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

Easy: Its the people.

[torpor]

It is my opinion that the future of Open Source is "General-purpose codebase re-applied to Custom Computing Scenario".

how can releasing your code as Open Source be rationalized to management?

1. Release your code.
2. Manage your contributing developer community. (Sourceforge)
3. Grow the codebase by doing #2 well.
4. Establish good working relationships with customers, customize the codebase for them. (Customers == people who want customized work.)
5. Add a services department that does #4, and only #4, when you've got #2 under control.

OSS is the grand unifier which sets the standards - pretty high - for everyone. The way you differentiate is by really identifying the needs of your customers and then using the OSS machine to deliver on those needs ...

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.

Re:Find other ways to compete, or die.

[yason]

Yep, Microsoft is really unable to make a living out of Windows and Office.... Get real.

But he's true. Microsoft would have a hard time selling commodities like O/S + bundled software, Office etc. if we were to start from scratch, without the huge momentum and inertia involved in the 10 years of monopolist tradition of using vendor-locking MS products. There are few competitors in commercial desktop O/S + Office department not only because MS is practicing tough monopolism but also because the market has stagnated, saturated. When was the last time you waited for the next version of your favorite word processor, like in the 80's/90's? Now people implement O/S's and office suites in their spare time and they make it open source.

Do you remember when Netscape was selling their browser? I guess they made a few dimes during the first years but nobody does make money off web browsers anymore, not even from companies. Same goes for making web pages: only a little money is paid for writing HTML, unlike in the late 90's. Web and HTML are commodities. These days companies buy meta software like a CMS instead of web pages. They buy customized software solutions instead of retail products. They don't buy Apache or IIS (if both were on sale as separate products) but a web application framework and custom development on that.

OSS fits the scheme perfectly, where companies only want to pay for their part and get standard software on the basis of their solution. CSS fits in less perfectly but it's still drifting towards the same situation, anyway.

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)

[AlecC]

As I understand it, yes. The GPL requires release of the code only to the customer who pays you for it. You must transfer to the customer full rights to the GPL original code and to your updates to that code. The customer then has the right to release that code under the GPL - or not, which is probably what they will choose. The GPL does not say that you must release back to the developer community, only that you must release full GPL sources to anyone to whom you sell the code. If your customer then sells your code on, they are equally bound by the GPL to give the code, with full GPL rights, to their customers.

I.e. A business can add their business idea to GPL code (including implemented by you) for their own, essentially in-house, purposes. However, they cannot take a lot of GPL code, sprinkle a few neat ideas onto it, and market the result as a closed source package.

Don't release it as open-source

[alienw]

If your only edge is the POS software, then don't release it as open-source. That would ruin your company, and I thought that was pretty obvious. The only time it would make sense to make software for a POS thing open-source is if the SOFTWARE is a commodity (Linux is an example of this, except with operating systems). Otherwise, it would simply give your competitors a boost.

Of course, if your customers want access to the source, then you can give it to them under a restrictive license (so they still have to buy your hardware). But you don't want to lose your competitive edge.