Everyone needs open-source distribution in a down economy
Open source rules in a bad economy, but perhaps not always for the reasons suggested.
Forget source code for a minute, and put development aside. One of the biggest assets that open source provides is a low-cost distribution model. In a bad economy, you want your software to find budgets still filled with cash, rather than spending money to chase money, and nine times out of 10 coming up empty.
Proprietary-but-free (as in cost) is one way to mimic the open-source model, but it's not nearly as effective, if for no other reason than it still requires prospective customers to come to your Web site to find the good. Open source, however, has several well-known repositories: Sourceforge, Google Code, Code Haus, etc. If I'm a company that is looking for low-cost software, I'm going to sourgeforge.net before I look at sap.com.
So, a question: why aren't proprietary software companies doing more of this, whether by creating new open-source projects that mesh with their proprietary products, or by acquiring open-source companies or investing in existing open-source projects? IBM has done it with Gluecode ("Websphere Light"), but it's the anomaly. Why not use open-source projects - commercial or otherwise - as on-ramps to "premium" proprietary products? This is a well-worn path for IBM, but why don't others use it?
Many open-source companies use commercial extensions to actually drive revenue, so it's not as if the business model is foreign to the would-be buyers of the Pentahos of the world. It's a way of seeding the market, however they may choose to reap.
The cost can be zero: you don't have to acquire an open-source company to participate. You just need to either create your own open-source project or invest in an existing one, most likely with an Apache-style license that would enable you to build the open-source components into your proprietary product.
Now, more than ever, cheap distribution is critical. Open source provides that distribution.
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.
Good question: "why aren't proprietary companies doing more of this?"
My simple answer to both: economics, more specifically the economics of their situation.
"Cheap distribution" can refer to a low cost but complete sales and marketing effort. I say a company which starts with a proprietary software model with upfront license fees finds it economically disadvantageous to move to a subscription or service model, the predominant models for open source companies. Oracle and Microsoft employ plenty of smart people, they have analyzed these subscription models and through the analysis in the bottom drawer.
Cheap distribution can also mean a software product which one can easily download for free. I know only a few instances where a seed product has evolved into a transaction for an upfront license fee for the vendor. For example, Adobe Reader can act as a seed for Adobe Acrobat. Most open source products which act as seeds for a product with proprietary extensions still result in a subscription or service relationship between the customer and the vendor. So, "proprietary companies [aren't] doing more of this" because it is not in their economic interest or the nature of their product does not lend itself to this seeding model, or both.
Fred