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Why No Billion-Dollar Open Source Companies?
Glyn Moody writes "If open source is such a success, why aren't there any billion-dollar turnover open source companies? A recent briefing by Red Hat's CEO, Jim Whitehurst, to a group of journalists may provide an answer. Asked why Red Hat wasn't yet a $5 billion company, as he suggested it would be one day, he said getting Red Hat to $5 billion meant 'replacing $50 billion of revenue' currently enjoyed by traditional computer companies. If, as is likely, that's generally true for open source companies, it means they will need to displace around $10 billion of proprietary business in order to achieve a billion-dollar turnover. Few are likely to do that. Perhaps it's time for managers of open source startups to stop chasing the billion-dollar dream. If they don't, they will set unrealistic ambitions for themselves, disappoint their investors, and allow opponents of free software to paint one of its defining successes — saving money — as a failure."
Just ask Google.
Why should your profits go to Adobe, Microsoft, IBM, Oracle and all those other closed source companies? Look at the .com companies that survived the 'dot bomb' era. They used open source.
Using expensive proprietary solutions is a sure way to increase your expenses and decrease your profits.
How do you become an open source billionaire? Ask Sergey Brin and Larry Page.
I think you'll find the same thing is happening in the Media industry. People's ability to download movies, songs, books for free is devaluing the time and wages of the creators. The media companies won't completely disappear - they'll just earn 10-20% as much money as they did before 1999.
It appears to me the software industry is heading along the same path, and just like the RIAA, Microsoft is fighting it tooth-and-nail because they don't want to see their income reduced.
"I disapprove of what you say, but I will defend to the death your right to say it." - historian Evelyn Beatrice Hall