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Stanford Teaching MBAs How To Fight Open Source
mjasay writes "As if the proprietary software world needed any help, two business professors from Harvard and Stanford have combined to publish 'Divide and Conquer: Competing with Free Technology Under Network Effects,' a research paper dedicated to helping business executives fight the onslaught of open source software. The professors advise 'the commercial vendor ... to bring its product to market first, to judiciously improve its product features, to keep its product "closed" so the open source product cannot tap into the network already built by the commercial product, and to segment the market so it can take advantage of a divide-and-conquer strategy.' The professors also suggest that 'embrace and extend' is a great model for when the open source product gets to market first. Glad to see that $48,921 that Stanford MBAs pay being put to good use. Having said that, such research is perhaps a great, market-driven indication that open source is having a serious effect on proprietary technology vendors."
Reminds me of Microsoft's strategy. Except for the "judicious improvement," and it doesn't seem like it will work for them in the long term anyway.
The professors advise 'the commercial vendor
So many obviously smart people confuse proprietary with commercial. The two are orthogonal. Back in the 90s this might have been academic, but there are now many commercial open source companies. Get with the program.
How we know is more important than what we know.
Knowing the enemy's potential avenues of attack is a wonderful asset. It makes counter-attacking and defending much easier.
people write papers on how to build nuclear bombs and nobody complains. open source advocates are little girls.
What happened to all open source software is crap arguments?
Surely companies likes Microsoft were not jesting!
Change is certain; progress is not obligatory.
... to a certain extent, anything that's not free (free as in beer) and has utility will become free to certain users?
Enlightenment
Of course, then the commercial vendors will turn to DRM. Then the freely obtained product will become superior to the one obtained by buying it from the vendor. With the vendors focused on the loss of sales, FOSS will continue to innovate.
Good luck, even with that "embrace, extend, extinguish" in effect.
I'd actually be disappointed if information like this weren't being taught in Silicon Valley!
unless your product is targeted at such a small subset of users that noone in the OSS world would bother to create a competing product there will always be some geek out there willing to dedicate all their spare time to create something that will compete with your product... for free. What proprietry vendors need to do is charging for software as a service and provide support packages that the OSS world don't bother to do.
-- Sex is the antonym of pringles. Once you pop it's time to stop.
In the long term, what happens if all software ends up being free? Wouldn't there cease to be many programming jobs where there once were? Wouldn't that lead to lower paying programming jobs in turn leading to less cs graduates and lower quality software? I know some companies do alright supporting products they've written and give away freely, but I can't see that extending to applications beyond some mission critical business system type things. I've long wondered things such as this. OSS sounds great at a glance, but I really have a poor concept of where it will go in the long run. I like writing software, but I also like being able to pay my bills.
They should have left their research closed. Now anyone can take their research, reverse engineer it, and repackage it under a Creating Commons license.
I'm happy to see that the suggested strategies are ones which carry significant drawbacks. Segmenting markets and keeping everything closed does indeed give you control, but it also slows the very network growth that makes products become successful. And it frequently leads to user frustration (because of, for example, DRM, or the lack of support groups, or the inability to find or construct fixes/hacks as needed).
This is good news in the sense that any strategy to fight open-source means that you emphasize the gap between open-source and closed-source products: the open-source product's advantage is the openness, the community, the ease of distribution, the non-naginess, the network effects, the hackability... and the more closed the closed-source products try to be, the more these items become product differentiators, which the open-source product can point to as big advantages.
So, I do hope closed-source projects go ahead and implement those user-hostile strategies. It will only serve to make open-source products look that much better by comparison. As other posters have pointed out, there is no fundamental divide between "open-source" and "commercial". So I would think the better strategy for MBAs thinking about open-source is "if you can't beat 'em--join 'em". Or in other words, why get involved in closed-source business ventures when an open-sourced equivalent inherently leverages network effects?
Eat a bag of dicks.
Sincerely,
Anonymous Coward
Stanford, the birthplace of SUN, one of the renowned distributors of a once true and mighty closed and proprietary Unix, that almost fell off the face of the planet in part of it starting to become irrelevant compared to open sourced OS's and systems (Linux, BSD, etc).
The SAME Sun, which has now open sourced almost their ENTIRE IP portfolio in the Open Solaris project, thereby bringing relevancy BACK to Solaris and it's suite of products.
The same Sun which utilizes hundreds of code donors to it's projects, and big communities around storage, ZFS, etc.
Closed, commercial systems have a place, and many of them do well, but when markets change, can they change quickly enough? Lessons show us that they cannot change quickly enough. Or do the closed proprietary systems try and change the market the suit their needs?
Look at IBM, HP, Sun, and even Dell now relying on open *nix systems driving huge sales numbers.
The markets have changed, its those who do not follow trends, or fight the trends who become irrelevent.
The open source model will probably change in a decade, or a century and it too will have to change.
The paper is just a way to appeal to stiffley business suit class of people afraid of change.
Brent Jones
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if they also taught a course on open-source economics. I.e., how you can make a successful business through the selling of services. It would be useful, since I get the impression that a lot of the folks who are open-source advocates really don't have much business sense. That's not meant as an insult--I know my business skills are mostly lacking. It's a big part of why I wouldn't start a business myself. It might have the added benefit of giving some of the commercial==closed-source people some ideas on where it can make sense to use open-source in their own businesses. I work with a guy who can't understand why anybody would ever contribute to open source. He sees it as people giving away valuable brain juice for free.
From the press release that this guy links to (the paper is actually here):
A recent paper on this topic by Mendelson, coauthored with Deishin Lee, PhD â(TM)04, now a faculty member at Harvard Business School, is not a how-to manual for hard-pressed executives. Rather the researchers have built a theoretical model explaining the choices open to commercial firms. âoeAlthough open source is the lead example of our work, the principles certainly apply to other businesses, including, for example, the media business,â says Mendelson.
Heaven forbid that somebody actually study how businesses choose between free and proprietary software! That's of no good whatsoever! And of course free-as-in-speech definitely does not extend to a university allowing its academics to publish material which might be bad for open source. Clearly Stanford should've had these two men killed and fed to rabid, pestulent chipmunks, rather than allow this affront to reach the press.
No kidding!!! What do you say at this point?
The web is a gift economy in many ways. Pay for doing a web search? Ha! Pay to translate Spanish into Finnish? Hunt around a little.
The law of supply and demand is warped when the supply (of zeros and ones) is effectively infinite. DRM exists to artificially set the supply back to a finite amount. I'm not making a value judgement about DRM but it seems like a difficult battle to win for its proponents.
I think we've been in that penultimate step for a while now. Here's hoping Ghandi was right =)
It is pitch black. You are likely to be eaten by a grue.
The two strategies presented are not strategies against software.
The first, embrace and extend is a play against already established standards, and usually is applied to protocols and APIs but not to package software. Most successful E&E campaigns have been against standards implemented in closed source systems. Most of MS success was before the rise of Open Source as a viable model. Generally E&E fails against open source competition (see firefox, Apache, Linux v Unix, etc...).
The second was just a trashcan "make a better product" and "hide it from the competition" kind of suggestion. Oh, and segment your market better... problem is that it's assuming that your open competitors can't make better products or segment better.
-- $G
Even if consumers do not end up adopting the free product, it can act as a credible threat to the commercial firm, forcing it to both lower prices and invest more in product innovation
-Haim Mendelson
Surely if there is a desire for a product then the market will speak for itself - maybe more market research would be a good idea.
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and when they graduate they can take one of those 20/hr jobs at bestbuy incouraging the use of Vista
The paper is freely available for everybody to learn from, in fact the Jan-Feb 2008 issue is fully of very interesting article (what month are we in now?).
The slashdot summary author (mjasay) appears to see the world through a lens which makes the developers of open source software victims of some nasty MBA conspiracy.
The academics who wrote the underlying article go out of their way to say that their writings are not a 'how to' manual for MBAs, and that open source software is only one example.
The article is simply a recent take on 'How to compete with free,' an important MBA marketing topic for decades. 'How to compete with free' can be considered a subset of how to compete in general, and the gist of any marketing solution to 'how to compete' will be based on building value in the product.
One method to build value is to increase switching cost through lock-in. Even free / advertising supported services do this: my.yahoo, iTunes, gmail, hotmail and countless others.
If you read the underlying academic article, you just might notice that most of the tools presented now are analogous to the tools presented at Sanford in the early nineties to the MBAs who eventually went on to Coke and Pepsi to fight the scourge of FOSW (Free Open Source Water).
Open source water survived just fine. As long as open source software continues to offer value, it will continue to thrive.
Marketing is marketing. MBA courses are MBA courses. Same shit, different year.
__ Someday, but not this morning, I'll finally learn to use the preview button.
For Pete's sake, I like open source software as much as anyone else, but shut up already. Yes, really. Stop pushing open source on everyone like it's the only right way of doing things. Not every software solution falls neatly into the category where software can be given away freely.
What is it with this more-or-less recent bashing of anything that is not open? NOTHING else in life is expected to be given away for nothing, yet here we are in a time where certain people just can't deal with the fact that in life, you pay for products. Yes, there are many benefits to opening the source of your product. But it also provides your competition with 100% insight into your business.
Seriously, I just don't get it. If you want to open source your code, go right ahead. But stop forcing your way of doing things onto everybody else. It's truly bloody annoying.
I'm not saying this to be inflammatory. Honestly.
I work for a university, where I maintain their Learning Management Systems (LMS) - software used to deliver course content online.
We use a combination of open source and proprietary LMSes: Moodle, WebCT and Blackboard.
When it comes to actually being able to grasp even simple online concepts, the Business faculty are at the bottom of the barrel. The people in the MBA program? Entirely clueless about technology ... which is disturbing as my school offers an MBA that specializes in tech.
Very, very scary people.
Why is Slashdot so biased towards open source?
"First they ignore you,
Then they laugh at you,
Then they fight you,
Then you win."
Mohandas Karamchand Gandhi
I'd rather get my MBA from someone who gives me the tools to actually compete in the market place. Not teach me ways to circumvent competition and leverage market share through these tactics. There's already a university for this. It's called the street. I'm surprised these guys aren't named Guido and Mugsy.
Enough people.. feel that Open Source is bad for business and bad for the corporate economy, that I'm surprised it took this long.
It is always fun to walk by the corp IP department offices while talking about Open Source... just to watch all the lawyers squirm
Fixed the title for you.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
It is a sorry shame that the university, a place of free and open ideas, should openly advocate against the use of open source and/or an embrace and extend mentality. I for one an very much pro open source and the grass roots of open source will win out over the long haul. Especially, when market driven economics suggest that if there is a less expensive (albeit free) alternative, people will gravitate to that solution. The advice these professors have given to their students is very poor. Look at Microsoft where there was a huge EU judgement that forced open their protocols to good and adequate documentation. The amount of money Microsoft spent defending and deferring this judgement would have been better spent on research if they had just not tried to play the big, arrogant bully on the block.
The headline is misleading. The MBA students aren't learning how to fight open source as an abstract concept; they're learning what to do when your business produces a piece of proprietary software that competes with an open source product.
I'm all for open source and use a lot of open source apps, but I don't believe that such a dilemma is always most profitably answered with "embrace open source yourself."
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Considering that one of Stanford's essay topics this year is entirely based on "Intellectual Vitality," this is blatant hypocrisy. Perhaps if graduating students weren't drowning in debt by the second they stepped off campus, there wouldn't be a need to continue this vicious cycle of capitalist corruption. Stanford has successfully demonstrated once again how progress and innovation is forever doomed to be hindered by the greed of lesser minds (namely, in this case, mba's)
Stanford Teaching MBAs How To Fight Open Source
With Google's strange opacity, it's not a surprising thing to see (them having a lot of the uppity qualities of Stanford). Then again, to say that would be blasphemy.
Twitter supports and protects racists - by smearing their critics with the "Hate Speech" label.
One of the strategies is perfectly rational, and I'd expect it from any competition, not just proprietary software. "...to judiciously improve its product features..." would benefit both open and closed source applications. In the absence of competition, there is no product growth; it only stagnates and gets reboxed year after year and labeled as a new version. If a proprietary program slowly increments features to sell the next version, then the open source rival will almost always be ahead of the game. To compete with open source software, proprietary software must always try and be noticeably better (marketing helps with this, too, of course), but if a proprietary vendor says "That will be in the next version" and "No, we aren't planning on implementing that" all the time, then the open source programmer will win out from listening to his community (though that doesn't happen always...).
Admit it. You post strawman arguments as AC so you get modded Insightful for refuting them, rather than Troll
1. build a great working product that is interoperable with open source products
2. price it right
3. treat your customers right
4. maintain the product
5. profit
They're using their grammar skills there.
... Miguel de Cervantes' writing on battling windmills is also a valuable resource for those MBAs so inclined.
Have gnu, will travel.
The problem with the arguments as presented is "open source" vs. "proprietary". This is completely silly. My firm builds proprietary software, but we are completely dependent upon open source tools. Apple's OS is based upon Open Source, but itself is proprietary. IBM certainly makes products and machines that are proprietary in nature, but is one of the biggest supporters of Linux. Google's whole empire is based upon cheap PCs and Linux.
This paper's synopsis makes it sounds like if you're a software firm, you must "compete" against open source by defeating it, or else it will destroy you. However, the most successful firms are the ones that have embraced open source tools and techniques to build their own unique product.
Microsoft is a sore exception, and would probably be doing much better if they weren't so anti-open source.
Go Richard, kill him at once!
just wonder why there are so many anonymous cowards in this world....
... to come up with such a piece of trivial BS. I especially love this old tired myth of a closed and proprietary product "out-innovating" (this marketing mumbo-jumbo is priceless, too!) an established open-source technology. Does anybody have some concrete examples of this having actually happened and being successful in putting open-source out of business (so to speak)?
Before deciding to fight open source and to lock your customers into dependence on your company so that they cannot escape, step back and ask yourself a question. Do I want to make money by doing good for people, or by deceiving and manipulating them?
There are basically two different ways to run a company. One is to make your customers happy and strive to serve them as best you can, trusting that they will reward you for it with loyalty. The other is to trick people somehow, by being dishonest, selling them something they don't need, locking them in to your service, or sticking them with extra fees. Both approaches can be profitable, but only one can actually make the world a better place.
I love companies that take the former approach. For example: NewEgg.com (Low prices, honest customer reviews posted even if they are negative, excellent customer service.) Monoprice.com (For the same reasons.) Netflix (Fast service, easy to use website, honest communication and refunds for rare service outages.) My local coffee shop (High quality drinks that are much better than the chains, friendly staff, good food with custom menu items that change frequently.)
On the other hand, there is no shortage of examples of the latter approach. Best Buy (Selling HDMI cables for $50-75 which can be purchased for $5-8 on Monoprice.com.) Most places that sell glasses (for excessive markups. An online market for glasses at vastly reduced prices is now springing up.) Most cell phone providers (for charging excessive fees, making it difficult to switch providers or move phones to other plans, and designing their plans to overcharge customers who don't guess correctly how many minutes they will talk and at what time.) I could go on.
It's probably easier to make money going the evil route, or at least it requires less originality. But I hope that at least a fraction of MBA students would be interested in something more than the bottom line of profit.
You see, this is clearly a calculated move in the epic power struggle otherwise known as the Cal/Stanford rivalry. Do you really think it's a coincidence that the world's leading institution in the field of hating Stanford also happens to be the 'B' in BSD? You can soon expect a ferocious counterattack of Unix hacking, liberal politics, and lateral passes.
There's so much unproductivity being advocated by these people that investors have to wonder about where the value really is. Divide and conquer. Screw around formats. Trick people into supporting you through networking effects. The basics of this type of competition were laid out in excruciating detail ten years ago by James Plamondon, a M$ Technical Evangelist. Disrupting others is not a valid business plan and businesses that act this way are losing money. SCO is dead, next up are Novell, Corel and M$ themselves.
Friends don't help friends install M$ junk.
two business professors from Harvard and Stanford have combined to publish...
Like, into a Business Professor Archon? Sweet.
sic transit gloria mundi
Yes, thank God somebody else could see it. They're not even "teaching MBAs" in any sense of the word. You'd not only have to overlook the actual paper to reach that conclusion, you'd have to skip over reading the press release and stop at its title. I know we're all super-aggregating hypertext meta-summaries via our Facebo super walls with flash these days but for crying out loud, could we spend a little more time on these things before creating Slashdot submissions.
No kidding!!! What do you say at this point?
Interesting that none of their recommendations include developing better software than OSS.
Ultimately, from the point of view of the buyer, free products provide an important benefit. "Even if consumers do not end up adopting the free product, it can act as a credible threat to the commercial firm, forcing it to both lower prices and invest more in product innovation," says Mendelson.
qz
In the spirit of http://xkcd.com/463/, commercial software that competes like this will slowly lose the battle.
Instead of fighting for the same turf as open source, they should be finding markets that aren't served by open source. Niche markets and new markets are great places for commercial vendors. Generic applications used by everyone that are constantly reinventing the same wheel will be open sourced and the market will shift.
Don't try to make a better web browser or office application. Instead, focus on the pace maker control system or credit card fraud detection system. Focus on things that are worth money to a narrow market and don't have a lot of competition from open source because their isn't demand for bored developers to build a cheaper mouse trap.
Stop doing it wrong.
I strongly believe ordinary economic strategies are more concerned with resources with scarcity.
Software does not have scarcity, because once made it is abundant. And the average fixed cost tends to become zero all the time.
It is even better than the secret Coke formula and thats why people who can force people to buy software can reap unbelievably high profits.
FOSS's greatest weakness lies in its divisibility. People get divided over little things. "There is blob in Linus's kernel? Well, then guess what we are making a new OS".
Therefore as long as FOSSians stay united they are going to be safe.
Heroes die once, cowards live longer.
So they finally learned how to fork a project. Great, just what we need another flavor of linux. This time, one made by a bunch of lawyers.
This is pretty cool -- it is definitely a testament to the effect of the open source movement.
MBAs want to make lots of money. Traditionally, telling everyone the secrets behind your product is bad business. Heck, Mrs. Dash isn't open source :p
I used open source in school along with proprietary software.
Evolution doesn't let you create appointments that follow your class schedule. For example, I have a class on Mondays, Wednesdays, and Fridays. Outlook let's you check the appropriate boxes for recurrences but Evolution only lets you do one day a week, so you have to create 3 weekly appointments just for one class.
When I was in school, I didn't need any computer to keep track of my classes. Instead I used a paper planner. All I needed to use it was a pen or pencil though I did use coloured highlighters to colour code the different classes. When I was in therapy after an accident the therapists had us do the same thing, keep a paper based calendar or planner to write all the different therapy sessions and exercises.
I used to like Office because it was familiar, now I like it because it quickly and easily does what I want.
I used to use Office but now I/ve saved money since I've been using NeoOffice.
Falcon
Should there be a Law?
Advise your MBAs on how to make money with open source, because you are going to lose fighting it.
Where is this "lot of OSS" I'm wondering about?
Or is it OSS that Google just uses?
Yes, because a few million Mac desktops vastly outnumbers hundreds of millions of Linux embedded devices, servers, desktops and virtual appliances.
It does, for exceptionally high values of "a few million."
http://www.kk.org/thetechnium/archives/2008/01/better_than_fre.php
To be a well-rounded professional, everyone needs a little business sense, and right now that means understanding how to make money in a world where nearly everything can be duplicated for zero cost. This article is key, and outlines several things that companies can sell (convenience/speed, customization, personalization, etc) now that charging for digital content is becoming obsolete.
The funny thing is that someone funded a research paper that is basically a long version of a freely available article. So...good job, research community.
...and are ordinary business advice, which open source also follows:
- fast to market - start with something that runs, and a vision of it becoming something really cool
- improve features - release early, release often
- segment the market so it can take advantage of a divide-and-conquer strategy...
That last one is interesting. It is written from a rapacious point of view, but it also means meeting the needs of different groups of people - which is a good for consumers.
Open source does not do this. Business software also does not do this. Partly because it undermines network effects.
In other areas it seems like the intersection between programmers and users are very low, like say video editors. If you've tried any of the OSS editors and compared them to commercial ones, you know what I mean.
Have you tried CinePaint aka Film GIMP? Movie makers like Dreamworks uses it, along with Linux.
All in all, I don't think closed source companies will disappear for a very long time even if Windows/Office were to disappear (and that's a looooooong way to go there too).
There's no good reason for closed source software to disappear. I'd like to see more open source but wouldn't make all software open. Instead I'd let a freemarket encourage competition, as well as cooperation.
Falcon
Should there be a Law?
As is CinePaint, which is also open source. It's not as good capability wise as Photoshop but it does a lot photographers want to do.
Falcon
Should there be a Law?
"How to sell air to those already breathing"
The Wall Street is listening!
Do not trust this signature.
Prostitutes always forgo morality in favor of money, and there's not much money in free open-source software.
9/11 Eyewitnesses to Explosive WTC Demolition 1 of 2
it's capitalism - as long as iot's within the bounds of the law it's all about competition and squeezing your competitors out
That's not what capitalism is about, capitalism encourages competition. What you're proposing, monopolies, is what what Adam Smith the Father of capitalism was opposed to. He didn't even like patents calling them a necessary evil. To Adams capitalism provided a fair or equitable and optimum outcome for everyone.
Falcon
Should there be a Law?
the most successful firms are the ones that have embraced open source tools and techniques to build their own unique product.
Microsoft is a sore exception, and would probably be doing much better if they weren't so anti-open source.
Microsoft has used open source stuff. MS's Windows Sockets API or Winsock was based on Berkeley sockets API. that's only one example but I'm pretty sure others can point to more open source stuff MS has used.
Falcon
Should there be a Law?
If you deliberately keep your products closed, I think you might get problems with the competitionboard in some parts of the world at least... Perhaps even without a monopoly...
In fact, the problem isn't finding jobs, the problem is finding programmers.
You shouldn't say that. MS and other businesses will use that as justification to request more H1-b visas. There isn't a shortage of programmers, the shortage is in the number of programmers willing to work for what these businesses are willing to pay.
Falcon
Should there be a Law?
Glad I never got one of those fancy degree's, they obviously do not teach spelling or grammar.
Perhaps Mexican universities don't teach IT classes in English. Looking at many of the posts on /. US universities don't teach English well either.
Falcon
Should there be a Law?
...to pay your $699 licesing fee you cock smoking twitter!
"First they ignore you, then they laugh at you, then they fight you, then you win." Interesting to see how much Gandhi knew about open source software.
The slashdot summary author (mjasay) appears to see the world through a lens which makes the developers of open source software victims of some nasty MBA conspiracy.
Funny, I see it as proof that such a 'conspiracy' exists. Research is being done on how to make people chose something which is not in their interest to chose - such as proprietary software - of course the capital/powers that be protects its revenue stream and of course they are doing it in morally dubious ways.
One method to build value is to increase switching cost through lock-in.
Which is inherently a bad thing - restricting peoples choices through the power you wield over the market. I do not care why you do it (though improving one's corporation's bottom line is hardly a noble goal to begin with), it is, in a word, wrong.
I am not particularly outraged at the researchers, more than I am at MS employees, but I do find it interesting/scary/proof of sick societal system that money is being funneled into researching how to best keep customers away from getting stuff for free.
IAIFARSIJDPOOTV - I Am In Fact A Reality Star; I Just Don't Play One On TV
Most of those strategies described in the article directly hurt the customers... And when the customers realise this they are likely to abandon your products and never return.
It's also very much a short term strategy, because keeping the market closed and proprietary will only work for a time before other catch up, similarly adding features only works until you reach a certain point where users already have all the features they want and more is just considered bloat. Similarly, by continuing these consumer-hostile tactics you build up bad feeling meaning customers are far more likely to jump ship as soon as they perceive a suitable alternative is available.
Such tactics also only work if you have a stranglehold of your market, if you`re a niche player then you can't afford to lose interoperability.
http://spamdecoy.net - free throwaway anonymous email - avoid spam!
Don't worry, you can still get it at your local library, or order it online, look in the April Science Fact article, and no, it's NOT an April 1st article.
+1 HonestMod!
My first Journal Entry ever, in 8 years! http://slashdot.org/journal/365947/aphelion-scifi-fantasy-horror-poetry-webzine
Yes, open source water is a good thing.
I'm glad MS didn't get a patent on good old H2O.
I'm enrolled in the Masters of Accountancy program at UIUC, minoring in IT management. I'm also a graduate research assistant at NCSA. I can speak to this issue coming from my personal experience in both worlds: business majors are shallow airheads. Don't worry about this kind of research--it comes from disgusting avarious pigs who don't realize how obsolete their thinking is. Companies and people who embrace this idea (e.g. Apple and Microsoft) will simply render themselves irrelevant in due time. Row row fight the powah.
...has it right:
"Ultimately, from the point of view of the buyer, free products provide an important benefit. âoeEven if consumers do not end up adopting the free product, it can act as a credible threat to the commercial firm, forcing it to both lower prices and invest more in product innovation,â says Mendelson."
If one of the best bits of advice they can give is to out-innovate OSS, then the consumer wins. Just the threat of competition will hopefully be enough to give some of these firms the kick in the ass they need to provide better products.
To my fine Stanford and Harvard business MBA people.
Try as you may, struggle as you will:
1) Open Source will defeat you on any battlefield when the objective is decent software that actually works, and works well.
2) Scamper against your timelines, and your fixed budgets and your limited staff.
Spend BILLIONS in fact.
We will defeat you because it is a simple fact of numbers, that we have, and you cannot understand.
3) Finally, my good professors. We will enable the poor who want to study computer science that cannot afford your software. We will defeat your cronies in the places of power that use our personal information irresponsibly to keep that power. We will penetrate those secrets held by your proprietary software and use those secrets against you and your customers.
Ultimately what we want is social justice in a technological society, open systems that control our money we work hard for and the people we vote into office.
Open systems we can learn and grow from to enrich the lives of fellow human beings.
Ultimately this is about the pursuit of science and the benefits that pursuit brings to all of humanity.
Not just those who can power monger or profit from it.
Ultimately I hope everyone reading this, understands that this is not about software anymore.
It is about the right to learn, and to be empowered in a technological/information based economy.
If you lock up everything, then only a few can benefit. If you unlock everything, everyone has a fighting chance on equal footing to compete in such a marketplace.
-Hack
Got Geometrodynamics? Awe, too hard to figure out? Too bad.
Open-source zealots killed my baby!
There is always there is always the flip side course for 99.99% of other non-software businesses, which is far more justified as a MBA course.
Exactly. While it isn't actually all that hard, most non-slashdot reading folks I've ever discussed open source licensing with (admittedly a small sample) grossly misunderstand the terms of open source licenses - especially the GPL. They usually think they give away their copyrights when in fact just the opposite occurs. As a community, we advocates of open source have done a poor job communicating why open source is an advantage to those willing to take the plunge. There are unfortunately a lot of misconceptions about the finer details of open source licensing and the software in general.
One of the touted advantages of open source is the availability of the source code. But if a business isn't a software developer that is not perceived as especially valuable. No auto parts supplier is likely to go and contribute patches to Open Office. It just won't ever happen and they know it. What needs to be emphasized are the follow-on advantages - no forced upgrades, no data lock in, reduced licensing fees, reduced platform lock in, etc.
Many folks also tend to underestimate the advantages of open source software in favor of whatever commercial software they are already familiar with. The fact that Open Office is free (speech and beer) gets overwhelmed by the perceived need to use Excel (or Word or...) because that is what they user is familiar with and often what everyone around him/her uses. Never mind that they are giving significant control over their upgrade schedule and data accessibility to another company and not being compensated for the "privilege".
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This is a totally legitimate strategy, and it is exactly the one utilized by many open source projects.
/. these days.
It's an industry. The software is the product. Open-source should be, and with a few notable exceptions generally is, subject to the same rules of competition as proprietary projects.
There's too much blargleblargleproprietarysoftwarebadblargleglargle on
What seems to be missing from the analysis that has lead to these particular tactics is that it's *the customers* who are expecting and demanding FOSS now.
FOSS is an idea, not a vendor, and you can't compete against an idea unless you have a better idea, from the customer's POV that is.
Closed, siloed, locked in, and unsharable software isn't winning converts.
Can anyone tell me what an Executive MBA is? Is it just a rebranded MBA after everyone realized (circa 2001) that MBAs are as a general rule ignorant blowhards?
My turnips listen for the soft cry of your love
IIRC, someone told me the GPL was a cancer
My turnips listen for the soft cry of your love
You had a snide answer. Oh, and it's "your understanding", not "you're understanding".
He didn't say anything about little boxes.
By the way, AC, in answer to your question, and to actually illuminate rather than just tell you that you misunderstand:
Most software is written to serve the in-house needs of large-ish corporations. They need to manage their business, and to be competitive their business has to differ from other businesses serving similar needs. So they have large quantities of software to manage their inventory, coordinate their workers, manage their books, determine if payment they've been given is fraudulent, etc. The little details of all of these things are specific to the business rules of any large business.
Often those needs could be fulfilled by some commercial software, if it weren't for the hundred little things that the company needs done differently. If some open software can do basically the same thing as the commercial software, it's in the company's interest to add the features needed to support their business needs. This typically has to be done without exposing their business specific rules (i.e. without making those rules open source), but you can just make the software configurable and put the rules in some configuration file outside the OSS app.
Frankly, the only times I make changes to OSS software for pay are for basic infrastructure software (e.g. apache, ant, etc) when there is a bug or an obvious feature missing. The actual software that fulfills whatever business need is fully proprietary, except for some of the infrastructure.
They'll have to invent new ways to steal, eh, earn money.
If their conclusion is "make your product better in order to compete with FOSS" then more power to them--if all FOSS does is make proprietary software better then everybody wins. Of course, FOSS is not likely to be out-innovated.. But the bottom line is, competition is good--and often there would be much less competition in the software market if it weren't for FOSS.
Instead of fighting open source, why don't businesses learn to exploit it?
Fighting open source is rather stupid, in my opinion. Who pays for what they can get for free? If your competitor is making his product's source code available, you had better as well; it doesn't take a rocket scientist to know who is giving the customer a better value. You can bet your customers are going to know.
Granted, there are certain cases where companies have good reasons for hiding the source code. Shoddy programming, intellectual property violations (stealing others' copyrighted works, surrepititious illegal patent use, etc...) all come into play. It could even be a matter of keeping trade secrets, secret. However, in all of these cases, if you can't provide compelling value above and beyond what open source projects are doing, there's no point in keeping the code secret.
Instead, your open-source competition is going to offer a product of comparable value, with considerably less development effort on their part. Your competition's profit margins will be higher than yours. Your shareholders will start asking probing questions, like, "Why is development so expensive..." and "Why are our margins so low..."
As much as I hate to say it, capitalism works for open source, rather than against it. No one on the board wants to pay your programmers an arm and a leg to reinvent the database; rather, they'd probably prefer you to use an existing open-source database and concentrate on developing features which add value and differentiate your product from the competition. Companies go bankrupt reinventing the wheel.
Today you can't fight open source. It's just not economically feasible. Rather, companies need to learn to instead build upon the foundation provided by open source, rather than trying to undermine it. That way, they can produce compelling features and provide value for less cost than their competition.
The society for a thought-free internet welcomes you.
The link takes you to the appendix of proofs - this gives you no way to evaluate whether or not the propositions they are proving are useful in the first place. One problem with academic papers is that they fail to address the interesting question and are often predicated on absurd assumptions. I'm pretty confident in stating this because I have not only an MBA, but also a PH.D. in business strategy. The true heart of the argument has to be in the copyright / patent system which provides the basis for their "strategic" propositions - none of which appear to be very novel to me.
Isn't the bottom line of any "Business" to make profit? It would seem to me that purchasing proprietary software would thus offer up less profit in the end?
"We're gonna need a bigger boat"
Lesson #1: Pick your battles
Lesson #2, method dealing with the enemy while occupying a strategically disadvantageous position: see lesson #1.
Does anybody believe that the proprietary/free clock will be rolled back to the late 1980s, when printing licenses was like printing currency? Of course not. Open source is here to stay. That doesn't mean there aren't opportunities to make money in software, both in competition with and by using free software. It seems to me the smart business leader chooses the mix of competition and cooperation. Google hasn't done too bad, after all.
Where it's tough is when you have a company with a cash cow. Microsoft. ESRI. Oracle. The cash cow may be doomed, but ever year it is kept alive represents money, a great deal of money.
So it makes sense to position your product, say Windows, against the open source "competition". It really boils down to one thing: compete. Give your customers reasons to keep buying your product and cut prices to keep them from moving away from your products. There are now free as in beer versions of Oracle and SQL Server, just to establish a bulwark on the low end of the product position.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
No, idiot, you're not supposed to kill the babies. After you kill the bastards, you kidnap their babies and raise them to your ideals.
Don't forget to rape the horses and ride off on the women.
What makes *me* laugh is: the only good advice seems to be make a better product, faster. That doesn't remind me of Microsoft.
And open source development actually is one way to make a better product, faster. Hmmm...
As for the tired old lock-in bullshit. Is that plan B? Really? We know *that* plan isn't working either, even with Microsoft's billions behind it.
Us vs Them is never more fun than when Them's doing or saying something stupid.
-- What do you need?
-- Gnus. Lots of Gnus.
This should provide a good starting point.