Slashdot Mirror
Open Source Forming a Dot Com Bubble?
sebFlyte writes "ZDNet is running an interesting look at the sudden upswing of investment in open source products and the ensuing debate as to whether the open source business model has given us a bubble (akin to the dot-com bubble) that is about to burst. The counter-argument is that the increase in investment is just the natural progression of a robust business model whose time has come. One point that few people, whatever their viewpoint, could disagree with is that the key to a financially successful open source project rests with the community, rather than just the technology."
Lets face it, if venture capitalists are investing money in companies because of buzz words (is open source a buzz word now?), then the problem isn't with the product, but with the investors. Linux, Apache, and countless other OSS didn't start with a big investment by venture capitalists. It was started by a person or group that recognized and need and thought they could fill it. OSS will live on, with or without VC.
Looks to me like an overreaction. Not everything that increases in value like this is necessarily a bubble. (though it does sound more exciting this way)
I think one of the arguments for an open source "burst" would be the reluctance of the open source mentality to accept things such as DRM. While I am very much with the typical slashdot mindset that thinks of DRM as bunch of BS, the corporate world is still heading in that direction. If the open source community can't come up with something acceptable on the DRM front, it's going to give the closed source vendors such as M$ a one-up where there otherwise may have been an open source trend.
One of the problems that I have been struggling to grasp in terms of its impact on my job is how important of a role DRM is really going to take in the coming years. As a pretty much Linux-exclusive shop, and as a media company, we could be in a very awkward position in the coming years since we don't really support anything in the way of DRM right now, and there doesn't appear to be a lot of headway from the OSS perspective, either.
A community-oriented lyrics site
The main question that you have to ask when determining whether a particular market is a bubble is "Are investors over-valuing it?"
I would argue that open-source, as it is today, is actually undervalued, and had a huge amount of economic potential that hasn't even begun to be tapped. This is not true of, say, the housing market, which many say is a bubble.
I think rather than an insubstantial bubble, what we're seeing is a whole bunch of investors realizing the very real value of open source business models all at once.
Open Source will free us from the boom and bust cycle of previous industries. Why, there's untold riches to be had there!
I just need a few million for some Aeron chairs and foosball tables, and I will reward all you investors handsomely!
Can a bubble bursting survive a vicious /.ing or vice versa?
The key difference between OSS investment and any other investment is that there can never be a true "loss" in value. I'm probably not going to explain this very well but I'll try anyway.
What I am getting at is that every dollar invested in OSS which leads to publicly released code is a dollar whose benefit will last long beyond any potential demise of the original VC group and/or development team.
This is the ultimate difference between OSS and CSS...
Ajax , the biggest bubbles any detergent can produce :)
let me whip out my VC needle, but not until ive sold all my shares first.
I'm really happy that these projects exists because being able to stand on their shoulders make me a much more productive and a better programmer.
But I have often wondered -- who are these people that pay (in money or time) to develop all this stuff? I'm really glad they do, but I hope all the "funding" doesn't all dry up someday. I'd have to do all that work myself!!
boxlight
The financial world has grown a lot from the days of the first bubble. That bubble was building over a five year period and was due in large part to ignorance. People were being paid with what amounted to an ignorance tax. The less a company knew about the technology, the more they were willing to pay for it. OSS has been slowly moving along and there are more people with a good understanding of what is happening with it in the larger tech sector. You don't have the mindset of "who cares what it costs or what it does, we need it!" Rather, you have "what is it that we have now that we can leverage more value from by going with OSS!"
What you say is certainly true... yet we keep hearing over and over about how opensource projects need to consalidate, opensource projects need more money, opensource projects need support from big players, and on and on.... That is all completely untrue and misses the whole point of opensource! So, messages such as yours need to be kept being said to combat the other wrong messages that keep being said.
Meh.
What a vacuous tautology!
The technology of open-source projects are the direct result of the efforts of its community.
This is like saying "the key to a successful private R&D firm rests with its researchers, rather than with its research!"
Open Source is one thing, somewhere in between phylosophy and religion.
Finance speculation and stock market games are more like the roussian roulette.
You choose.
Maybe Computers will never be as intelligent as Humans.
For sure they won't ever become so stupid. [VR-1988]
Drop the crack pipe and put your hands in the air!
the natural progression of a robust business model You have got to be kidding right. NO ONE, not even RMS is bold enough to call it a robust business model, that very much remains to be seen. The fact is that I present far more examples of why it is NOT a robust business model than I possible could otherwise.
the key to a financially successful open source project rests with the community, rather than just the technology.
This is utter tripe as well. The community had absolutely nothing to do with the investment in or profits of SourceFire/Snort or Tennable/Nessus. The community has had no bearing on Novell/SuSE or Red Hat. The community is definitely not where the success has rested so far and only a zealous fan boy would insinuate that.
The great bubble crash happened half a decade ago now. It's time to get over it.
The question of a "bubble" is as relevant for open source as for science. Is there a bubble in science? Both open source and science are based on openness and peer review. It there is a bubble, long term it does not matter.
I would argue that open-source, as it is today, is actually undervalued, and had a huge amount of economic potential that hasn't even begun to be tapped. This is not true of, say, the housing market, which many say is a bubble.
Housing: Absolutely limited supply. Ever growing demand.
Open Source Software: Virtually no track record of producing profit. Very shaky business model (if any). Unlimited supply. Limited demand.
I pray to all that is holy that you're not some poor schmuck's financial advisor.
I don't respond to AC's.
We're the first to call the bubble!1one Other analysts PWNED!
First off, it may be a bit premature to say that there is a bubble. The open-source movement is still an adolescent, and it remains to be seen if expected returns on investments justify the VC going in. The only people who think there is a bubble now are the people who firmly believe that open source business models aren't as profitable as proprietary software models -- which remains to be seen.
Unrelated to that thought:
FTA: Echoing those sentiments, Ron Rose, the chief information officer of Priceline.com, said that the company has become "predisposed" to buying open source products because they of the "economic benefits". A vibrant community behind a product also ensures a long-term road map, he added.
Yes, open source can be cheaper, Ron, and journalists sometimes use "quotation marks" for no apparent "reason," especially when they of the "paraphrased comments".
"Trolls they were, but filled with the evil will of their master: a fell race..." -- J.R.R. Tolkien on Olog-hai
There may well be a bubble forming. That's business.
The difference is this: At the end of the dotcom bubble burst, there was a lot of proprietary code floating around, locked up in asset portfolios that would never see the light of day. At the end of an alleged OSS bubble, there will be a lot of open source code floating around *in the open*, where people can actually make use of it and build upon it, regardless of the solvency of the company that originally authored or contributed to it.
This may well actually give the supposed "bubble" more floating power, since one company that might not be able to properly handle an open source project might have their fumbles recovered by another company that can. This could happen immediately, rather than waiting for the former company's death march to complete, drying up the VC and selling off the company's copyrights to the code.
ZDNet's comment would actually change the perception and make some investors out there doubt the decision of investing in open source. Kind of like a measurement of a quantum system would change the system, so perhaps an article in a popular tech news commenting on the investment situation in the tech industry would end up somehow changing the overall open source investment trends eventually...
Open source may be garnerning more investment than it merits, but it's still a very small fraction of the software development market, much less the overall enterprise IT sales and service markets. So if OSS investment overheats, it will just lead to VC's being wary of investing in OSS companies for a while. Given that OSS is more a process than a particular sector or a business model, this will have limited effect on the overall march of open source, and especially open standards. In concrete terms, it would suck for JasperSoft to lose funding because hype around OSS' profit potential turns out to be overrated, but it wouldn't really stop people like Sun or IBM from moving towards open source, nor will it stop the commoditization of a variety of products by open source equivalents.
So what if its a bubble. Bubbles take a long time to burst. Alan Greenspan noticed there was "Irrational Exuberance" in the stock market in 1996 - but the bubble didn't pop until 2001. The real estate bubble is supossed to pop in the US any day now.... but it hasn't yet. While I have no doubt it will pop one day - probably soon - its a fools game to try and time the thing. The thing about economic bubbles is that they last a lot longer than anyone expects they will.
So, open source is a bubble.... fine. But to say its "about to burst" is a reach. If its like other bubbles of late, now that its been declared a bubble, it won't burst for a few years yet. My advice, then, is get on that train and make some money while the getting is good.
SpyDock: Scientific Python in a Docker container
Is it possible to mod someone's sig "troll"? If so, please do this to parent.
Racism is one of the most destructive forms of prejudice present in human society today. It's NOT an issue of partisan politics. I encourage you to step out of your "comfort zone" and find out what's going on.
Seems like the bottom line of expected profit will determine whether a bubble will burst. Besides, what more is an economic bubble than an overvalued profit making mechanism?
2 6991
_ Way_to_Grow_Poor%2C_The_Way_to_Grow_Rich_--_Currie r_%26_Ives_1875.jpg
Profits don't seem to go too well with the open source definition shown here:
http://www.opensource.org/docs/definition.php
Do and should people profit from Open Source? If so, who? and how? Why does Open Source need investment? Why do people/companies need to profit from Open Source projects? Is it inherently wrong to look at profit as a desired end result for Open Source projects? If someone owns and patents an Open Source project or related project derived from Open Source, is it really Open Source?
Another interview with David Skok:
http://www.developer.com/java/other/article.php/6
A bubble cartoon from 1875.
http://upload.wikimedia.org/wikipedia/en/a/ad/The
He who knows best knows how little he knows. - Thomas Jefferson
Open Source is largely sucessful when there is a large enough community of quality contributers. They have seen a problem, and are trying to solve it. A company, on the other hand is management directed. The dichotomy of this problem is that an Open Source Company must have "Management" trying to direct what is essentially a community of volunteers.
From the question on managing geeks (or coders, or cats) yesterday (?), I gather that if you take away the mouse (interesting problem) from the cats (programmers) - they programmers loose interest. Somewhat problematic if your programmers are largely volunteers.
So, let's say you have an OpenSause company. You exist on volunteer programming & documentation, and on service support contracts. Perhaps, to a lesser extent, also on coding paid for features. You can't document too much, or no one will need the support contract. You can't pay for too much code, or you volunteers will feel unappreciated, and fork the code. How do you manage this? Perhaps with a feature bounty?
So, many Open Source companies exist - if only to control the naming rights of their products. Investors see a new buzzword and want to invest. From an open source users standpoint, it's all good: More open source code gets made. From the investors standpoint, it's only good if $$ gets made.
I think it's not such a good deal for many investors, but the investment will get made anyhow - as everyone will want part of the next Zend, Snort, MySql, whatever. However, unless the companies are very careful the investors will find that all their programmers leave for a fork of the project.
my $.02
I think this is an argument beteen human beings who have children and human beings who don't have children. I want to die leaving the world a better place than I found it. I think open source will falicitate this
You're right. Things are much different now. Instead of investors investing in technology they don't understand, now they're investing in technology they don't understand and in companies that have really no way of turing a profit.
And yes, I know that Red Hat is making a few million a year. That's pretty weak proof that the whole OSS + $$ thing can even work on a large scale. Red Hat is still a small company.
Not only is there little proof that open source makes money, there's very little reason to believe that Red Hat will continue to make money. With everything open, there's theoretically not any reason to go with Red Hat support. Right now, there aren't really a whole lot of alternatives, but there may be eventually, if people can figure out how to make a buck from this whole thing.
I don't respond to AC's.
It seems a bubble is created when there are no checks and balances, yet when any bubble pops, that in itself is a way of balancing what is otherwised unbalanced. That said, I believe any person or other entity which receives let's say, new ability, might tend to abuse that ability at first and go through various cycles of progression to hopefully become better in the long run than at first.
Since money, in this country at least, is a motivating factor for our capitalist society, then it stands to reason that anything we can adapt which allows us to reap more benefit of the cash flow and business plans we set forth causing this bubble effect, due to "over use".
That smacks highly of something like the slashdot effect I'd say, just put into different light.
When something new and useful comes along, we all want to use and possibly over use it to what end, not all benevolence, and thus all who partake in it are risking something. This is both good and bad, but hopefully, a much needed learning experience for all of us so that we may better fine-tune exactly what that balance is between too much and just enough.
--SuperBug
To quote from the article:
Until the end of September this year, the amount of venture money that went to companies with "open source" in their business description was $144m (£81.8m). That's more than double the total for the whole of last year, according to research from the National Venture Capital Association, PriceWaterhouseCoopers and Thomson Venture Economics.
In addition, a conservative estimate is that there have been at least 18 open source companies funded in the first three quarters of 2005, compared with 12 last year, a NVCA representative said. Among this year's top investment recipients were XenSource, which landed $23m, and SugarCRM, which got third-round funding of $18.7m last month.
What's the size of the "bubble" we're talking about here? $144M? That's like a spit bubble, heh. I bet if you take MS, Oracle, and Dell's yearly complimentary food, drink, and party budgets, they'd be more than that. Ok well, that's probably not true, but I mean, $144M as far as business investments go is a peanuts. Whether or not this is bad for the OSS/FS community, I don't know. How much OSS/FS software is developed by employees of IBM and other friendly companies versus how much software is developed by some little startup on VC funding? That to me, would be a larger indicator on how "volatile" this is becoming.
Certainly we've seen some investment in open source companies, and a bit of lively trading to control some of the commercial distros. We're still a long way from the giddy days of dot com madness. How many paper open source millionaires ("on paper", don't forget the magic words) live in your neighbourhood? Anyone living next door to Mark Shuttleworth needn't bother answering.
If this was a bubble, I'd expect to see a slew of new distros, all being made to be bought, and being bought faster than people could make them. I'd expect to see some serious money being sunk into projects like MenuetOS, SkyOS and the like. I'd expect to see cash being sunk into moribund sourceforge projects just to get in on the ground floor.
Instead, what I'm mainly seeing is some fairly modest support from industry in those sectors where the sponsor has a well defined use for the software, I see Novell desperately trying to reinvent itself (and it may yet succeed) and a bit of consolidation going on among some of the commercial distros. That could turn into a feeding frenzy as people try to gain control of Linux - if it wasn't for the fact that for every distro bought out, a new one will likely pop up to replace it.
So, no, I don't think there is a bubble, let alone on due to burst. But you know, even it there was a bubble, and just supposing that it was to burst... so what? It's not like Microsoft are going to come along and buy up all the free software after the VCs lose their shirts. The software will remain free, people will continue to work on it, and people will continue to make money offering corporate support contracts.
Don't let THEM immanentize the Eschaton!
The last bubble had a large number of companies "promising" great things - products that never existed. People rushed to invest.
In this case, there is an actualy product.
KeepTrackOfIt.com - Find the lowest gas prices in your area graphically
The key difference between open source and everything else is that everyone gets equal access. This means a product can never fail while there is interest in keeping it alive. Even if the party producing it quits, the product continues to be available (through the right to redistribute), maintainable (through the right to read and modify the source), and even improvable (nothing stops you from making a new, better version).
Whether businesses that try to make money off open source can fail is another matter. I see it this way: open source exerts a downward pressure on software prices. This means that it tends to make businesses that try making money by selling software fail, but it provides businesses using software (and what business isn't?) with financial benefits. This, and the properties mentioned in the previous paragraph, is where the business benefit of open source is.
TFA seems to be asking whether venture capitalists can expect to see returns on the money they invest in open source startups, or that it's a bubble that will burst. That depends on how you see it. If they want these businesses to generate money that flows back to them, it's probably a bubble, because these businesses are trying to make money exactly in the way that is likely to fail (see previous paragraph). However, the open source software these companies make will be around, no matter if the company persists. So the invested capital is never really lost, as it would be if the company had been making closed source software (and failed to pass on the rights before closing down, as too often happens).
Please correct me if I got my facts wrong.
If an Open Source Bubble "bursts," and there's less new Open Source software for me, it will mean that I'll have to go back to pirating software 'cause I sure can't afford Closed Source software prices...
...and I finally got my computers running 100% legal software...
TRHOnline - Staggering Towards Brilliance
If you think this a bubble, you just don't get it. This is a fundamental paradigm shift. The secret to wealth without effort has finally been found. This is totally, absolutely different from the Internet bubble, Florida real estate during the 1920s, multilevel marketing, pyramid clubs, and arbitrage of international postal reply coupons. You see, it's completely legal, because you give the government your social security number so that you can pay income tax on the fabulous wealth this system generates--guaranteed!
This one works. You just have to dare to be great. Fire your boss and never work again! It can work for anyone. You can do it from your home in your spare time. And for $19.95 I'll send you absolutely free a valuable envelope packed full of information on how you can buy our videotype seminar series. Try it at absolutely no obligation. If you follow the simple step-by-step instructions and, after three months you are not making $2000, $3000, $5000 a month, just send a letter to our PO box or call our disconnected phone line and we will cheerfully refund your money.
"How to Do Nothing," kids activities, back in print!
We'd better all switch to paid software to avoid the burst!
My tech blog
Nobody but nobody knows if there's an Open Source investment bubble brewing because nobody knows how many Open Source installations are going in. You can't know because there's no licenses to count; take this CD and copy the hell out of it. There's no visible paper trail, no visible timetable, no visible anorexic blonde mouthpiece from Marketing. And it scares the crap out of the Big Boys. What you're seeing is nervous money from people with too much money and a determination not to miss the next VA Linux (or the next Microsoft.) Bubble Schmubble, the salient point here is that none of the traditional pipelines of rumor and stats is worth a damn right now. It's a stealth revolution alright; by the time it surfaces for the Fat Cats playing Pebble Beach or Coronado it will be too late.
I think this is more of a give a little get a lot scenario, not a bubble. If you (company A) give 1000$ to open source solution X and company B gives 1000$ to open source solution Y then both companies who donate (and presumably use the software) benifit. This is just a win win thing for people and they are realizing it.
And so, what happens to the value of Company A's previous software-based competitive advantage? That had to have gone somewhere (it did: it's gone). In this situation, software actually becomes LESS important to companies. OSS software developers are programming themselves right out of a job. If companies don't get any competitive advantage from their software anymore (assuming that competitors are using the same open source software), then the software becomes just another cog in the wheel.... important, but not important enough to pay a premium for. It becomes like electricity... a cheap commodity that while important, certainly isn't given a second thought. People make a living producing electricity, but very few get wealthy, nor is it an exciting, innovative job.
I don't respond to AC's.
These open source startups don't need venture capital like they used to. Servers are nearly free on Ebay, most of the software they're using is open source and free as in beer. That leaves investors standing around with their cash in their hands, not knowing what to do. There's even talk of some giving the money back to investors. This is a supply and demand issue. Too much money chasing too few ideas.
The only money to be made in open source is in hosting and consulting which really doesn't have a heck of a lot to do with the open source idea anyway. By that I mean you can apply the open source philosophy to a business that has nothing to do with software.
What if Digg added local news and a Slashdot inspired comment karma system? ---
http://houndwire.com
Three very simple rules will help you:
1. Invest in companies that know how to make money by being paid by a customer to perform a service.
2. There are usually minimal or no barriers to entry in the open source universe.
3. Check community involvement. A small community or lack of one indicates a lack of mastery of the open source model.
BTW: coming out with a closed source derivative product can be risky: sometimes you get forked and out developed.
-- $G
You don't understand ... they're avoiding noticing the current bubble (the US Economy), because they can't do anything about it, and it's quite scarey. To do this, they're looking for scapegoats to blame that are things they CAN do something about, and which aren't so scarey.
I think we've pushed this "anyone can grow up to be president" thing too far.
FOSS is not a business model. It is way of licensing code that protects the user's ability to user and modify the software. It can also be seen as a vast body of resuable code for projects with compatible licenses. In the case of GNU/Linux it is also a software stack with $0 licensing fees, so conceivably it only costs as much as it takes to get it installed, maintain it, and extend it for a given business's purposes.
;-)
Paid support and customization of software IS a business model. It's called "software contracting."
That business model is well understood. It can be profitable, and can sustain most salaried engineers at a rate ABOVE their current salary, but not usually as profitable on a large scale as a software product company can be, because as part of the bargain we choose not to leverage the amazing power of government-granted monopoly profits.
However, given the success of the FOSS development model I wouldn't give mass-market proprietary software more than another 20 years unless the government(s) intervene to stop it, or consumers buy into locked-down platforms that will only run signed code.
From the programmer point of view it doesn't really matter. We seem to get paid the same whether our customer can make billions off of the bits we create, or only gets to charge a markup on our rate. Weird, huh?
-- John.
A business model can be based upon selling items/services/etc related to systems developed via the Open Source model, but they are not the same.Given that Linux advanced to it's current state almost 100% via the "hobbyist" and "tinkerers", is that a bad thing?
More funding is always nice. It allows people to devote more time to it. But it won't make or break a project. The community is what decides that.Again, if that happens, it is because of a failure of the business model, not the Open Source development model.
History is littered with failed software companies that used closed source. Why should Open Source guarantee success? It's all about the business model.And here is what I say
Look at the business plan. That is what will make or break the business.
Considering the impact of free software on the industry, $144 million is pretty small stuff. If a bubble that size bursts, will anyone notice? People will notice if Google goes under with their $15 billion dollar valuation based on a free service, or if the "network" television companies go under as a result of the Internet. Calling $144 million a bubble of significance is just headline hunting.
Free software is maturing and growing still. In ten years....
Hans
DRM is entirely a case of security by obscurity. The DRM decrypters remain proprietary, so you can't run/open/play/view the file without those. If open source were to adopt DRM, people could simply add hacks to the code to output the file in a non-DRM format, and it would therefore be useless anyway.
Look, I like Google as much as the next guy, but they are extremely overvalued. No they are not eToys and will probably not be on FuckedCompany.com any time soon, but they cannot justify their current market cap. And no, we are not in another major stock bubble. Where are the billion dollar aquisitions? Where are the companies not making any money being sold for jillions? Well, other than Google?
... that exists is the aneurism that's growing in my brain because /. keeps getting "news" about OSS from friggen ZDNET.
Haha, and how fitting that the turing test to make this post was "travestry".
...Rob
The American Dream isn't an SUV and a house in the suburbs; it's Don't Tread On Me.
The sky is falling!
C17H21NO4
Hi there
I've working on a project designed to bring together various open source software applications, add useful extensions, add documentation, and provide both free and commercial support packages. One of the things we're working on at the moment is Mobility Email (http://mobility.shaneland.co.uk/ ), a portable version of Thunderbird.
I believe that we can find a way to balance a genuine open development model (where source code is altered with a community, people share ideas, and solutions are evolved rather than dictated) along with a combined free and commercial (business) support model.
It takes a level head, and planning with realistic goals. We're working with Firefox, Thunderbird, OpenOffice, NVU, Gaim and FileZilla. We're not trying to reinvent the wheel, but rather to create a unified (community) front that is sponsored by a company that will make money from passing on expert advice to companies who wish to adopt these technologies.
Regards
Shane Coughlan
Mean while the actual financial love affair and cash influx could of course bomb. Then things would be just like they were for the previous twenty years just with the aftermath of an expansion bulge, lots of new code and tools sitting around forming part of the common code available for use.
Worst case doesn't sound too bad?
This is not a new topic many big guys have already used the Open Source to make profit. Take a look at Apple's Darwin project or Novell(SuSE). These companies can now focus more on there business's goals instead of working out bugs within operating system and spend extra resources to devote to coding the OS ,instead ,they use the Open Source Community to do it.
Bubbles happen when people oversell something. The key thing everyone needs to realize is that Open Source isn't a 'magic bullet' or a 'plentacia'. Work, time, and money, in short capital, needs to be spent to use Open Source right along with every other closed source solution. I believe in the long run for various problems Open Source is easily better investment. There are other problems where Open Source will have a hard time showing return on investment. In either event, one should never oversell the technology.
So here is the queston: Is any other vendor out there creating a Dot Com bubble? Or could they have created the previous Dot Com bubble?? Yes I'm thinking about Microsoft: Did MS oversell its technology in the 90s which allowed people to believe they could build anything cheaply, securely, etc?
Are hysterical investors acting like there is some Open Source land-grab going on like they did when the WWW was picking up? Are they again willng to burn through billions of $$$ to try to gain some sort of elusive Open Source market share? Is the Dow Jones shooting up 150 points a day with commentators pointing out that Open Source tech stocks are behind the rallying? Are the idiots-that-be talking about gambling the non-existent U.S. Medicare "lockbox" funds on the stock market again due to the strengths of Open Source companies? Nope, I don't think there is a bubble going on.
...wouldn't it be a "Dot Org Bubble" ??
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There's no OSS bubble, just a few VCs investing in the area. Some of the VCs are very poor at picking winning technology, OSS or otherwise, so they'll die. But it's nothing like the DotCom bust and it is certainly nothing like what will happen when Microsoft stock loses its inflated value.
Ideologies don't matter. Business models don't matter. There is only one rule. Buy low; sell high. People that pay more for something than they should because of a particular ideology are what the rest of us call fools. Don't get me wrong. I think Novell is going to surprise everybody. But I'm not going to buy Novell stock because of Suse. I'm going to buy it because Suse is going to make them a ton of money.
If you read the section of the Cringley article on VC funds ending their lifespan and the payback required by the fund managers if the money is not invested, the flurry of investment in the latest "fad" seems to make sense.
. html/
I do not think that open source is a fad by any stretch, but if the fund managers can sell it to their clients as valid VC investment option, they will.
http://www.pbs.org/cringely/pulpit/pulpit20050210
Bubble... Probably not...
Fund managers trying to prevent paying back money alrady spent... Likely.
As long as the OSS community is allowed to exist, then we will continue to see projects.
If someday it becomes too hard ( politically, via IP suits or financially, via DRM entry fees ) to have a community, then major OSS projects will dissapear and we will be stuck with mostly $ software.
---- Booth was a patriot ----
Yet more proof people do not understand open source, let alone the principles of free software. Software and computers are not just about business - they are not simply the functions of capital and labor flow. Software is changing the way people conceive of property and value, and open source is critical to that change. Business analysts would be the last people to get this point.
Was the printing press just about selling more books?
It MUST be a slow news day.
Up to here I would have easily won a round of bullshit bingo. There are two kinds of Open Source projects: Community projects that grew to useful software and those started by companies that could have done it as closed source but opensourced it for some reason.
The projects that made Open Source what it is today belong to the first class. Everybody who mentions "business", "investment", etc. in one breath with Open Source belongs to the second that would not exist without the first. Open Source is much more than "cheap support" or "free code review" and I hate it when people see it that way.
Free as in freedom, let's not forget about this, even if one can make money from OSS. To be strictly back on topic: It's no bubble as long as clueless investment bankers don't pour too much capital in projects just because they are labeled Open Source. has given us a bubble (akin to the dot-com bubble) that is about to burst. The counter-argument is that the increase in investment is just the natural progression of a robust business model whose time has come. One point that few people, whatever their viewpoint, could disagree with is that the key to a financially successful open source project rests with the community, rather than just the technology." Open Source Forming a Dot Com
On se Internetz nobody noes your German.
Dot-com Bubble: Revenue without products
Open Source Bubble: Products without revenue
It's more efficient! Since the product's already selling for zero dollars with a margin of zip, there's nothing to inflate and there's no bubble to burst! All money can do is distort the normal market forces that operate in the reputation-and-effort-based open-source economy. Maybe that distortion will be temporary and people will talk about an "open source bubble", or maybe it'll be permanent, but it's something that's happening outside the open source community for the main part.
Open source was around before heavy investment, and should that investment vanish, open source will still be around. Slower, and more part-time, but still around.
Laws do not persuade just because they threaten. --Seneca
Lets name it GNU/Bubble.
Open Source Business Plans should be Open Source :)
http://22surf.org/
22surf to Present at OSCOM4 (Open Source Content Management) in Zurich.
22surf: An Open Source Business Plan for Open Source CMS & DRM
OSCOM Track: Business/Legal
Title:
22surf.org: An Open Source Business Plan for Open Source CMS & DRM
Presenters:
Dr. Elliot McGucken: Founder of authena.org, 22surf.org, and jollyroger.com
Chris Mollis: Founder of objectlab.com and openipmp.org (Open Source DRM)
22surf Summary:
22surfing is a sport. It's for individuals and businesses alike. It's about surfing along with natural laws like Moore's Law, Metcalfe's Law, and intellectual property law towards one's dreams as a creator, hacker, and entrepreneur. It's about riding technology's bleeding edge out to where artist-hackers, writers, movie directors, photographers, and musicians form their own media archives and markets, as Open Source Content Management Systems (CMS) surpass yesterday's proprietary solutions.
Digital rights management (DRM) is the holy grail of the internet. It is a multi-billion-dollar, ever-expanding market, and an apt solution will be invaluable to the livelihood of content creators, programmers, and media companies. The 22surf business plan for generating revenue with Open Source CMS and DRM has been Open Sourced in an effort to foster discussion and inspire fellow artist-hackers to build businesses. Rather than proposing another CMS, 22surf seeks the best route to syndicated commerce and DRM across existing CMS.
An Open Source solution to DRM will be important to artists, musicians, and creators, to the Open Source community, and to DRM. If only proprietary methods for DRM are developed, then corporations will be granted more power over creators, and too, it will be difficult to realize universal, robust standards, as hackers around the world won't be allowed under the hood to improve the system. Furthermore, an Open Source solution to DRM will provide countless business opportunities and jobs for Open Source programmers with record labels, stock photography archives, and movie studios, all of whom will save money.
An Open Source solution to DRM and syndicable media markets is a natural destination for the Open Source movement. DRM and syndication are based on methods and algorithms that must be transparent in order for DRM and syndication to be trusted, secure, and universally accepted.
The internet favors the direct connection of the creator and consumer. In the emerging webscape defined by the Open Source CMS renaissance, creators will be able to define the rights determining how their content is used, and consumers will be able to support their favorite artists and musicians without large corporations taking a cut.
Open Source is granting the creator the power to create their own media markets. Oscommerce is fully capable of handling pay-per-download models alongside physical media sales, bypassing the often greater than 50% cut into an artist's profits that older models centered about large, proprietary online markets claimed. Open Source CMS also allows the creator to maximize their own brand rather than building amazon.com's or barnesandnoble.com's. Future 22surf models are explored, including scenarios wherein open DRM protocols such as openipmp and Media-S are married to Open Source CMS such as xoops, postnuke, tiki, gallery, and oscommerce to provide content marketplaces connecting creators directly to consumers.
22surf encourages artist-hackers to download the 22surf business plan for building profitable archives and marketplaces with Open Source CMS, change and build on it, and join in the following revenue streams: 1) sell keyword advertising throughout free OSCMS hosting services (blogs, galleries, etc.), 2) sell advanced hosting options/extra disk space, 3) charge 5% on content marketplace transactions, 4) charge 5% on Open Source Arts freelance services marketpla
They wouldn't do a .bomb twice, would they? They had to have learned the first time!
Oh, yeah... G.W.Bush. Never mind.
-- I have a private email server in my basement.
And don't forget Corel, which was at 4 in June of 2000, announce it's Linux distribution, shot up to 29 by December with all the other Linux companies, then fell down to 3 by June of the next year.
The cake is a pie
In fact, before I tackle most tasks I check to see if there's a free open-source project that has already solved the hard problems.
And if it hasn't been solved, what do you do? Let me guess: You solve it yourself.
But I have often wondered -- who are these people that pay (in money or time) to develop all this stuff?
The same people who have always funded the majority of software development -- companies that have a specific business need that no existing software solves. Most programmers are employed to create custom software. So are they and will be in the world of open source.
I'm really glad they do, but I hope all the "funding" doesn't all dry up someday.
That will only happen when there is free software that does everything that any business ever needs. Somehow I'm not too worried about it.
I'd have to do all that work myself!!
And if you were not a programmer but an employer, you'd hire a programmer to do it yourself.
The only way free software hurts the ability of programmers to get paid is by reducing their ability to get paid for doing something that someone else has already done. Instead you get paid for doing new things (using plenty of existing tools, if you like), which to me sounds vastly better and more efficient. If getting paid for reinventing the wheel (the same wheel, not a better one) is the only way to get paid, then I'd say programming is no longer a worthwhile profession.
Like I said, I'm not too worried.
The enemies of Democracy are
Open source is a "success" because it's FREE !!! Put a $ tag on it and pretty much everyone will look elsewhere. It's just dumb luck that anyone can make a business work in that sort of "economy". Dreamers is what the rest are.
... is based on the technical merits of their products. Haha.
With the dot-coms, when they went belly up, all the investments were lost. With open source, the results of every man-hour invested in an open source project are availabe forever and for everyone.
So, venture capitalists, do your worst and bubble away; we love you.
"One point that few people, whatever their viewpoint, could disagree with is that the key to a financially successful open source project rests with the community, rather than just the technology."
Nah, I'll disagree with that, on the grounds that everything can be disagreed with.
Wasn't there a news report a few days ago about how Japan is going to have the technology by 2012 to build a movie set that looks like the Moon?
http://paulgraham.com/vcsqueeze.html
It's about Venture Capital firms feeling pressure from many different sides, one of those is open source.
"how can they call it a MINE if everything here is THEIRS?!?!" -Straight Jacket
"In particular, they have to combine their pursuit of profit with active involvement in a vibrant 'community' of open source users, some of whom are not paying customers. Not all open source companies are hitting the right balance between commerce and community, analysts and executives said."
Some of whom? Most users of OSS don't pay for support. The balance is that the _corporate_ customers pay through the nose - not because the costs are high, but because they're corporate, and need a LOT of support relative to non-corporate (say 1000 support requests per day for a good-sized company, not to mention potential hardware sales, as well as setup fees), and are more than willing to pay for it - not being the type to dig their fingers in and fix it themselves.
In addition, overhead for programming staff is lower for an OSS firm than for others; most core (read: linux/bsd kernel, apache, mysql, samba, ad inf) software is written by others, and usually by volunteers and those hired by other companies to advance their own interests. The OSS company really only has to work on integration-level software.
So, given that Open Source has a workable business model - as long as it's well-marketed - the real question is whether the venture capitalists are investing in sensible projects with good individual business models (Mozilla Foundation) or in some rediculous idea someone had in the late 90's (shipping management company offering free shipping for over a month).
110100 1101000 1101000 1100110 0 1101111 1101000 1100011 1
1.Create Open Source Project
2.????
3.Profit!!!!
Although it is true that Open Source Projects will prevail,... we can't rely on the UGT (Underpants Gnomes Theorem) won't always hold true for profit:
Step 1: Steal Underpants
Step 2: ???
Step 3: Profit
Then FLOSS protects the source code assets against the consequences of the startup that initiated the project going belly up; anyone can pick up where the on-staff developers left by forking. This fosters the Long Tail approach as well as protects adopters. This is the kind of sustainability we all dream of; it protects the investments and data of businesses and governments as well. Everybody wins.
Software is not supposed to be about how to work around a useability issue. - Ken Barber
That was soooooooooooooo insightful! FUCKING MODS!
People from India, viet nam, China, etc.... do not want us to expose their intensions! Third World Fuckers!!!!
Work'n my way back to you babe.
FUCK YOU!