Is Open Source Recession Proof?

DaMan writes "ZDNet asks Is open source recession proof? 'So, how might a recession affect open source software? Well, first off, I think that any business model that relies on volunteers could certainly see interest decline if times get tough. There are a lot of businesses that rely on people working for them for free because they get a pay check somewhere else, and I think that a recession would make people question working without getting any dollars in return.'"

Comments

Then you are doomed to fail.

[LWATCDR]

"There are a lot of businesses that rely on people working for them for free because they get a pay check somewhere else, and I think that a recession would make people question working without getting any dollars in return.'""
If this is your business model then you are doomed to fail.
FOSS is supposed to involve you getting a return for you effort. You should be adding features that your customers want for pay or adding features you need for your own use.
That the idea of how it is supposed to work.
This is one of the reasons why FOSS will not replace all closed source software. Too many freeloaders.

Re:Then you are doomed to fail.

[SatanicPuppy]

Don't discount people who just deploy OSS for a living. I know a guy who probably hasn't contributed 10 lines of code over his career, but who is so effective at taking poorly documented OSS projects and making them function beautifully in commercial deployments...He makes a good living, evangelizes the hell out of OSS (he's a true believer), and drives money back into the projects.

Most critically of all, he has the ability to see the flaws, and to visualize the next step that would make the project into something awesome. People like that, who know the features that really need to exist in the project, are almost more important than the people who end up actually coding the feature in. I can do the code, but the spark of genius behind a really good feature...That's special.

Depends on your definition

[PenguinBoyDave]

If you are talking about the development and evangelization of Open Source, then I would say yes. People are going to volunteer regardless. However, when you are talking about companies that sell or service Open Source software, then I would say no...it is not recession-proof. Economics are economics, and money is the same everywhere. Where there is a crunch, money doesn't flow as freely, and both Open Source and proprietary models will suffer.

Now...had they have said "Is FREE software recession-proof" then I would say, "yes...it is."

Or the other way around...

[pipatron]

When I was unemployed I had a lot of spare time to code on free software. Now when I have a full time job - not so much.

You don't need an income to contribute to free software, just a computer and usually some sort of internet connection.

However: Notice how I use "free software" instead of "open source" - When the Web 2.0 bubble comes, it doesn't matter if you can just look at the source code from the tool you used after the company went bankrupt. You need to have the legal rights to keep modifying it and/or let someone else do it.

Just the opposite

[Bruce Perens]

What was the best thing that happened for Open Source on Wall Street? 9/11.

Of course nobody wanted it that way. But when some Wall Street firms lost data centers and desktops, Sun, IBM, and HP couldn't make hardware fast enough. So, beige boxes all over the east ended up in ad-hoc data centers, running Linux or BSD. And surprise, they ran as well, often better than their predecessors.

Open Source is going to do well whenever IT can't pay a lot for software and has to stretch its budget. Good times might be worse for Open Source, but I don't see them being terrible for it.

Bruce

Re:Just the opposite

[PHPfanboy]

I'll second that. For PHP it wasn't so much 9/11, but the recession that came after it which drove a lot of LAMP deployments (which is what I watch). IT budgets were slashed, big projects were killed and small, cheap, business-critical implementations started mushrooming as part of the "No Purchasing Department" necessity. Then people realized that what they'd hacked together with FOSS was good enough for the Perpetual-Beta world of the web and, at least from the PHP perspective, the rest is the hockey-stick growth history we've seen since 2002.

Re:They just don't get it.

[yerM)M]

Agreed. In fact from my own professional history, if you have a job and convince your employers that open source is a good idea, when they fire you you can take your work with you. Open source is great job security from the perspective of keeping your toolset alive from position to position.

Could go both ways,. . .

[cashman73]

If the recession is relatively short, and some folks are out of work for only a few months, it could have a positive impact on various open source projects, as folks work on those while receiving unemployment checks. But if the recession is longer, the even the open source market could be hurt, as people are not going to want to work for free too long, and really need to start actually making money.

Recession. Where?

[Peer]

Sure it is... maybe this is a nice moment to remind everyone that the world is bigger than just the USA. There's other countries that will trive in spite of any recession in the USA.

There are loads of projects that are being run outside of the USA (Ubuntu etc.)

Re:Ways a recession could affect Opensource

[Anonymous Coward]

You sir have never worked on OSS if you think #3. Depressed programmers are the hardest working. Whats terrible is when they find love. Everyone whos worked on a project knows what i mean. Depressed coders stay at home all day and code their brains out. Ones who have found love are gone to you forever in the real world.

Open Source Work for Hire?

[Dareth]

If an employer pays you to work on an open source project, but they never distribute that project since it is for in-house use, can you legally take your work with you when you go? Experience, sure they can't keep that, but the actual code, changes and fixes, would belong to the employer?

Re:Ways a recession could affect Opensource

[drmerope]

Employees of major corporations assigned to opensource could be laid off or reassigned to directly profitable projects.

Bingo. This is precisely what happened to the FreeBSD probject when the dotcom bubble burst. Half of their developers got laid off in the middle of major architectural work (fine-grained locking). It took years for them to recover. Conversely, Linux in 2000 was much more of a hobbyist world (unlike now) and kept going without a hitch.

OSS will boom in a recession

[Anonymous Coward]

First, I don't see a recession hitting tech. This is not 2001. I'm at a growing company and I can't hire the LAMP developers we need even with an attractive package.

Secondly, in 2001, when my company went bankrupt under the debt load of capital investments it made that didn't pan out because of the crash, I took time off (I could afford it, thankfully) and decided to write an e-commerce package (since I knew a couple people who wanted to use it). I released it open source; some people downloaded it, used it, and referred their clients to me for more advanced consulting. I built up a ~fulltime consulting practice without an ounce of any promotion outside of that release, making a pretty good rate. Eventually I was offered a job that was too good to refuse from one of my clients. Although I stopped releasing versions open source because I got about 100 tech questions for every patch, I still think of that experience as an "open source success story". People used the software, I got a consulting practice and a pretty good gig, all doing something that was interesting to me.

Re:Recession-proof is a fallacy

[Anonymous Coward]

Of course, the reality is that the central banks have been creating credit for one specific reason: to transfer wealth from the poor and middle class to the bank-connected elites. You seem to have a very odd view of how the economy works. Among other things, you imply that "banks" are owned by "the elite", whereas in reality the trend over the last 100 years has been for increased ownership of companies by "ordinary people."

I'm certainly not part of the elite you speak of, yet I own a stake (they are called "shares") in various companies, including financial institutions. I make money from interest on my investments. Yes, that money I'm making partially derives from the interest on credit that other people are paying. That makes me neither evil nor elite. That's just how the economy works.

The fact is that the vast majority of people are included in this system of credit transfer, whether through explicit investment (e.g. playing the stock market), or through other means (anyone with any kind of retirement savings). Yes, the rich control many of the resources (by definition) but wealth and corporate ownership among the lower and middle class have been increasing, not decreasing, over time.

The wealthy have been hoarding money for decades. Stick it in the mattress, in the vault, anywhere but in a savings account or in the market where the money would stay in the economies, keeping them at least operating. Are you seriously saying that an individual would be better off sticking their money under the mattress rather than investing it? If you don't invest your money, and earn interest above the rate of inflation, then you are actually losing money over time. Even when the interest rate drops, it never drops as low as the "money in mattress" level, which is 0%. I assure you that the "rich elite" are reinvesting every penny they get, thereby contributing to the economy.

Yes, the wealthy have been hoarding money for decades... for millenia in fact. The only difference is nowadays the non-wealthy can, and do, hoard money as well. What's wrong with that, exactly?

Re:Recession-proof is a fallacy

[dada21]

That's the silliest thing I've seen in a while. Uninvested money just shrivels through inflation. Even in the "buy in down times", almost no one makes money that way, it's a way to lose money.

Inflation, meaning the expansion of money supplying, does devalue hoarded cash during bubble periods. But during the bubble popping periods, after the dead cat bounces, bubbled assets tend to crash below their theoretical equilibrium values, bringing the hoarded cash value to a stronger level.

My home at 1X income this year was 2.5X income in 2005. It fell 60% in dollar value. We paid cash, too, saving us hundreds of thousands in interest over the next 30 years.

My hoarded cash lost value for 3 years, but now its worth 60% more in the housing market.

We also hoard mostly in gold, but since 2005 over half our cash hoardings have been in Euros and Dirhams. I sold all my Euros to buy the house.

Recessions seem bad for gold, but even if its dollar-value falls, its buying power tends to stay solid. Since my income should go up 20% in 2008, a recession in most areas would lead me to hoard even more, maybe 60% of my post-tax income.

Remember, stagflation is good for hoarders.

Re:They just don't get it.

[Coryoth]

Actually, the US dollar is plummeting because of a very costly military expense...Oil prices skyrocket because of huge demand (China)...But this has been going on for years. Indeed, it's been on a slow but steady boil for a long time: I wrote about these problems back in 2004. What I find more worrying than the problems themselves, however, is how blithely they've been ignored for the last 5 years or more. It really didn't take a genius to see these were potential issues that were only getting steadily worse (if I could see it, surely anyone could). It required little or no insight to see that, while they weren't presenting an immediate problem, if nothing was done they would simply simmer away under the surface getting worse and worse and waiting for some catalyst to really bring them to the fore. Despite the obviousnes of this, however, US politicians and US media seem to have been happy to largely ignore them. Indeed, even with the arrival of an appropriate catalyst there seems to be little or no interest in the deeper underlying issues that, as you say, have been going for years.