Slashdot Mirror
On The Linux Culture and Money
Andrew G. Feinberg writes "The latest Andrew Leonard piece on Salon.com deals with whether our favorite corporations will still be true to the community while having to keep shareholders happy. Excerpt is below:
"Will the huge financial worth of the founders of companies like Red Hat and VA Linux end up disillusioning
small-time developers? These companies must now keep their shareholders happy -- will the goal of keeping
stock prices high interfere with code design decisions that used to be based on purely pragmatic factors? And
what happens if Red Hat and VA Linux stock goes down in flames?"
"
That's the beauty of Red Hat and VALinux going public. You have a shot at a piece of the pie now. Granted, it's the same shot that my dad has, and lord knows he's never coded any GPL linux-ware....but still, you have a chance now. I think that a class action lawsuit would be 1) against the spirit of the linux community and 2) Shot down pretty fast. You never coded your GPL software with the expectation of getting paid, and even Red Hat offers it for free...so they're not making money directly at your expense.
Werd.
My thoughts with regards to small-developer dissolusionment (or lack thereof):
Money and greed corrupt....sure, we all know that. But we also know that money is a reasonably successful motivational factor, and a very appreciated reward system. Small developers will become more plentiful with the allure of money now dangling from the stick. And some existing developers (as well as the new ones lured in by $) will be more motivated to turn out great code. Those that aren't driven by money will stay the same. There will be a select few that are corrupted by the greed...but I don't see them gaining the upper hand in Linux development any time soon.
Something to think about:
Was it the allure of money that sent the windows world from a primarily free-ware model in the late 80s to a primarily shareware model in the 90s? Because that is something I would hate to see in linux. The abundance of shared, free software and the helpful community attitude toward it would be somethign I'd hate to lose. My own gut tells me that the spectre of the GPL and the momentum of the community as it currently stands will help to thwart the shift...but you never know.
Werd.
Because that is what publically owned companies do. When you sell your shares, you are saying "Buy part of me, and I'll lead you to riches." If people buy your shares and then you thumb your nose at them, your overall value as a company will decline.
Most shareholders with any sense will be aware of the GPL and the -different- nature of Linux. Those who aren't are going to get burned, but it's their fault for buying shares purely for profit.
WRONG. Most shareholders buy shares of a company PURELY for profit. Our feel-good Linux companies are no different. You doin't shell out $5000 for Red Hat shares just because you like them. You do it for one of two reasons....which both have the same result. Either you buy Red Hat because it's the hot thing (in which case you have ZERO knowledge of the GPL) and hope to make money. Or, you buy Red Hat because you like their corporate stance, think they are headed in the right direction long term, and hope to make money. The stock market is about only one thing: dollars. Shareholders want them, and Red Hat is obliged to provide them to the best of their ability.
Werd.
"If you have to work on closed-source to eat, there's a powerful incentive for you to concentrate on that closed-source work."
Otherwise known as a contract of employment. I do believe even OS companies have contracts for their staff.
Sure, BigEvilCompany may not be very thrilled about me working on OS projects in my own time, but...
Do you think RH looks kindly on its core developers deciding that frankly SuSE is more interesting and doing work on SuSE in their spare time? I doubt it very much. Sure, I don't suppose that's much of a problem at the moment, but it will be once more companies are open source. At the end of the day you spend your working time doing what your company wants you to do. The GPL may or may not help that time be of use to others.
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The point is (I think) that while everything you say is true, it is still true if you simply replace 'GPL' with 'Artistic License' or 'BSD license'.
If everything RedHat did now were under the BSD license, and RH were bought up by MS, then all the BSD stuff would be ours to continue working on and with. Sure, MS might do a close fork, but that's a whole other issue.
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I beg to differ:
"For one thing, it's a great motivational boost to know that what you are doing could make you mega-rich. Some people like that kind of incentive. "
Yes, and more's the pity. So there is AN hacker working hard on his new app, and he thinks to himself 'Well, I reckon I should use libfoo becuase that's a well made library - but - gee MegaDistro, the most populat Linux distro has gone down the libbar path. So, If I make my app use libbar in stead, my app might get included in the MegaDistro distribution, and they might employ me or give me little sweetners or 'goodwill stock options' so yeah, I reckon I'll dump libfoo.
Lovely.
"Secondly, it is clear that the open source movement as a whole will benefit from the injection of cash and corporate credibility that these kind success stories bring. It's a necessary step in maintaining the progress of free software."
Rubbish. Your definition of progress is not the same as everyone else's. I write free software to make people (not least myself) happy. I don't do it to crush MS, I don't do it so I can become one of the high priests if the OS cathedral like ESR and AC, and I sure as hell don't do it for the fucking silicon value mickey mouse money stock options.
"But most importantly, it is clear that the business model of firms like Red Hat rely upon the goodwill of the open source community."
No. RH has not been in existence long enough to prove a business model one way or another. RH is currently a vapour company. It makes losses. MASSIVE LOSSES AND INCREASINGLY LARGE LOSSES. Its stock rides on publicity and vibe. I'll readily admit that good publicity and good vibes rely upon the goodwill of the OS community. But as for the business model, we'll wait and see.
-----
I would not go so far myself, but it is a GREAT FALLACY to say that the GPL ensures the survival of good OS projects in the face of money (or any other threats).
:-(
:-|
:-)
There are many reasons OS projects die out, here are a few:
1. Too hard
2. Too boring
3. A key developer leaves
4. LACK of PUBLICITY
5. Infighting
6. A rival project
Now, how many of these factors can be easily influenced by any corporation with alot of free cash?
1. No, a hard task is still hard
2. Not per se, but a salary can make up for dull coding.
3. Absolutely. I doubt that a KDE hacker will leave to work on Gnome just because RH offers a fat cheque, but a similar situation is quite easy to imagine.
4. Currently the biggest. Who wants to work on a litte backwater project when you can work on Teh GIMP and brag to all your friends about it? Publicity has a massive effect on the momentum of OS projects - And lets see now:
linux.com (commercially owned)
slashdot.org (commercially owned)
freshmeat.net (commercially owned)
Looking just great
5. Not especially. There's nothing like an ego to rise above cupidity
6. Very definitely. A little project that's been chugging along fine can be killed off in a flash if a company decides to throw a few full time developers at it. Sure, if everything is GPL then the little project can take code from the big new one - but as we all know that's rarely how things work. Lots of NIH syndrome.
Now, you ask, why would our loverly OS company like RH or VA linux want to kill off an OS project? Well, pretty damn obvious I'd say. Are you going to tell me that RH has no interest in seeing, say, harmony bite the dust*
*Yes I KNOW harmony isn't around, and no I'm not making any conspiracy theories, but as we see different companies go down different architecture paths like this, you MUST realise that they have vested interests in alternative OS projects failing.
Since this is in reply to TC, I'll leave conjecture on financial backing for Perl vs Python as an excercise for readers
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It's a small world and it smells funny; I'd buy another if it wasn't for the money; Take back what I paid (SoM)
We know money can corrupt easily. It just depends on who the person is. I think most programmers won't really worry about how much their options are worth, they are just paper anyway. You'll stil have to pay someone who does really good work good money, otherwise they will go elsewhere.
besides with the GPL, everyone can see your work and make snide comments anyway.
I know that he occassional posts and reads here, to, so if you read this, Andrew, know that your work isn't going unappreciated.
Cmdr, Hemos, etc: Any chance of letting him author some pieces around here?
LL makes lots of good points here. My $0.02 into the pot is as follows . . .
There are three cost/profit points with software:
1) writing it;
2) maintaining it;
3) supporting it.
Microsoft's model is based on charging for the first point, & pushing the cost of the third onto a third party (e.g., you contact Compaq or Dell for help with Windows). Due to their policy of ignoring or thwarting backwards compatibility, they evade the cost of maintaining their code.
``Enterprise level" models charge a token amount for the first point, with the idea of making money on the second & third points. (Last I heard, Sun charges $250K a year just to talk to someone on the phone. I have a hard time comprehending that the average company can use that much support, even if we calculate it as $500/ an hour.)
The Open Source model is that an individual invests her/his time on the first point, then shares the software with the general public in hope that they will repay her/him with help with the second point. And in theory, both parties make money charging for the third point (e.g., teach classes, do consulting, etc.)
As LL points out, the first model is inherently broken: we pay for software that ends up imperfect, & we have no way of fixing -- either by ourselves or thru the company. The second model has a proven track record -- the software is more reliable, & companies make money -- but the price to users in that model is far greater than the one Microsoft uses.
The Open Source model promises a way to meet both desires: reliable software at an affordable rate. The question now, though, is if this model can fulfill this promise.
Geoff
I think I see a trend here. Maybe for them it really would be easier to muzzle the entire internet than to produce p
Dissent != damage. Competition is what keeps the community strong, and all camps will be better for it. The friction between the movements helps keep the fires hot, and that's not a bad thing.
Ita erat quando hic adveni.
9. Since the software is GPL'd, if Microsoft was to ursurp it, the last GPL'd version would forever be available. Thus, the developers moving to work on other distributions (3) could continue to develop it (under new names if necessary).
Ita erat quando hic adveni.
Salon had better watch out! The dude who wrote this piece's name was Leonard. That's only one letter less than Leonardo - which as we all known has been copyrighted by that french firm. I bet Salon's going to get sued over having Leonard write articles.
Kinda offtopic, but I thought it was funny.
Why should OpenSource be profitable? Because ESR pointed out very clearly that software is a service, not a manufactured good and the bulk of programming time is spent in the maintenance phase. One big problem with corporatism is they have this habit of externalising negativities, what people commonly call privatising the profits but leting risks get lumped on the public. One obvious example is the tobacco industry which has caused ripple efects on the public health system. Hence the domination of a company in addicting the rest of the world on an endless cycle of unnecessary upgrades has got the rest of the industry feeling the impact of the technology arms race and stressed out and aggravated at the code quality. OpenSource can be seen as a natural reaction by the intermediate customers (who are not the hardware manufacturers) but the developers who want a stable and cheap platform in creating new internet services for their end-customers.
Now most people don't object to profits fairly gained and in fact if they are very successful they eventually dominate their market niche and become a natural monopoly. However, bad business practices can easily erode goodwill such as
Fundamentally a company operates in a network of trust (simply to avoid getting expensive lawyers in to guard every silly thing) and creating a toxic wasteground of relationships as a result of dubious activities, no matter how currently profitable in the short term, is fatal to long-term success. Thus it is not so much the profits that annoy people but the means of achieving those profits and the fact that larger organisations carry their fair share of the social consequences of their actions (e.g. oil companies with their environmental policies, manufacturing with their sweatshop practices, software companies with their founder's personality cults.
If OpenSource is successful as a profitable business model then it must indicate that it satisfies the necessary conditions for a sustainable industry. The point is that with the code being freely available, then the only distinguishing factor is the value of their associated services, reputation for sales support and means for attracting skiled staff with a combination of lifestyle and long-term mission/purpose. One obvious analogy is why do doctors volunteer to work for organisations such as Medici Sans Frontiers? Because they believe in the cause. Profits are an interesting metric of value but they can't measure everything.
LL
Yes, and I was a bit amazed at the comment -
> companies like Red Hat and VA Linux are
> substantially increasing the amount of software
> that belongs to the whole world
Really, I don't think so. All of it existed way
before they did. Sure Rad Hat is adding, but it
hasn't add not even 1/100th to the number of lines
of code that everyone else has.
Maybe in the future, they will, but that's yet
to be seen. At the moment, and in the very near
future, they haven't added any significant amount.
"The best part? I became an ordained minister while not wearing pants." -- CleverNickName
The GPL already damages the community. The proof is simple and compelling: look at the dissent it sews.
The commercial BSD vendor, Berkeley Software Design, Inc., and Eric Allman's companym, Sendmail, Inc., share several characterics. (Note: I may be wrong about some of the following. Corrections welcome) They both started with free software. They both added proprietary enhancements. The both sell their value-added product as a revenue source. Both give you source code to the product you bought. And both forbid you from redistributing that source or changes to it to those who don't hold a licence.
Two critical questions are:
- What's the current technology transfer? To what extend do corporate BSDI enhancements return to the free BSD distributions?
- If these companies go down, what happens to their code? Licence holders still have the source, but so what? Is it dead?
I think these two cases are worth looking at because they did not start with GPL'd software, and thus were free to create a traditional fee-for-licence business model for their software systems. Are your points cited above relevant to them? Do companies like that matter to free software--and if so, do they help or hinder it? Or is that too facile a question; perhaps they help some things, hinder others?To add one more pair of companies to the stack, consider John Ousterhout's TCL-based Scriptics company, or the Canadian Perl-related firm, ActiveState. My understanding is that there's more technology transfer between these two companies and their core free software roots than might be immediately obvious with the previous pair. I cannot really speak of the TCL world, but in the case of the Perl one, that firm funds not only the salary of the Perl release manager, they also fund development for porting to non-free systems. For example, they've made Perl's fork() call work "right" on Microsoft systems (actually, Microsoft paid for that work!) and have immediately returned those corporately funded enhancements back to the world of free software.
Yes, that means that the current developer release of Perl, version 5.005_63, supports fork(2) with Unix semantics even on Microsoft. Hurray!
If you want other mixed-mode business models, think about Alladin Ghostscript. The interesting issue of licensing is covered in the FAQ. There's also Sleepycat Software, whose database product, Berkeley DB, was used in Netscape with neither credit nor compensation, thus triggering a good bit of bad blood on the authors' parts because of lack of public recognition and appreciate for their work. The resulting `poison pill' licence seeks to avoid a repeat of this unpleasantry.
Now, we have in contrast to those situations, look at companies that are making a business, or trying to make a business, out of GPL'd software. The two most obvious examples, RHAT and LNUX, are hardly typical cases due to their current market valuations, which are obviously astronomically overvalued. But even in their cases, you'll find things that aren't what you would call "free software". In fact, they aren't even open source; look at the way Redhat ships "demo versions" of things without source. Now, I would be willing to argue that this is in fact a good thing because it shows people that Redhat's operating system is a viable platform for traditional licensed software. Others, however, dispute this, pointing out that that software would be orphaned if the company who produces it were to die.
My point is that I believe we now have a sufficiently long list of corporate endeavours which are based, at least with respect to some definitions of the term, free software. That means we have actual cases to look at, not hypothetical cases. I'm sure I've only named a couple of them here. What about other companies? I'm not talking about simple packagers and distributors. I mean firms that do serious development work based on free software. (I would mention Cygnus, but they've recently become an acquisition by Redhat.)
Do we have examples of companies that have died or otherwise abandoned their work in these areas? The university Ingress experience and Britten-Lee? Can we come up with other examples to look at? What has happened to the product of their work? Has it truly gone the way of all things, or did humanity derive some benefit from it?
These incessant internecine squabbles are not only completely self-destructive; they also obliterate our reputation in the world beyond our little community. They make us look like whining children, not measured adults. We become our own worst enemies. We discredit ourselves and all we do before the serious business community, as well as before the scientific one.
With the support of neither, we die.
I totally agree with you here. Stock prices are definitely overvalued here. Look at VA-Linux..what is the difference between VA and Compaq? They are both hardware vendors that sell machines configured with Linux/Windows. How come VA linx's share price is in the hundreds and compaq at 20 something? Dooms day is coming and when it comes, watch the people jump out of their high rise penthouse offices...
Is this 'irrational exuberance'? Or is this a new phenomenon?
Suppose these companies never turn an accounting profit or share holders never see a dividend. Would that be money lost? Or might it reflect a non-tax, non-government method of funding society's infrastructure?
Are we witnessing the birth a new type of charity? One that yields slightly more direct returns than traditional charities?
Has anyone the The Leisure Theory of Value by Michael Miller? I think there may be some ideas in it that are very important as we become more of a service-based economy than an manufacture-based economy.
The market doesn't see the potential of open source. The market sees the potential to make profit because of overhyped words and the endless flocks of bleeting sheep.
If they were really thinking about the viability of open source, they would have noticed that many of these companies' business models aren't exactly sustainable.
Of course, with billions of dollars, they should hopefully be able to work out some scheme to eventually turn a profit.
I was impressed. Here is a piece about the open source IPOs that showed a knowledge of what open source is about. He asked some good questions and partially answered them. I think Leonard's conclusion that free software will be here 5 years from now is valid. Regardless of the sucess or failure of open source business models, the reasons that many of us do it aren't going to change. Whether Red Hat and VA Linux will conquer the world or wither and die remains to be seen. I wish them both well.
The net will not be what we demand, but what we make it. Build it well.
It's great that open source software is getting this opportunity to prove that it can be competitive. About a month ago Slashdot posted an article about SourceForge and it kinda slipped by me. I just checked SourceForge out after someone mentioned the site on irc.worldforge.org (no relation :)
VA Linux is NOT joking about making open source work. If open source fails--turns out unable to compete in the long run (quite unlikely IMHO)--it will not be for lack of effort or commitment on VA's part.
I think the SourceForge FAQ offers a lot insight into VA's vision, as seen by the guys at SourceForge. If you haven't checked this out, do it. The SourceForge site may be the OSS "killer app" of 2000. (once again MHO)
numb
I see all the advantages of open source, I just dont think theres enough money in it to make a second Microsoft. (unlike what long term VA/RH investors seem to think)
:)
:)
I hear ya... Not even a kindler, gentler Microsoft. The model doesn't seem like it would support a huge monopoly does it? No complaints here.
At the same time, though, I think the OSS software development model has a great chance of crushing Microsoft--well, as much as M$ crushed IBM. Microsoft CAN produce good software, but I don't think that's been their primary goal--maybe we'll see more of it from them when it becomes essential to their survival again. Back to the point, it's not RedHat or VA that I see doing the "crushing" -- it's everyone that's involved in Open Source.
The only big money in Open Source is from suckering investors
Heheh, well I guess that all depends on what you consider to be big money. The money is probably going to end up spread out over as many companies as it takes to get it right. I can't picture a single company dominating over open source--how could it happen? (That's not rhetorical--there certainly could be something I haven't thought about
I really think the biggest, most successful OSS companies in the long term are going to be those that give the most back (not just monetarily) to the OSS movement. It seems that RedHat and VA Linux feel this way too. They're making huge investments in the trust and goodwill of the OSS community with good reason. Reputation is going to make or break OSS companies.
Maybe they've decided that they can be inlets to OSS from the sea of money that that is floating around out there. They could try to take advantage of this situation, but then they'll lose support from the OSS community. If they lose the community's support their products become less effective. I'm hoping there is enough of a natural balance here to keep things going well.
I'm hoping there will be a natural balance between the investors and the OSS community as well. By pressuring OSS companies into purely greedy options they (investors) will get burned. By nurturing the flow of money and resources into OSS they will themselves profit.
I realize that all my comments are really just speculation, particularly that last paragraph--I really know next to 0% about finance/investing/economics. I don't know a whole lot about meteorology either (like even how to spell it) but I can still tell from which direction the wind is blowing.
numb
I don't think that IPOs like VA's and money coming from OSS can repel hackers from doing it. And, even if there will be less people doing it, the code remains. All this stuff on Metalab/SunSITE is not going to disappear. I don't do much OSS these days (I've almost burnt my flame out back in the Amiga days), but I'm official translator of GnuPG to Polish language - I did it when this was a lunatic project to write PGP from scratch, (and I was making $100/month as a student), and I'm gonna continue it when it goes as government sponsored project (and I got a Real Job). There is this anecdote about one of the founders of Sun Microsystems (whatwashisname) who as a company president still would come to office to hack compilers at night. When asked why is he doing this - he had hordes of programmers in company's salt mines, he simply said "I like writing compilers". And that's the way it is.
Well, for one, there are currently 1.66 Billion shares of Compaq (out of 1.69B total) released on the market, as opposed 4.4 Million shares of VA Linux (out of 39.7M).
Let's assume for a moment that Microsoft managed to assimilate Red Hat management (which won't happen, they're neither assholes nor idiots), and they'd decide any further Red Hat development would be closed-source where possible.
What would happen?
So, even if we didn't care (but we do), there would be no reason to go closed-source. Instead, it would mean the pretty much immediate destruction of the company trying to do it.
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The big Linux IPOs are a good thing for small developers.
For one thing, it's a great motivational boost to know that what you are doing could make you mega-rich. Some people like that kind of incentive.
Secondly, it is clear that the open source movement as a whole will benefit from the injection of cash and corporate credibility that these kind success stories bring. It's a necessary step in maintaining the progress of free software. Small developers with their eye on the ball will do well in the open source consulting and bespoke development businesses.
But most importantly, it is clear that the business model of firms like Red Hat rely upon the goodwill of the open source community. Thus, Red Hat will have a big incentive to keep the small developers onside through sponsorships, awards, share handouts etc.
These kind of activities don't cost much for a multi-billion pound company. By cultivating small developer support for their systems, Red Hat et al. will probably get better press and actually increase their share price.
All in all, I don't think there is too much to worry about. Red Hat can't renege on open source principles precisely because the market won't look kindly on any company that chucks it's mindshare out of the window.....
Why don't the developers get together for a class action lawsuit and at least get a slice of the pie?
Thanks for identifying yourself as a newbie not only to Slasdot but also to Linux as well. A quick intro is necessary...Firstly I'd like to know what grounds you want them to sue Redhat on?
Due to the nature of the GPL the developers that have contributed to the linux kernel and the Redhat distro have no beef with Redhat. Redhat has not violated the GPL in any way so that cannot be a reason to sue.
Secondly Redhat hires/supports a couple of the core kernel developers and thus these people have no more reason to sue Redhat than an employee of Dell, eBay, Microsoft or any other multibillion dollar company who draws a salary. Does this mean we can all sue our employers because our company's make millions in revenue while most of us make less than $100k a year? Thirdly Redhat did let developers get a slice of the pie with the letter...read about this here and here.
Now the only question I have to ask is; exactly how and for what reasons are developers going to sue Redhat?
It's one thing to bust your ass for your own greater glory, but how can you sit back and watch someone else profit handsomely from someone else's labor?
If you got the letter you have profitted handsomely since the IPO. If you didn't get the letter, I remember Redhat hovered between 40 & 80 for a few weeks, this would have been a good time to show solidarity for linux and invest in yourself (assuming you're an OSS developer for linux)....and you'd be profitting handsomely as well.
Finally and most importantly, OSS developers i have met were not and are still not in it for the money. I write code and give it away because I like writing code and I want people to use it and if they find any bugs and fix them whooopeee .
Lawsuit, paaah.
Bad Command Or File Name
What I think will happen is the stock will fall, and people getting wiser about overvaluing stocks.
Let's face it. We already had an example of getting rich through programming through Bill Gates. Linux IPOs doesn't change that. What Linux changed was the realization that Free[speach] (I like the way that looks...) software works as a distribution model much more effectively than propriatary software. (I find it Amazing that AOL deals with Netscape and Instant Messenger with such different philosophies. Unless it's a "screw Microsoft any way you can" philosophy...)
No Zen is good zen