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Developers Lose With Proprietary Software

An anonymous reader writes "Appgen looked like a nice cross-platform accounting program independent software developers could use as a base for custom applications, and lots of them paid $2000 or more for the company's development kits. Then Appgen went out of business and left all those developers stranded. They can't even generate license keys, and their support has disappeared. Nobody knows who now owns Appgen's code, so it looks like all those developers and their clients are screwed. This couldn't happen if Appgen was Open Source. There's a strong lesson in this story for those who choose to listen." Newsforge and Slashdot are both part of OSDN.

32 of 394 comments (clear)

  1. Source code escrow by sphealey · · Score: 5, Insightful
    This couldn't happen if Appgen was Open Source. There's a strong lesson in this story for those who choose to listen.
    Yes, the lesson is: don't buy a propriatary app without a 3rd party source-code escrow agreement. That was figured out around 1965.

    sPh

  2. From a Real World Experience... by Black-Man · · Score: 5, Insightful

    We gave our source to our paying customers when we decided to drop the product and switch directions.

    Everyone seemed pleased with the arrangement, even though I doubt they were pleased when they got the gazillion lines of C++ code without support.

    And to think my idea of going open source was ridiculed by management 6 months before we flamed out.

    Sheesh...

  3. .net by heroine · · Score: 2, Insightful

    This is a ripe story for a weblog which covers .net more than any other framework. Funny how no-one ever questions whether the .net we've been getting told to learn or face certain doom might be canned and never heard from again by its owner.

  4. Accounting for the story... by Merovign · · Score: 3, Insightful

    #1 - serious question - how many serious accounting packages are being worked on in the open-source world? It's exactly the kind of software hackers usually denigrate...

    #2 - I think this is as much about poor planning (contract negotiations on the part of the developers, defining and/or selling and/or making a "will" for the software on the part of the owners) as it is about IP. And I'll bet somebody knows who owns it, they just haven't settled it yet.

    #3 - How many abandoned Open Source apps are there? I mean, sure, you won't have the key problem, but still. The grass may be greener, but it isn't self-mowing, self-watering, and immortal!

    Obligatory Criticism from Merovign. :)

  5. Umm by Mr_Silver · · Score: 4, Insightful
    Now contrast this with an open source business model:

    1. Modify an open source software package to fit a niche market
    2. Sell installations, manuals, customization service, and support to that market
    3. Profit!

    Unfortunately I haven't seen many Open Source businesses manage to achieve point 3.

    I'm sure everyone can mention a few that have done so (Redhat and Cygwin spring to mind) but there are vastly more that have either fallen by the wayside or are resorting to begging for money (Mandrake?).

    Open Source is great, but it too isn't perfect ...

    --
    Avantslash - View Slashdot cleanly on your mobile phone.
  6. Re:Sounds familiar by Randolpho · · Score: 5, Insightful

    Er.... the Java programming language is a specification, and an open one at that (IIRC). If Sun went under, IBM still has a kick-ass VM and SDK. And a great IDE in Eclipse, too. If Sun went under, Java would continue unabated; it's a programming language, not a library or modifiable application.

    From the article it seems to me that Appgen (which I'm not familiar with) is either an IDE/Library/ProprietaryLanguage, or a full-blown application that developers can modify for their own use. It's a far cry from Java.

    --
    "Times have not become more violent. They have just become more televised."
    -Marilyn Manson
  7. the problem isn't closed or open source... by grocer · · Score: 2, Insightful

    It's called bad business practices and a risk everyone takes whenever they buy anything and do not research what they are buying and who they are buying it from.

    The real tip-off in the article is the fact they did the same thing with a previous program...I can't feel too much sympathy with individuals or companies doing business with a company but not doing a through check of who they are doing business with.

  8. Not about open/closed source, it's about keys... by Anonymous Coward · · Score: 1, Insightful

    Companies fail from time to time. It happens.

    BUT, now that the company isn't operating any more, they can't issue keys to reinstall the software that they legitimately purchased.

    That's why I refuse to buy software with product activation - you're SOL if the company won't (or isn't able to) give you a new key.

  9. The moral of this story.. by Anonymous Coward · · Score: 1, Insightful

    Buy Microsoft products.

    You'll be out of the commercial software business long before they are.

  10. Oh? by tsanth · · Score: 2, Insightful

    If it was open source and GPLed then you wouldn't be able to use the code in your own commercial product.

    Isn't this the problem that the LGPL is designed to solve?

  11. Market Penetration by Tony · · Score: 4, Insightful

    #1 - serious question - how many serious accounting packages are being worked on in the open-source world? It's exactly the kind of software hackers usually denigrate...

    In my analysis, it isn't that open-source developers don't want to work on this sort of thing, it's that there is a certain amount of infrastructure that needs to be in place before projects like this can proceed. Several enterprise-class accounting projects have been started, but few finish; it's because the tools aren't in place yet.

    The FOSS community doesn't avoid doing corporate-type projects, as a lot of people claim. FOSS software is written because it is positioned properly to fullfill a need. Until very recently, FOSS was not accepted in the enterprise. Now, as more and more corporations are depending on various FOSS software, you will see many projects targetting medium-to-large corporations.

    For instance, look at the relatively-new GNU Enterprise project. This is a major undertaking which has begun by creating the tools required to build an enterprise management infrastructure.

    As FOSS software penetrates various markets, you will see many FOSS projects building finance/hr/materials-management/analysis tools. I predict that 2004 will be the year of the enterprise for FOSS (Linux,*BSD,GNU). You'll see prepackaged medical management software, ERP software, etc. By the end of 2005 I believe you will see a complete enterprise management system, from supply chain to finance to HR to payroll.

    But maybe I'm just a pollyanna.

    --
    Microsoft is to software what Budweiser is to beer.
  12. Think how much worse this will be when.... by nautical9 · · Score: 2, Insightful
    ... every software company out there requires online Activation before you can use their product.

    Not only will reinstalling a computer takes AGES due to all the products you need to activate (and heaven forbid you changed some hardware - time to call them all up one-by-one and plead your case), but you won't even be able to install any package from a software company who has gone belly up.

    1. Re:Think how much worse this will be when.... by CountBrass · · Score: 2, Insightful

      So buy a Mac. Or install Linux, or BSD.

      Windoh!s isn't the only OS you know.

      --
      Bad analogies are like waxing a monkey with a rainbow.
  13. Macromedia next? by Anonymous Coward · · Score: 1, Insightful

    Did any of you see what happened when their third quarter earnings came out? Off 34% in one freakin day! Holy Macaroni.
    Imagine if Macromedia died and didn't give up their source code leaving all those Flash, Dreamweaver, Director, Authorware apps hanging. That's a big huge piece of the software market and look at the gyrations in price. It's scarry.
    Sure, in most cases it would be irrelevant because it's all out there, but what about people still maintaining their products and say they lose their licensed media. What are they going to do when the company is gone. It's hard to imagine, but jeez 34% in one day. That's hard to imagine too.

  14. Re:Sounds familiar by Elwood+P+Dowd · · Score: 3, Insightful

    Meet gcj, smart guy.

    --

    There are no trails. There are no trees out here.
  15. no no no.. by Suppafly · · Score: 3, Insightful

    ugh.. as nice as it would be to say proprietary software is bad, these are the results. That just is not the case.

    Proprietary software failed in this case because the people using it (stupidly) paid a lot of money for software that had no contingency plan or guarantee.

    To use a popular /. analogy, when I buy a ford car, I have no guarantee that I'll be supported after ford goes out of business.

    When you pay a lot of money for something with no service guarantee of any kind, stuff like this happens. Sure using OSS may have helped with this problem, but OSS has a whole slew of other problems.

    If its merely a license key issue, I'm sure these "developers" could get around that. Judging by the number of keygen programs for other software packages that come out the same day a program is released, this is a non-issue.

    1. Re:no no no.. by tshak · · Score: 2, Insightful

      I have no guarantee that I'll be supported after ford goes out of business

      Which is why hardly anyone would buy Daewoo's until GM picked them up. The same could be said for hardware as well. If you buy from a company that's not financially viable you could be stuck without support. I agree with you completely. This is the result of a bad business decision, not the result of using proprietary software.

      --

      There is no longer anything that can be done with computers that is nontrivial and clearly legal. -- Paul Phillips
  16. Re:uhu, sure, but what about the money? by Bishop923 · · Score: 2, Insightful

    They still would go out of business, they just wouldn't screw their customers in the process.

  17. Escrow and bankruptcy by ProfDumb · · Score: 5, Insightful

    Yes, the lesson is: don't buy a propriatary app without a 3rd party source-code escrow agreement. That was figured out around 1965.

    So, you have a contract that specifies software escrow. And when the company goes bankrupt and you find the source is not in escrow (or not all of the source is in escrow, or there is third-party IP in the escrowed source, or ...):

    who are you going to sue?

    An escrow agreement is likely to be enforceable right up until the moment you need it.

    The difference with open source is that you have the source in hand now and so if the company disappears you don't have to sue a non-existant entity to get the code.

  18. Re:Use an escrow by drinkypoo · · Score: 2, Insightful

    That's okay. Those VARs can now approach whoever acquires the code, and show it to them, and say "give me the source or I'll sue you into oblivion" - That escrow agreement is a legally binding agreement, right? Any agreements are transferred along with the software.

    --
    "You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
  19. Re:Sounds familiar by Greyfox · · Score: 2, Insightful

    Everyone has the source to Java. Well enough other people that it wouldn't matter if Sun went away. IBM has their own Java VM and Compiler (The rules for looking at Sun's code inside IBM are very strict.) The Blackdown people are allowed to compile it for Linux although I don't know the details of their source code license.

    --

    I'm trying to teach myself to set people on fire with my mind... Is it hot in here?

  20. Nice troll by drinkypoo · · Score: 4, Insightful

    But this has already been covered once WRT Java, which is precisely the same thing. Java and .NET are both open specifications. There are a couple replacements for each (Java: IBM JDK, gcj; .NET: Mono, DotGnu) so if one of them should drop off the face of the earth there is a free and open source replacement.

    --
    "You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
  21. Re:Why developers? by nmos · · Score: 2, Insightful

    Even if you cannot afford the developer effort needed to completely take over a dead project OSS still gives you some additional options:

    1. Work with other stranded customers/users to share the cost of development.

    2. Hire just a single developer to handle immediate problems and buy some time.

    3. Find a replacement OSS project and pay one of the developers a months wages to create a conversion tool for your data.

  22. Buy Microsoft by Camel+Pilot · · Score: 3, Insightful

    I am sure there are those in the mega-corp world would see this as an example why you need to use Microsoft,Oracle, etc. because going with a smaller startup company could leave you stranded. Just a thought.

    1. Re:Buy Microsoft by jonbryce · · Score: 3, Insightful

      It is not beyond the bounds of possibility for Microsoft to go belly-up, especially after Bill Gates retires and is replaced with someone who has a different approach to management.

      If you are in the UK, you may have heard of a company called GEC Marconi. Under its previous director Lord Weinstock, it amassed a cash pile that was almost as big as Microsoft's. When he retired, he was replaced by another director who went on a huge spending spree and turn the huge cash pile into a huge debt pile.

      They were rescued from the bankruptcy process, but as a much smaller company. Shareholders were left with nothing.

  23. Re:... news at eleven. by Feztaa · · Score: 2, Insightful

    whatever happened to using the right tool for the right job

    I think what he was trying to say is that the Right Tool stops being right when you're not allowed to use it anymore (ie, if the company folds).

    Therefore, it's better to use a tool that's 90% right, if it'll be there forever, as opposed to a tool that's 100%, but might be gone tomorrow.

  24. Only the .net VM is open MS may drop parts by Anonymous Coward · · Score: 1, Insightful

    This happens all the time, MS can choose to make a change and not rely on the standard. If some idiot thinks .net is anything but a stab at Java they probably thought that MS would continue to evolve IE when Netscape was finished ;)

    As long as Java exists .net exists, ironic but true. If Java were ever to go away, .net would become MS.Net with "propriatery windows enhancements" (which is not a stretch from what it is right now).

    Java OTOH has several open source implementations and a very well documented API and standard process that goes all the way. Not to mention that the full Java server stack is open source!

  25. "Open-source" businesses and business models by Stygius · · Score: 2, Insightful

    My assessment of open source is that it is, at its core, a software development methodology; one that is closely related to methodology of science.

    Now, if this assessment is even half accurate, it would be quite absurd to blame the failure of a certain business model to the development methodology it favoured above others. In fact, methodologies cannot themselves be attributed any value; they may, at most, have different degrees of fitness for a particular purpose.

    I think labeling a certain business model or a company as "open-source" is not only incorrect - it causes a lot of unneeded confusion. It is easy to get the impression that when an "open-source" company fails, it is a blow to the whole "open-source community", when this clearly cannot be the case when we view open source as a development methodology.

    I know that Eric Raymond, Bruce Perens and others have done a lot of work to make us think warm, fuzzy, positive thoughts when hearing the words "open source", and I understand their reasons for doing it. However, one of the drawbacks of using that kind of tactics is that we will continue to see "open source" applied where it does not belong, taking blame where there is none to be taken.

    A monk asked Joshu, "Does this company have the open-source nature?" Joshu retorted, "Mu!"

  26. Has anyone ever seen software escrow work? by GGardner · · Score: 2, Insightful
    I'm not asking this to be smarmy, I'm really curious, and I hope that I can get an answer, even though this reply is late in the thread. Every time I've seen software escrow (from both sides), it was a last-minute thing, and not really thought through well. On the developer side, every quarter, the lowest developer on the totem pole was asked to tar up a source tree, put it on tape, and FedEx it to the escrow company. Was that tree buildable? Who knows? Did it correspond to any version we shipped? Doubt it. Did we ship full build instructions? Nope.

    For software escrow to really work, the escrow company has to be in between the developer and the end user. Whenever the developer wants to ship a new release, the escrow company should check it out of the source code control, build it themselves, and they should ship the binaries to the customers. This is the only way to ensure that the binaries the customers run are fully covered by escrow. But no one does that -- it is too expensive.

  27. Re:uhu, sure, but what about the money? by Grishnakh · · Score: 2, Insightful

    It's a better situation than most proprietary situations where you don't have any access to the source code whatsoever.

    The customers don'thave to do free R support is part of their paid contract. The modification stuff is just a clause in the license in case they do decide to do any modifications themselves. Normally they'd request features from the developing company.

    Of course the customer isn't allowed to give the modified code (since it's still a derivative of the original company's code, which they still own) to other people. You can't buy a DVD, make copies, and hand those out to anyone and everyone either.

    Since most customers aren't going to waste their time making modifications to code they don't wholly own, this isn't a sweet deal for the original company; it's an added bonus for the customer in case they want to see the source, or (especially) if the original company folds. This is the big reason everyone on here is yelling about how using open-source software would have avoided this situation in the first place.

  28. Interesting factoid... by plopez · · Score: 2, Insightful

    Next time some one talks about how it is better to buy proprietary solutions because of better 'support' point out that the following;
    of all the technologies traded in th NYSE in the early 1970s, only IBM is left.

    Sperry - gone.
    Burroughs - gone.
    DataGeneral - gone.
    CDC - gone.

    The list goes on. Thier proprietary solutions by and large are dead. DEC merged with Compaq which got bought out by HP and now the Alpha and VMS are orphans.

    HP is in a death spiral.

    MS is a new kid on the block (Burroughs for example was around for 50 years or more), and so should be regarded as shaky.

    Other companies made forays into computing but pulled the plug in the 60's and 70's. Technology is a VERY volatile industry, the only way to really cover yourself is by getting the source code.

    --
    putting the 'B' in LGBTQ+
  29. Right on que by leabre · · Score: 1, Insightful

    It's amazing. Anytime anything happens in the non-OSS world all of the sudden this is one-more-reason(tm) why all software should be open and free and why no one should have to pay.

    I wonder how much software would actually be produced if people weren't being paid to do so.

    I really hate to say it, a rather unpopular view on slashdot, but the best software I've ever used is software that requires a fee. It has the best support, best features, *quickest* evolution, better interfaces, more consistant user-interfaces, less chances of the creator abandoning the project and no one else continuing it, and so on.

    However, there is a much stronger evil at play here than the software just being "proprietary".

    It's the fact that it requires some type of phone-home based unlocking. That's the real evil and danger at play, not it being proprietary.

    I have two cases in point.

    1) I have purchased e-books in the past and unlocked them on an early WinXP drive. Sooner or later I had to reformat and re-install. Of course, without paying *again* for those ebooks, I couldn't view them. This is primary reason #1 why I don't believe in hardlocking-based unlock mechanism.

    2) I have purchased an expensive book that was clearly advertised as having an e-book on the CD-ROM (one of the reasons I bought it -- I have over 300 tech books mostly C++ and assembly and C# and am trying to collect ebooks of those -- yes, I pay).

    Time comes to view the ebook and many of its features requires activating it. No problem, I'll activate. Nope. The company that activates is now out of business and the book publihser assumes no responsibility or liability and that is a total 3rd party issue, not theres. So now I'm stuck with a partial ebook that I paid $95.00 for. This is why I don't like phone-home hased protection mechanisms.

    --

    There are some activation techniques I think are very reasonable. For example, I use libronix for most of my ebooks that are religious literature (about 200+ collections). It's a great ebook reader (blows away most others I've used) (and has no restrictions other than the ones I list below). It does requires hardlocking and phoning home but, once you do, you get a unlock file that allows you to install it as much as you want on your PC's without re-activating. The only catch is that it requires your personal info before you can unlock any works and all works you unlock can only be unlocked against your unlock file (activation). Well, there's not problem since I have no intentions of sharing it on the Internet with 500 million of my global friends. I think it is a more than fair technique. If they go out of business, I still have my permanent activation key.

    3) Issues I haven't yet dealt with but I know its coming, is when MS decides to stop supporting activation of WinXP/2k3, Office XP, etc and I still require them. I pay $2000+ /yr. for MSDN and all I get for that is 10 activations for WinXP and 2 activations for OfficeXP. Great. Wonderful.

    And there's this issue, both hardlocked-based-protection and phone-home-based protection. The deadliest combonation. People got screwd. But the issue here isn't proprietary. It's obvious that the makers of the software didn't want to make their software open-source and appearantly others didn't either nor would they have made it in the first place if they didn't think they'd make money. It's not wrong to want to be paid for your hard work. But requiring your server to be the only say-so in installation is the problem and lying about the source code escrow.

    Please don't cry "this is why everything should be open-source" when something happens. I'm an excellent programmer but became excellent because I was paid to do so. That's why I can program 10-16 hours a day and get paid for my training, company paid cert