We take these open-source truths to be self-evident
The logic of open source is increasingly clear to a growing number of businesses. Ironically, however, that logic generally dovetails with a recognition of how to marry open source with a proprietary revenue driver.
Once you figure out the scarce good for which customers will pay, open sourcing everything else becomes a no-brainer.
Google, Red Hat, and a wide variety of other businesses have all discovered this. So has Nokia, as Glyn Moody writes:
...Once (Sebastian Nyström, vice president of application and service frameworks in Nokia's Devices unit) laid out the logic of moving to open source, there was very little resistance within the company to doing so. I think that's significant; it means that, just as the GNU GPL has been tested in various courts and found valid, so the logic behind open source--that openness allows software to spread further, and improve quicker, for the mutual benefit of all--is also increasingly accepted by hard-headed business people: it's become self-evident that it's a better way.
Sort of. What's becoming self-evident is that open source is a fantastic way to drive community value, which funnels prospective customers into purchasing proprietary value born of scarcity. Whether Google AdWords or Red Hat Network, it's the same phenomenon.
In other words, it's not that businesses have bought into the ideological allure of freedom. It's that freedom can more efficiently create a large base of prospective customers for something else.
Moody cites IBM as an example of a company that has seen the light on the benefits of open source. Indeed it has. Open source enables IBM to sell billions...in proprietary hardware, not to mention the billions in proprietary software sold on the back of open-source software, as IBM's Savio Rodrigues articulates:
In the WebSphere division, we contribute to countless open source projects, including the Apache HTTPD, Dojo Toolkit, and Eclipse Equinox projects. We then utilize code from these projects with IBM enhancements inside of WebSphere Application Server. This strategy allows us to do more with less.
Indeed, I'd argue that such open-source software commitments are easier when a company has a clear proprietary strategy to justify and monetize them.
That's why it's easy for Web 2.0 companies to shovel money into open-source development communities: open source channels more customers of their (closed) cloud offerings.
It's also why we see more vendors turn to investing in (e.g., IBM in Apache) or founding (e.g., IBM in Eclipse) open-source communities, rather than controlling their own, self-branded projects, a trend highlighted on Thursday by The 451 Group's Matt Aslett. Vendors that have proprietary selling points elsewhere don't need to control open-source code.
Cynical? No. Businesses aren't charitable organizations.
Even Google. Even MySQL. Even Red Hat. Most people tend to forget how irate "the community" became when Red Hat introduced Red Hat Advanced Server and stopped supporting its consumer customers. Red Hat was forgetting "the people" to serve "the Man."
Years later, Red Hat is considered the paragon of open-source virtue. And well it should be: Red Hat is particularly good at balancing the hard-headed realism of profits with the idealism of open-source software.
As more companies discover the strategic, pragmatic advantages of open source, we'll see even more of it. As Gartner's Brian Prentice correctly argues, "While the romantic open source narrative is failing, Open Source continues to get stronger."
For many of us, open source's allure has always been about William James pragmatism, not Richard Stallman idealism. Yes, you need the idealism to keep pragmatism honest, but without the "logic" of money (and IBM's initial $1 billion commitment to Linux), open source would never have become the global phenomenon that it is today.
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 chief operating officer at Canonical, the company behind the Ubuntu Linux operating system. Prior to Canonical, Matt was general manager of the Americas division and vice president of business development at Alfresco, an open-source applications company. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure. You can follow Matt on Twitter @mjasay. 
Isn't that against the open-source licence?
You are half-right when you say "Once you figure out the scarce good for which customers will pay, open sourcing everything else becomes a no-brainer." But you imply that all strategy is based on goods, when more than half of the world economy is based on services. I.e., once you figure out a service for which customers will pay, open sourcing all your software becomes a no-brainer. Worse, however, is the fact that you don't look at things from the open source perspective, which is how the value of open source itself determines the value of the service. If you offer to the market some body of open source software, but you declare "ah, but the brain is some software proprietary to me", the body is not worth much, and you should not be surprised at how little attention the body without a brain receives.
Red Hat is a paragon of open source virtual precised because we are not confused about the distinction between goods and services. The balance we obtain is not a result of a clever slicing and dicing of what software we make open source and what we retain as proprietary and non-open source. Rather, it is due to the positive feedback loop we obtain by being 100% open source *and* 100% focused on delivering customer value. Which leads to my second major criticism of your thesis...
You claim "What's becoming self-evident is that open source is a fantastic way to drive community value, which value funnels prospective customers into purchasing proprietary value born of scarcity." I challenge that assumption by saying "What's becoming self-evident is that open source is a fantastic way to drive value, both in terms of community value and in terms of customer value. Such value is not based on scarcity, but based on the superior efficiency of both communities and customers being able to achieve their respective goals the open source way."
I am sure you are familiar with the CIO Insight vendor value survey, which has consistently ranked Red Hat at or near the top of all enterprise software vendors. None of the metrics of value have anything to do with "makes the most scarce resource available at the highest possible price". The metrics of value are, to refresh your memory,
* helps to increase revenue
* helps to decrease cost
* solve the business problem paid to solve
* delivers a measurable ROI
* meets commitments on time and on budget
* is flexible and responsive
* delivers a quality product
* if given a choice, would do business again
By measuring value against these criteria, rather than against real or artificial scarcity, vendors can align to customer needs. This is what open source allows--innovative solutions to enormous challenges. The success of an open source company cannot be predicted by its ability to make some code scarce, but to sufficiently commoditize software that *real* problems can be solved.
Finally, I would mark as irrelevant the quote you cite from Gartner: are they any authority on romantic narratives? I think not.
The fundamental narrative of open source software is that it is a superior method of innovation and production for software. And a corollary to that is that non-open source software is, generally, an inferior method. You can use disparaging terms like "purity", "altruism", and "romantic narratives" to argue against the idea of having more of the better and less of the worse, but the narrative stands because the conclusion stands: open source is getting stronger because open source is better. And the sooner we can free ourselves of the notion that this must be explained in terms of proprietary value, the better off we'll all be.
I suppose to be precise you are only saying that he's not yet, but you think he will be one day. In other words, you only wish him to be discredited! Unfortunately, your wishes don't make something true. And I would hope you don't ever teach econ, or logic for that matter.
For those who have read the essay, is this article suggesting that the Cathedral is the right way to go for open-source software?
So it's a mixture that provides the best solution? I wonder if the Cathedral/Bazaar author considered that the happy median is the optimal solution.
Google is trying mightily to keep Android from becoming so fractured that apps from their Android app store won't work on some flavors of phone. Good luck with that, Google.
Nor are most people at Red Hat confused by the company's value driver. If you're really selling support, you'd be on par with Canonical. If we're going to play the purity game, Ref Hat would come in a distant second to Canonical/Ubuntu. But it's a meaningless competition because customers don't care. They just don't. Your business guys know this. I think you do, too, or would If asked to carry a quota for a few months. Idealism doesn't pay the bills, but makes for great marketing.
I think Red Hat's model is wonderful forthr limited area of software where it works. But let's not kid ourselves: it's not a services business. Your customers aren't fooled. They're buying bits dressed up as subscriptions, as R0ml said years ago and which Marc Fleury used to call out (when he'd call RHEL a proprietary Linux distribution). This may offend your free-software sensibilities but it doesn't bother your customers in the slightest.
As the president of OSI, shouldn't you be promoting the widest possible use of open source instead of a very narrow, Stallman-esque view of software? More like IBM, in other words, and less exclusive. I believe in making room for as many participants as possible, consistent the OSD. The bulk of the best, most widely used open source is funded by proprietary dollars. You should say 'Thank you' to the companies like IBM, Intel, HP, etc that make Red Hat possible. Red Hat couldn't have made Linux succeed on its own.
That's the great irony of open source. We try to exclude the very models responsible for most of the best open source software being written at all.
Then why aren't they, as hard-nosed capitalists, using CentOS?
<i>"Successful software is long-lived; life-spans of decades are not uncommon. A good application/program often outlives the hardware it was designed for, the operating system it was written for, the data base system it initially used, etc. Often, a good piece of software outlives the companies that supplied the basic technologies used to build it.
Often a successful application/program have customers/users who prefer a variety of platforms. The set of desirable platforms change as the user population changes. Being tied to a single platform or single vendor, limits the application/program's potential use." -- Bjarne Stroustrup <i> (http://www.research.att.com/~bs/bs_faq.html)
Methinks your lofty goals are a tad unrealistic.
No. You assume proprietarism has no disadvantages.
When users are a major source of contributions, your statement is short-sighted and likely incorrect.
And can a system where users are not a significant source of contributions beat one where they are? Most in the FOSS world vote for the latter being the most efficient model, and many proprietary vendors have turned to FOSS in order to try and capture those user contributions.
Remember that there are many motivations to participate in FOSS. You get a ton of free code and leverage to your contributions. You can become an expert in some domain/app. Etc.
It will likely take a while for Red Hat's wisdom to be more clear.
Ever hear the old expression "Too many cooks spoil the soup" ? Just might apply to FOSS also.
I readily admit that I don't participate in FOSS, and am not even sure I understand it. But as an outsider looking in, it seems to me that FOSS fans have delusions of grandeur about the future of the "movement".
You are right about one thing. You do not understand FOSS.
They are not free-for-all's. Contributions are tightly controlled.
Nearly every single important project on and off the net are OSS based to one extent or another.
You write "The only problem I have with your comment, Michael, is that it is deirectlu contradicted by the actual experience of 99.999999999999999999999999% of the world's software businesses. You have to ask yourself why Red Hat stands alone as the only so-called 'pure' open source company of consequence. If the model worked as you advertise, more companies would use it. Red Hat is successful and would be emulated by greedy capitalists if it delivered on your eloquent vision."
Just to correct the numbers, if we take the BSA's numbers that say proprietary software was $88B in 2008 and that piracy of such software "cost" an additional $50B, then the total software industry is at most $138B per year. Red Hat's most recently reported annual revenues were $653M (rounded up), meaning that in worst case 99.53% of the industry is doing it wrong, not more ;-)
(To their credit, the BSA points out that $3 of service accompany every $1 of revenue, which means that when $1 of proprietary software cannot be deployed because of bugs, delays, or both, $4 of value is usually wasted. But that's a whole separate topic.)
But the real reason for my response is that the logic, while blameless, is also flawed. When W Edwards Deming put forward the proposition that the self-same American industries that were so celebrated in winning WW2 were actually producing such lousy products that American strategic interests were at risk, he was ignored. He took his ideas to Japan in the 1950s, and in less than 5 years, Japan began to demonstrate the extraordinary value that quality could deliver. In the 1960s, American industrialists ridiculed the idea that anything worth buying might come from Japan. In the 1970s, they tried to fight the growing trend of Japanese imports. In 1980, Ford Motor Company became the first (and to my knowledge, the only major American automobile manufacturer) to seek Deming's counsel.
First they ignore you.
Then they laugh at you.
Then they fight you.
Then you win.
Nearly fourty years later, Ford became the only major American automobile manufacturer to survive as an independent, self-sustaining entity. According to your argument, Deming's ideas were wrong because none of the greedy US capitalists could be bothered to pay any attention in the 1940s and early 1950s. I take a different lesson from history, and thus I see a different future for open source software. And I see an especially bright future for open source software precisely because when I read Deming, I see a validation of the values that are explicit in open source. That reading simultaneously repudiates the idea of ignoring, downplaying, or outright prohibiting those values (as proprietary software does).
Then they laugh at you.
Then they fight you.
Then you win."
Gandhi's slogan is not inexorable. People/companies that screw up will not climb that ladder to the very "top", and may well get stuck at ..
"They laughed at Copernicus
They laughed at Einstein
But they also laughed at Bozo the Clown"
- by hozelda October 15, 2009 9:55 PM PDT
- As the FOSS community matures (see the next sentence) and grows to include many contributors talented in areas other than software coding, we will see Apple's supposed usability advantage disappear.
- Like this Reply to this comment
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(23 Comments)It's more difficult to develop open distributed development with supporting businesses, but, if it's pulled off, that is how you will achieve the superior results because of the greater number of collaborators.
Let's face it. Most people that will contribute to FOSS in the future (potentially everyone), don't currently know what FOSS is, much less know today how to tap into it. It will take a while more for FOSS to hit its stride. We will see a lot more innovation at all levels (including with business ideas).
Since closing off products alienates users by taking away power they otherwise could have, I suspect quasi-closed-source models will eventually face quite an uphill battle in the marketplace (though obviously not as great of a battle as will face the fully closed-source models). This will be even more true if software patents are struck down convincingly.
Remember that Red Hat's success is despite the extreme biases (unfamiliarity, past investments, etc) that exist today in favor of various closed source models and platforms, so it's too early to write the story about Red Hat and about what the service model can achieve.