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October 9, 2008 7:37 AM PDT

Who cares about open source?

by Matt Asay
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A hugely significant issue for open source was revealed at Red Hat's recent analyst day. As suggested by Red Hat CEO Jim Whitehurst, and as captured by ComputerWorld, open source may still be the province of early-adopter geeks:

Red Hat does well with "companies that use technology for competitive advantage," mainstream companies that don't care about being on the leading edge of technology adoption are still largely an untapped market for the vendor. Red Hat has a high market share among companies that focus on technology to drive their businesses, such as financial services companies and major movie studios. However, this is just a small part of the enterprise IT market....

Looking around at my own customers, it is certainly true that we have many customers (Governments, universities, manufacturing companies, etc.) for whom technology is an afterthought, not a competitive advantage. So there are a range of companies that don't fit this description enjoying the benefits of open source.

But it is also absolutely the case that of my customers and other enterprises with whom I speak, those that derive the most value from open source today are those for whom technology is a significant means to the end of competitive advantage. I suspect that the market will take the lessons and technology learned from these early adopters and apply it to mainstream markets, but it's very possible that the companies that benefit from this mainstreaming of open source won't be the same ones that brought open source to the early adopters.

Consider Google. It derives enormous benefit from open source, but it doesn't sell open source. It "sells" search, easy content collaboration, etc. The same holds true for Cisco and other companies that derive significant value from open source, but don't make much noise about it in their marketing materials.

Perhaps to be successful long-term Red Hat and other open-source companies will need to fixate less on the inherent advantages of open source (Better code, more flexibility, etc.) and focus more on the inherent value of their products (which just so happen to include open source)? The answer, most likely, is to do both: more education as to why open source matters, but also more concentration on making the product speak for itself so that open source doesn't have to.

Thoughts?

Matt Asay brings a decade of in-the-trenches open-source business and legal experience to The Open Road, with an emphasis on emerging open-source business strategies and opportunities. Matt is vice president of business development at Alfresco, a company that develops open-source software for content management. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure. You can follow Matt on Twitter @mjasay.
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by jrepenning October 9, 2008 9:56 AM PDT
Maybe it's like Coke and Pepsi: sure, there are a few people who actually care, but most such choices are actually "whatever my hand falls on," or "yeah, yeah, waitress, whichever you've got." Yet the companies quite rightly battle mightily to shift that "who cares" market share fractional points, because they're fractions of such BIG points.
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by modplanman October 9, 2008 9:57 AM PDT
Very much true. I'm starting to wander if you've actually read the books on disruption, considering you've mentioned it before, yet seem to not know many of its lessons.

One key lesson being that the technology on its own is never a driver of anything. It's what is demanded of it, and whether it fits said demand that counts. Focus on what open source can bring to them, rather than what apparently makes open source awesome on its own.
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About The Open Road

Matt Asay brings a decade of in-the-trenches open-source business and legal experience to the Open Road, with an emphasis on emerging open-source business strategies and opportunities. Matt is general manager of the Americas division and vice president of business development at Alfresco, a company that develops open-source software for content management. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure.

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