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O'Reilly on the Open Source Industry
Idmat writes "Tim's latest opus, "The Strange Case of the Disappearing Open Source Vendors," starts with Sherlock Holmes ruminating on "the curious incident of the dog in the night-time" and winds up explaining why open source is good for businesses even if it isn't always good for software vendors."
Well, it seems pretty easy why Linux companies die. All the big Linux companies were during the dot.com . Well we all know how that turned out. Simply enough, if they created a product, somebody could come in and make a better gpl version of it. The incentive and the money wasn't there. No money = no company.
Well, in the case of todays Linux companies, le'ts see who they are.... IBM, SuSE (big in Germany),and Red Hat (it IS linux.. heh). Those are your big players (along with a few other distros). IBM makes its money by being a glue contractor.
"You need X done? We can use Linux (so you can put more money behind the hardware instead of software. Your performance will be 30% more without cost of software."
Then you have 2 major distros. They sell conveinance and/or commercial apps. Red Hat wont sell commercial stuff (yet).
Overall, this "insight" on this article is idiotic. The article is soo much more than "Why dont Open Source Companies make money?" It covers topics of governments and why ours ISNT using linux wholesale (MS marketing/lobbying). Bad Slashdot reporting. That's all. Go read the article.
Try building a large complex product like, say certain commercial RDBM systems, across a dozen different Unix OSes and you quickly come to appreciate the commonality of things like GNU make. Open Source is useful for proprietary software vendors since it can help them develop their proprietry software products. A reasonable thing is to have them contribute back: patches to get the thing to compile on oddball platform xyz for example. If folks who tried to sell GNU make had a tough time (is Cygnus still in business?) it is not for lack of value of the product. The product does not lend itself to the over hyped marketing strategies that prove popular for other proprietery things like DB2 or Oracle.
Why do people or companies use software? They use it to achieve their own ends (eg. manufacturing widgets). In terms of the whole economy, the software industry isn't an end in itself, it's a means to an end (eg. making widgets or whatever you or your company does). Cheaper software might be bad for software vendors but that can be good for the economy overall. Widgets are bound to be cheaper if the companies that manufacture and sell them don't need to pay the M$ tax.
I don't know about you, but I make a living using open source software. I contribute a little bit, but I leverage open source a lot.
So how can anyone say that open source is bad for business? I happen to be a business of one person, focusing on open source software consulting. My expenses are low and the value I provide is high.
And I'm quite profitable, thank you very much.
How many others here can claim that? I bet that thousands can.
If anyone claims that Open Source is doing anything but improving business and the economy, send them my way. I'll show them my piece of the world. And I'm far from being alone.
But it looks like some people in one particular software business wants to shut down my business. I'll fight that to the end.
Yes, I know that Wal-Mart shows up on Netcraft as running Microsoft IIS, but curiously, the operating system is Linux. So, it appears to be a case of the fairly common Apache hack, in which the Apache source is modified to output IIS as the server string. Mike Prettejohn of Netcraft assures me that the method used to find out the underlying operating system is less susceptible to modification in this way than the Web server signature.
Could this be an indicator of the future of Open Source? It seems to me that while IT departments are going to be pushing open solutions more and more, the management is going to be worried about the effect that would have on customers and users. Which could be significant, with Microsoft spending vast sums on FUD, and adding a 'Works best (or only works) with an MS-approved client/server' warning to their products. (Which we will likely see more and more of as the march to Palladium continues.) In the future, we will see more open source system masquerading outright as proprietary ones.
The second reason I foresee this happening is that the history of Open Source is replete with examples of projects such as GNU, Linux, Lindows, and XFree86, all started with the intention of replacing a proprietary product with an open one.
Frankly, the fact that there are less companies developing open products doesn't worry me, because it's much easier to start building a clone while you are small enough to fly under radar. It's only when the product is approaching a usable status that a company is needed for promotion, protection, etc. and it is then that they will spring up around the product.
Last I checked, most Open Source developers had day-jobs unrelated to their open projects.
"In my values, freedom is more important than 'serving users' in a mere practical sense." -- RMS
Actually, i'd venture people are a lot more altruistic then you give them credit for, my AC friend.
/. subscriptions, i think it will be higher than most people believe. Communities such as open-source will continue to work, due to the quality of the products (Apache, Mozilla, Open Office to name a few) and sense of community and dedication to principles.
Look at people contributing to various communities and companies because they believe in them. Kuro5hin raised 35,000 dollars in two days, from a comparatively small reader population. Either RH or LM posted their first positive money flow recently. People, if they believe in things, will contribute to them. I, personally, bought Mandrake Powerpack to support the company and get nice printed manuals, and i got some customer support i don't think i'll need.
You're correct that running business models on free products can be very little cash flow, but if the company plays fair, supports the community, they community will only get larger and give back. What goes around, comes around.
If you ask how many people go
If only the whole world could act as well as the open-source community does.
(Disclaimer : Im not a raving open-source lunatic, though i might sound like it. Open-source is simply a great community design, and most people in the community have a strong sense of humanism and principles. Im also drunk)
Think nothing is impossible? Try slamming a revolving door.
Software license terminology is always confusing. I recommend looking at this explanation and nice diagram that shows catagories of software.
:-)
I've always wondered though, is software "open source" if you can look at the source code by not modify it? The word "open" is a little unclear in exactly what it implies. I guess that case is more of teasing-type proprietary software... You can look but don't touch!
If O'Reilly really wonders why all open source vendors disappeared, then they should just open source all their books and provide then contents in electronic form and they will see what happens.
This is also called the infamous "we don't have anything more to sell" surprise.
Only happens once, 'cos after that you are out of business.
Owner of a Mensa membership card.
doesnt this sound a little contradictory? How can something that is good for buisness be bad for software vendors, which, last time i checked, software venders were a pretty large buisness.
... it certainly did wonders for ours.
Think back to the time of the Robber Barrons in Germany, who built castles along the Rhein and charged tolls every few miles to merchant ships.
Destroying the Robber Barrons business was bad for the Robber Barrons, but immensly good for trade, and hence virtually every other business, in the region.
Microsoft is analogous to the Robber Barrons along the Rhein in several respects: they charge a toll (tax), they deliberately break compatability (block your movement up the river for a time), they move the target every few months (each trip up the river terms and conditions for passage changed), costing you time and money to get your stuff working after a fashion (again), and so forth. Getting rid of this parasite does wonders for your business
The Future of Human Evolution: Autonomy
...was bought by Red Hat. As far as I know, they were never unprofitable, allthough in the early days they did get a few friendly development contracts with the FSF to stay in business. These days, it seem like most of Red Hats "wins" (and profit) come from the part of the company that used to be Cygnus.
Cygnus never seriously tried to sell GNU products, instead they sold support. In fact, their original name was Cygnus Support.
At one time they did have some "boxed products", GNUpro and even a Cygwin 1.0 box (which I'm the proud owner of). However, the real money came from support and development contracts.