—could write a gripping narrative about a song, “Theme From New York, New York,” and what it means to the New York Yankees and their fans. It’s a credit to the Times that it keeps finding such interesting assignments for Joe.

Adam Lashinsky

@adamlashinsky

adam_lashinsky@fortune.com

BITS AND BYTES

Oracle gains cloud momentum. The strong dollar ate into the software giant's second-quarter profit, according to its earnings report issued Wednesday. Still, revenue for software subscriptions increased by 26%, and co-CEO Safra Catz predicted even faster growth during the Oracle's second half. Separately, former Intel President Renee James has joined the company's board. (Wall Street Journal, Fortune)

Google unhappy with California's self-driving car rules. The first draft of the state's suggested rules for autonomous vehicles require them to have fully operational steering wheels and brake pedals, so a human can take control in emergencies. What's more, you wouldn't actually be able to own one: the state wants manufacturers to lease them to drivers. That could weigh on a rumored plan to spin Google's driverless car initiatives into a separate company next year. (Fortune, Bloomberg)

Huawei plans U.S. smartphone launch. The Chinese networking giant can't sell most of its flagship routers and switches in the United States because of security concerns. But it appears the world's third-largest smartphone company is planning to challenge Samsung and Apple with a U.S. smartphone, which is to be debuted at the upcoming Consumer Electronics Show. (Wall Street Journal)

Pandora catches break with music royalty ruling. The copyright royalty board says Pandora and other free Internet music services must pay higher fees for every 100 songs they play. But the increase was actually smaller then anticipated, which sent its stock higher Wednesday. (Fortune)

Microsoft wants Chinese computer users to buy more Windows. The software giant is linking up with China Electronics Technology Group in a joint venture that will sell and support its latest operating system, Windows 10. While Windows adoption in China is fairly widespread, many copies are pirated. (Wall Street Journal)

eBay offers an alternative to gift returns. The e-commerce giant will set up temporary kiosks in malls managed by Westfield Group after Christmas. The idea is to help consumers ditch unwanted gifts by listing them on its marketplace. (Fortune)

THE DOWNLOAD

Why these big companies are embracing blockchain. IBM, Intel, JP Morgan and several other big banks are among those making big bets on blockchain, the distributed transaction processing engine behind cryptocurrencies such as bitcoin. The companies have joined forces to create the Open Ledger Project with the Linux Foundation, with the goal of re-imagining supply chains, contracts and other ways information about ownership and value are exchanged in a digital economy. (Fortune)