Leveraging Linux when Hardware is a Commodity?

AKInnovation asks: "My company produces peripheral hardware used in commercial applications, such as retail POS. In our market, amongst other such hardware manufacturers, we are the only ones to offer Linux software solutions (drivers). This distinction has recently won us several large accounts. When the hardware becomes a commodity, and you must compete on the software side to keep the money coming in, how can releasing your code as Open Source be rationalized to management?"

Comments

Find other ways to compete, or die.

[Anaxagor]

Software is fast becoming a commodity too - if you're in the US, you're competing with code churned out in India, and pretty soon those guys are going to be undercut by code factories in places like the Philippines, and so on, and so on...

Very few organisations can rely on software for their *only* competitive advantage... Microsoft are making game consoles, Red Hat are branding themselves as a solutions provider and SCO decided to pursue racketeering as a business model.

So compete on service; offer value-adds like training and consulting, facilities management, hosting, colocation, monitoring etc.

Thats a tough one

[JaF893]

If you are the only ones in your market to "offer Linux software solutions" then you are shooting yourself in the foot by open sourcing the drivers. In other words the only thing that seperates you from your competitors right now is your linux drivers and by giving them away you are levelling the palying field and removing your main advantage.

This is why you may struggle to convince the management that open sourcing your drivers is a good thing(TM). I think your best chance of convining the management is if you present to them a number of case studies of companies open sourcing drivers. For example, Intel releasing modified open source drivers for Centrino chispets. I also think that you will need to present an effective system for managing the open source project.

Re:Easy: Its the people.(GPL question)

[G4from128k]

4. Establish good working relationships with customers, customize the codebase for them. (Customers == people who want customized work.)

How does GPL treat for-pay customized code in terms of what must be released in the open to the public vs. can be kept closed and confidential? If a customer pays to add highly proprietary features added to a GPL codebase, does GPL force the release of that code? Can a company that is using GPL code contract with its contirbuting development community to make closed-source customizations of GPL code under an NDA? If the customer with the customized GPL-derived code then sells that software to their customers or franchisees, does that force the release of the code?

I'm just wondering how the open/GPL world of free software interfaces with the closed world of proprietary business innovations.

Open Source is a Marketing tool

[lotussuper7]

If you look at the Business relationship you have with customers, then Open Source can be a very strong marketing tool.

Many larger contracts for systems require that either the (embeded) source either be provided or placed in escrow in case the company goes under, drops the product, etc. Such a requirement is simply being smart in a business relationship.

And, there is no assurance that just because your company is large, it is going to survive.

So, if you provide open source, your sales types can start hyping that very fact as a HUGE feature, that you want to step up to the plate and work with your business partners to protect THEIR business decisions, yada, yada, yada.

Make your money doing customization of the code. (Your customers won't want to, that's why they came to you in the first place rather than developing their own solution.)

Forget the "thousands of eyes" arguments, it means nothing to your customers from a business perspective. It may help convince a geek, but it wont fly with the guy who signs the PO.

As an opportunity to sell support contracts!

[Quixotic Raindrop]

Sure ... your code is open source, and any capable and willing Tom, Dick, or Jane can hack it and support themselves. You wrote it, so you (in theory, anyway) know how it works, how it fits together, and besides, selling and renewing support contracts is a much smarter way to make money than selling software. Work the support angle and try to get some marketing wonk to give you some marketing-speak to back it up.