BusinessWeek talks out of both sides of its mouth on Monday, on one hand carrying an op-ed piece from Collaborative Software Initiative's Stuart Cohen arguing that the "open-source business model is broken," while on the other hand talking up how enterprises are turning to open source to save money and drive productivity in tough times.
Which is it?
It's both, of course. Cohen is referring to a bit of a straw man when he claims open source is dead, referring to support-based business models that don't add "proprietary" value beyond the base, open-source code. All successful open-source companies have always had some value-add beyond the base code itself, whether that company is Red Hat, MySQL, SugarCRM, Zimbra, or IBM. We've just become more open about calling it out.
Cohen is therefore right to declare:
Open-source code is generally great code, not requiring much support. So open-source companies that rely on support and service alone are not long for this world. The traditional open-source business model that relies solely on support and service revenue streams is failing to meet the expectations of investors.
So we need more efficient ways to monetize open source. Point taken. But customers aren't waiting. As E*Trade Financial Chief Scientist Lee Thompson tells BusinessWeek, the benefits of open source are too good to ignore, and go well beyond acquisition cost:
For some companies, the benefits of open source extend well beyond cost savings, to such areas as license management. "Your engineers spend less time on contract negotiation and more time on the technology, which is really what you want them to be doing," says E*Trade's Thompson.
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