Is software becoming more or less proprietary? Look at the data

Reading Marc Fleury's post on the subject of open source and proprietary software (a response to my post on Benchmark's investment in Engine Yard), you'd be tempted to believe that the world is growing more proprietary. Reading InfoWorld's response to Marc, you'd be certain that yes, the world is definitely closing off.

Unfortunately, the data suggests the inverse.

It seems quite clear to me that the software industry is rapidly, in some cases, and gradually, in others, opening up. Very few can get away with foisting a heavily proprietary model on the market anymore. Were a startup to launch today with a great new idea for a proprietary database/application server/etc., they'd probably fail to get funding and would certainly fail to find a great deal of customer traction. (I should know - the founders of my company, Alfresco, attempted to do just that before starting Alfresco.)

Even Marc's words fail to convince because his example (100% open) speaks much louder than his belated blog entry on the subject. The blog isn't paying his bills. Open source is.

I think the reason for the disconnect between reality and words is because we're looking at the same data in different ways. Let me explain.

Marc's acid test is that open-source companies continue to deploy proprietary software. Zimbra, SugarCRM, and others are examples. But I look at that same phenomenon and see a huge amount of open-source code that wasn't there yesterday. Yes, these companies hold back some of their code, but they also give away a huge amount. Are they a proprietary company because they haven't taken the next step? No. The direction is toward more open source, not less.

What about Google, Digg, etc.? The direction there, as well, is toward giving away one's product (to foster abundance). The 20th Century would have tried to gate access to these services. The 21st Century makes them open and free.

Such is the nature of our industry. Opening up, not closing off.

It's critical, however, to note what is opening up. 20th-century value. In MySQL's case, the database is 100% open. The tools and services around it? Not as much. Yet as an enterprise buyer I'm much more inclined to know about the product (because of open distribution) and adopt the product (because of open source/reduced lock-in) because MySQL is giving its core product away for free (as in freedom and as in price).

The same is true of Google and the new-style web companies. The core product is free while money is made on the periphery. That is the 21st Century's answer to the 20th Century's tired business model of locking up the core product and maybe, maybe giving away some complements around the edges.

Is the world opening up? Absolutely. Just look around. Is it 100% open source? Yes, if you're talking about the core of a product to an increasing degree. No, if by this you mean that 100% of the services/software are licensed under the GPL, MPL, etc. Even Red Hat makes its services proprietary, but enterprises don't mind because they're no longer locked into the core.

That is the difference. That is why I can cheerily claim that open source is winning. It is changing the way even proprietary software companies do business. The trend is toward opening up the core of one's products and closing off the peripheral tools, services, and software that provide a compelling reason to buy without locking in the customer.

Progress.

[billxa]

This is an interesting debate that is being carried out not only here, with Matt responding to Marc Fleury, but also, as Marc mentions in his post, by Savio Rodrigues in his InfoWorld Open Sources blog. Companies that are "open" are in fact commercial companies that do expect to make some money. Even if they were nonprofits, they still have to collect enough money to pay those who do the day-in and day-out work. One of the ways the legitimate ways these companies make money is to sell some proprietary software that complements or extends their open source software, especially for a targeted subset of users who get more than average value from the software. This certainly does not make them proprietary, closed source companies. The value they create in the open for the community is still there and keeps coming because they have found a way to pay for it. As Matt points out, the open source model is creating openings for new players in a software space that otherwise might close them out. This drives competition for the proprietary vendors and better economics for software users as described in my own blog post: http://www.xaware.org/component/option,com_myblog/show,Interesting-Open-Source-Business-Model-Debate.html/Itemid,54/

Bill Miller, XAware.org