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?" "

Comments

Re:Why?

[Suydam]

Why?!
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.

Re:All I care about is products & GPL

[Jon Peterson]

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 :-)

It's not the money that matters but the means ...

[LL]

Profit may seem to be incongruous with free (speech) software but in fact it is intrinsic to the system when you consider it as a proxy measure for the efficiency of delivering a final good/service. For example instead of hiring 100 water carriers to hustle bottled water, I borrow a billion dollars and build a pipe network maintained by 5 engineers and charge people a lower cost for bulk water, then the profit is a measure of freeing up 95 people to do more useful tasks. Thus profit is a complex formulae combining risk (entrepreneurship) + talent (skill at creating a more efficient business system addressing a market need) + management (motivating everyone and keeping out competitors). The point is not that you can cook a better hamburger than McDonalds (not very difficult) but that they can provide fast food at an affordable cost at a consistent level of standard (no comments about quality please) and franchise it globally.

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

1. bundled packages with forced tying
   
2. depressing and deprecating competitor's products to force a buyout at lower than market price
   
3. deliberate obfuscation of standards/APIs create barriers to subsitution
   
4. consistent history of providing bogus delivery dates for non-finished products
   
5. defining and imposing in-house specifications rather than common interoperable standards
   

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