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"Open Source Works" sez former VC
Suydam writes "J. William Gurley, a former venture capitalist turned writer, talks about how Open Source works in his latest "The Rising Impact of Open Source". There's nothing earth-shattering here for the Slashdot audience but it's decent press for the OSS movement and a worthwhile read. " Remember-the PHBs have heard of News.com. Make 'em read this.
When oh when is /. going to start to strip the garbage from news.com URLs? The various bits after the html extension are used for tracking specifically which links are being used to access the page; including them in links skews this data.
The nice thing about Gurley is that he is well read by the people that you want to be reading this stuff. He is well respected in the buisness community, and often offers very insightfull views into buiness models. Thus, a ton of top brass like to read his column, and in this case it even extends beyond the tech sector.
What he has done is given a huge boost of credibilty to Open Source in all it's forms. If you want to review his credibilty, go back and read some of his columns for the last 4 years, the man is amazing.
hehehe..
i just lost 10 minutes of "productivity" poking through those.. thanks!
forgive my ignorance, but what's a PHB?
thanks
huh? He's still a VC. He works at Benchmark Capital now (was previously at Hummer Winblad)
Anyway, it's cool seeing more clued AND prominent VCs realizing this open source stuff has a lot of muscle behind it and is here to stay
So this writer is a _Former_ VC?
What made him drop out of the feeding frenzy? He made enough money and dropped out?
Or... ? (many other possibilities come to mind none of which add to the credibility of the writer)
Hi Jamin how is it going?
What exactly is a PHB?
Sorry for the newbie question.
This is the main reason Linux will be so successful, and why Windows will eventually Fail, or change it's distribution method.
Or, the cost of bandwidth will soon become metered, and a market 'correction' will occur. A lot of the hype around the "Internet Boom" has to do with cheap relatively unlimited bandwidth. Yet the success of distributors such as cheapbyte.com show that there is significant value in the 'bandwidth boom' that a snail-mail delivered CDROM represents.
A friend of mine has his DSL now, and uses it for steady 24/7 download of various things off the net (mostly MP3 lately, he finally grew bored of girlie JPEGS). He's, frankly, a serious bandwidth hog, and it must be affecting the adjacent users in his neighborhood.
The ISPs and Telcos are not going to serve up unlimited free bandwidth forever. Unless the much hyped mainstream digital multimedia services really start flowing, which will require a radical widespread upgrade of infrastructure, ISPs and Telcos aren't going to keep giving away tremendous bandwidth to a minority of people, to 'feed the frenzy' so to speak.
There will doubtless always be a digital elite who use tremendous amounts of bandwidth to scarf down things like Linux over the wire. But that might soon become a lot more expensive than the mainstream is willing to pay.
Look to the grumbling now being heard at increasing volume regarding digital televison in the US. People are NOT enthusiastic (technophiles are a small minority and so do not count) about huge expensive changes to the information infrastructure. Why should they spend big bucks to watch "Simpsons" and "Seinfeld" programs on HDTV.
The same issues, and the same social reaction, lie ahead for broadband 'net access.
Sorry to come off like a Luddite. I really don't hate the future. I just don't think it will necessarily follow the course many people assume.
Whoa!! This is cool! :)
Because he's my step-uncle!
(I remember seeing him for the first time on NBC
or ABC or CNN, I don't recall which.. he's come
a long way, baby!)
J.Vaughn
cripes. Why waste the readers time with a stupid insult?
Corndog
That said, I don't really find it annoying either.
Werd.
...for more static content than a DS3 could handle. However, many don't serve on even a DS3 or serve static content.
Just look at Microsoft's own site.
A Pirate and a Puritan look the same on a balance sheet.
Sure, but the same argument can be turned around and used against PC OSes. The server isn't just the OS but the whole package. 'OS support' only creates an edge for part of the solution. You still may have issues with the 'rest of the solution'. Thus complete solution providers provide even more comprehensive support. Plus when you own or can merely modify the OS, you can provide and even greater level of support when coupled with full hardware support.
Linux and the BSDs allow for the proliferation of IBMs and Suns.
A Pirate and a Puritan look the same on a balance sheet.
Past a certain point, net connectivity on many ISP's is already metered. So that is a bogus point.
A Pirate and a Puritan look the same on a balance sheet.
What has Netscape got to do with Apache?
Umm... Netscape used to (and still technically does under AOL/Sun) sell a commercial Web Server. Ran on a variety of Unices and POSIX type systems, IIRC.
--
The Future: Some assembly required; batteries not included.
A lot of the open-source contributions (fixes, enhancements, ports, drivers, adaptations, etc.) probably come as a byproduct of other in-house development projects - which is the thing the developers actually get paid for.
--
An esoteric scratched itch:
Homeworld Map Maker Tool
So...the developers at RedHat (or SuSE, etc.), who get paid to program open source code for Linux, are volunteers? Hmm...
That is, if they've entertained serious dreams about landing big bux from a high-profile Valley venture firm.
This is a very nice source for a (perhaps) surprisingly good summation of the OSS phenomenon for business types.
-- Ryan Waldron
Swampfox
Real Hacker (tm) Wanna-be
Deals
With open source you can't differentiate your product by making it better quality, because your competitors can legally redistribute exactly the same software you do. The way you differentiate is with marketing, price, tech support and extra bonuses (eg: commercial software, manuals, penguin dolls, pretty boxes, etc.).
The Linux software market is quite different from the "normal" software market. Linux users care about open source and are less likely to buy software from a company that they don't think contributes. The average Windows or Mac user really doesn't care.
Because Red Hat sells Linux distros, it's in their best interest to have developers because that's good PR in the Linux market. If you were selling utility or application software for Windows or the Mac you wouldn't need developers. If someone starts selling an improved version of your product, you can start selling it too. As long as you have better marketing and a prettier box, you'll make more sales.
Ironically, the one thing that could possibly force you to innovate is the existence of "proprietary" software. You can't just go and redistribute proprietary software, so they'd be real competition. If all the world was open source though, competition would be reduced to marketing and packaging. Technical innovations could just be copied off the competitor's FTP servers...
Also, consider what would happen if you developed an open source application for Linux and tried to sell it. It would be almost impossible to sell, because it would probably appear on the next Red Hat CD if it's any good. No matter how much "quality" you put into it, why would people buy it from you, when they can get it from Red Hat? They've heard of Red Hat, not you.
It's also interesting to note that for support sellers, improving the quality of the product can actually be a conflict of interests. They make money on support, and lose money on development. It would be even worse if development started doing things that would reduce the amount of money made on support. This depends on the model of payments for support of course. When talking about the "free XX days support" included with a distro, then they want to reduce the amount of support required. But when talking about $XX/hour support, they'd like to increase it...
The most disturbing thing about this is that the article goes on and on about the software being produced by volunteers. In other words, he's talking about using open source so you can get free (as in beer) labor.
Anyone with half a brain knows you can make money with Open Source. The problem is, you don't make that money by developing open source software. You make it by selling open source software other people wrote. Well duh, of course you can make money sell the work of others. Cuts downs costs quite a bit too, not having to hire developers.
When is someone going to come up with a business model where developers can actually make money on open source software? Every model I've seen so far sucks because it relies on making money off of something other than the open-source software, ie: support (support-sellers), hardware (widget frosting) or closed-source software (loss-leader). In other words, the open-source developers are either an expense or unpaid volunteers.
Open source software has to survive in a market where the selling point as it were is quality. Just because something is free (beer) does not mean that it gets used, the quality becomes the determining factor.
Now lets say a company has as it's product services and support for an open source peice of software. The short term gain would be to just milk this without putting anything back, long term gain means that in order for this software to survive it must compete, and compete well. This entails employing developers to improve the product and ensure that the quality remains high. Otherwise the software fails to compete and brings down the companies "product" with it.
So I feel that in order for any company to do well in the open source environment developers have to be employed, hence the free labour model is not as competetive as "controlling" and "enhancing" and keeping the quality high that employing developers would entail.
For example I could release a distro tomorrow, but would it overtake all the other distro's out there? Probably not, because for example I do not add anything new, and over the long term it would be left behind by the "competition".
Well thats my take anyway.
Ice Tiger
"Because we are not employing at entry level, offshoring will kill our industry stone dead."
Just as a point of correction, an ADSL line is a direct connection to the ISP by way of the phone lines, you're not sharing it with all of your neighbors like with cable modems, the only thing you're really sharing is the bandwidth of the server you're connected to, which ISP's usually keep ahead of the demand for that bandwidth.
But as for free bandwidth, thats something that is hard to predict the future of. ISDN's were super fast compared to the modems they were competing against Back in the Day, but for that speed you not only paid a monthly service charge but you also paid hourly like early ISP's (remember when the $19.95 flat rate was the exception to the rule?). Now ADSL and cable modems are for the most part unlimited bandwidth (although my cable connection's been killed after long transfers from the school servers) but thats because high bandwidth connections needed for the servers is relatively inexpensive and the slack bandwidth can be put to use by selling it off to co-locations or hosting services. But who knows if these services are going to become constricted as they become more popular. I certainly hope not, unlimited bandwidth means freedom of sorts by notm aking you worry if you're going to run over your quota and have an extra ten bucks added to your bill per hour. This would most likely lead to Joe Average going back to their v.90 connection simply because they dont have limits on their bandwidth.
I'm a loner Dottie, a Rebel.
--Jamin Philip Gray
jamin@DoLinux.org
Celebrate the finer things in life
--Jamin Philip Gray
jamin@DoLinux.org
Celebrate the finer things in life
Sorry to be off topic but I just read userfriendly's strip for today and noticed that there was a character with a T-shirt on which was written "I love Jar Jar". I couldn't help laughing about that given all the anti-jar jar crowd at
Will I be moderated to -1 because I am offtopic or to +5 because this detail is funny? Wait and see
"The obvious mathematical breakthrough would be development of an easy way to factor large prime numbers." Bill Gates,
girly is well-known...the article will appear in fortune as well as news.com. basically, the open-source model is now being accepted by vc's as legit and thats good for all you linux weenies out there because more startups will be formed around the model. basically this is all part of the natural commoditization of software - to add value vendors are moving to a service-type model where software is either provided as a service or the architecture of the software is based on the presumption that organizations have a live net connection at all times linking them in realtime to suppliers partners and customers...
-- your knees hurt, don't they?
As Mr. Gurley says, "...get over it."
While he is referring to disbelief that the open source model can produce robust and complex software, I think it applies just as well here.
Consider the statistics for server growth... *Somebody* must be choosing Linux. Further, as we've seen, success breeds success in the software platforms world. When the "Sky Magazines" and computer management journals start to tell PHB's that Linux is the Next Big Thing you'd better get out of the way. Just make sure you dump your Microsoft stock before the herd instinct takes over and the stampede away from Win2000 begins!
Geeky modern art T-shirts
Netware 5 comes with Netscape fasttrack webserver.
nifty little program.. not sure i'd run a big business high traffic site on it, but definately cool for a small shop
--
The risk of choosing an albatross for an information technology solution is increased in the OSS area. Sure, we have seen some very overpopularized examples (Apache/Linux) but IBM and Microsoft have, for the most part, withstood the test of time. If I'm a CIO and my Microsoft product flakes, I know that this company has resources beyond my imagination and in the end, they will make the product work (though maybe requiring more time and idiots).
I love the OSS movement, too, but the establishment isn't going to vanish quite yet.
OSS is going to need more demonstrable successes.
What has Netscape's war with Microsoft (I'm presuming he's refering to browsers) got to do with apache's growth.
According to Netcraft, Apache runs on more than 57 percent of the world's Web sites and has gained consistent market share, even during Microsoft's aggressive attack on Netscape. What has Netscape got to do with Apache? We all know that IIS is faster than Apache don't we ;P
Open Source is not streamed to the market in the same manner as closed source. Microsoft makes windows, then in turn sells it to OEMs and Retailers, who then sell it to End Users either as a standalone product, or bundled with a system. Open source products (such as Linux) are written by thousands of hackers across the globe, and bundled in distributions available for download or purchase. You can't compare the methods of distribution, because they use different means of marketing from the start.
This is the main reason Linux will be so successful, and why Windows will eventually Fail, or change it's distribution method.
-- Give him Head? Be a Beacon?
-- Give him Head? Be a Beacon? :P)
(If you can't figure out how to E-Mail me, Don't.
Remember the PS/2 debacle? Overpriced, uncompetitive PCs with a new, proprietary bus. Allot of companies went with Big Blue, and allot of heads rolled, as cheaper and faster EISA and ISA bus clones came to market. With the advent of Linux and Open Source, those who cling to the "I can't get fired for choosing Microsoft" run an increasing risk of suffering the same fate. We are paid to be technically savvy, and to investigate and (presumably) select the best technology for a particular job. When an employer discovers they've missed the boat, and become less competitive as a result, the head of the "play it safe, don't innovate" IT manager clinging to an outmoded and unreliable technology becomes one of the first targets on the hit-list.
The Future of Human Evolution: Autonomy
remember that saying?
right now a network administrator is far more likely to choose an established OS with ready lines of support--ie Novell, Unix, etc, than an OS held together with "duct tape and mt. dew". Before you hollar at me, I love linux, just thats the point of view of much of the establishment. If you want to help linux succeed, get out there and offer support to companies, and when the Linux Certification process is further along, get certified so we can give linux numbers of qualified support people. (yes, certification doesnt=knowledge. but if you are a linux guru, what better way to show the unknowledgeable that you know a lot).
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