The true nature of open source

The true nature of open source

Summary: In the beginning...open source was pure and unadulterated.

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TOPICS: Open Source
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In the beginning...open source was pure and unadulterated. Over time, the idea of community-build software that is free and unfettered by sticky licensing terms and fees caught on with IT buyers, and the disruption of the old order began. Now, open source (Linux, Eclipse, Java, etc.) is mainstream, with many companies giving away valuable software for free and looking for ways to gain profits from their largess.

Of course, the business model of free software isn't very attractive, so companies providing distributions began offering support and premium services. Even with support and services fees, open source, compared to traditional, proprietary software, was a bargain.

Hence, a new colony of software companies sprouted up, led by open source leaders such as Red Hat/JBoss, Novell and MySQL; smaller disrupters such as SugarCRM, Greenplum, MuleSource, Scalix, Zimbra, Digium, Alfresco, Socialtext, EnterpriseDB, Ingres, CollabNet, Hyperic, Qlusters, JasperSoft; and now everything under the Sun.

Open source is becoming so attractive that even companies with proprietary technology are taking the open source route. Among the large vendors, Sun has thrown all of its software into the open source pool. Other large vendors don't feel compelled to open source their code, mostly because they don't believe that their proprietary software business model is threatened.

Smaller companies seeking to make inroads against larger competitors are liberating their code and going open source. Wiki maker Socialtext, for example, went from proprietary to open source last year. This week RadView Software will launch its WebLOAD Internet performance testing solution, a product with a ten-year history, as an open source solution. This is a company with 1,600 customers and a product with more than 250 enginneering years of development, but not a great profit story. The company, which is publically traded, just took in $2 million to "restore confidence" in the company's financial position. By offering a less costly solution and tapping into the community for assistance, enabling an ecosystem, lowering marketing cost, RadView hopes to gain more customers and market credibility.

Of course, the secret to success for open source companies is adding additional  proprietary management or productivity features in a "commercial" version. In other words, certain versions of open source are not so open. You have the option of free software without support and extra features; free software with support that many include some proprietary code, such as for management or multi-server support; and a commercial edition that includes a significant dose of proprietary code.

At that point, open source software doesn't look that much different in theory from proprietary code--develop some unique intellectual property and charge whatever the market will tolerate. Adding value on top of an open source base is a superior model, because customers only have to pay for what is unique. When a certain feature is no longer unique, it quickly move into the open source pool. 

At the same time, open source companies are vulnerable to other companies that pick up the open source code and build their own business around it. But, it turns out that most of the code developed by open source companies is done internally, by staff engineers, which again resembles the way proprietary code shops operate. 

It seems that the new software business model is hybrid, open sourcing the basic engine and allow the community to test and contribute to the corpus, but keeping proprietary the code (and the engineers) that makes the engine perform at its best.

But, the reality is that proprietary software vendors still rule. Are they dinosaurs nearing extinction? No, but they will feel increasing pressure to take open source more seriously as part of their business model, just as on demand, browser-based services has inspired new thinking. Salesforce.com, for example, has build nearly a billion dollar in annual revenue business at the expense of Oracle, SAP, Microsoft and others. But, last time I checked, salesforce.com was proprietary software delivered as a service. Even open source CRM vendor SugarCRM keeps a relatively large percentage of its code proprietary in its commercial version.

Economics don't favor pure open source. The future is hybrids--cars, software, people, pets. It's better for the planet... 

 

Topic: Open Source

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  • That's why we need GPL3!

    ...No more gimmiks with 'commercial' versions or proprietary binaries included.
    Heck, if this is 'open source' for you, than even M$ can claimed that they use OSS!
    Linux Geek
  • So the closer to proprietary software...

    ... open source software companies can get, the greater their chances for survival.

    What distinguishes open source from proprietary, then?

    The fact that open source companies receive a significant amount of their labor without cost. A donation to profitability.

    Thought of that way, unpaid time on open source projects could be considered a charitable deduction. Except that the result is increased company profits and nothing for human betterment.

    So don't expect open source time to be an income tax deduction any time soon, not with Congress recognizing that paid software employment is a significant part of the economy.
    Anton Philidor
    • Time to change trains.

      Anton, you need to get off that train you're riding, it's on the wrong track, and going the wrong direction. Open source is here to stay, and expanding.

      You need a new ticket, son.
      linux for me
    • Re: So the closer to proprietary software...

      [i]...with Congress recognizing that paid software employment is a significant part of the economy.[/i]

      Is it really? Microsoft has about 70,000 workers and provisions about 90 percent of desktop and office productivity software.

      How significant can it be if 90 percent of it will fit in Appleton, Wisconsin?

      Thought of that way, the residents of Appleton make money on software while the rest of the country spends money on software.

      Sound like if you want to have an economic impact...


      :)
      none none
      • Microsoft is the entire US software industry?

        Judge Jackson need not have been so finicky in the anti-trust trial. He had to identify a market for Microsoft to monopolize, and came up with Intel-compatible pc's.

        Microsoft tried to argue that all software was in its purview.

        Judge Jackson should have agreed with Microsoft, saving time and not changing the company's market share, apparently.

        Actually there is more to software than the operating system and office productivity suites. Not that anyone thinks about the miserable remainder...
        Anton Philidor
        • Re: Microsoft is the entire US software industry?

          [i]Actually there is more to software than the operating system and office productivity suites. Not that anyone thinks about the miserable remainder... [/i]

          Oh, way more, I know. But most of that is in-house programming or custom app programming and these sectors aren't threatened by free software.

          So no, MS is not the entire US software industry, but it nearly the entire US software industry that is worroed about free software.

          I still say if you take only the sector that's threatened by free software, the poor retail programmer unable to feed his family you constantly bid us to consider, that's not a significant source of employment.


          :)
          none none
    • Significant Free Labor

      Actually I remember a statistic that said something like 98% of the incorporated Linux kernel contributions came from a core set of developers, all of whom were paid to contribute to the Linux kernel.

      Of course not all products follow this pattern. Many are around 100%, all coming from one company. That way the intellectual property rights are nice and tidy.

      If it wasn't for the plethora of incompatible OSS licenses combined with an unhealthy does of not-invented-here syndrome I would agree that OSS reduces programmer employment by eliminating duplicate effort.

      However, reality seems to be quite different.
      Erik Engbrecht
  • As viable as socialism (i.e., not at all)

    Wow, you mean I could spend countless hours developing commercial-grade software that will never turn a profit for me or my employer? Gee, where do I sign up?

    If you remove the profit motive from software development -- or ANY industry, for that matter -- you'll get socialism's usual result: abject failure.
    Churlish
    • What about Sweden?

      Sweden does very well with a high GDP per capita with a world class eduction and health care system. The largest political party in Sweden in the Swedish Social Democratic Party who are members of Socialist International and the Party of European Socialists.

      Did you know the Absolut Vodka is produced by the V&S Group which is a wholly owned entity of the country of Sweden. Did you know that more than 40% of imported vodka sold in the United States is Absolut Vodka.

      So please use due diligence before postings such under nonsense.
      MisterMiester
      • For a while longer, maybe.

        Imagine, then, what the people of Sweden could do if they were allowed to control their own money. Productivity would skyrocket, overall wealth would grow, and government would shrink ? as it should.

        Sweden's temporarily operable, humane socialist economy is an anomaly. (To a lesser degree, Canada's economy is as well, although serious cracks are showing in Canada's vaunted universal health care system: http://www.heritage.org/Research/HealthCare/hl856.cfm.)

        Elsewhere the establishment and defense of such wholesale government control has overwhelmingly led to repression and deprivation. (E.g., the Soviet Union, Cuba, China, North Korea, Venezuela, etc., etc.)

        Why do I say "temporarily operable"? Partially due to Sweden's unemployment rate ?

        http://www.neolibertarian.net/articles/sanandaji_20060414.aspx

        ? and partially due to the trend it suggests. If an economy provides no motivation for its people to work harder or innovate, in time more and more people will realize that it's easier to collect government stipends rather than contribute to their nation's productivity.

        Even that unjust model can survive as long as that country's remaining workers are able to bear the growing tax burden imposed by those who choose not to work. Inevitably, however, a tipping point is reached: the welfare pool simply becomes insufficient to supply the (ahem) "needs" of the un[der]employed.

        It's happening throughout Europe; it's happening in America every time the U.S. adopts increasingly socialist policies: individual wealth (read: liberty) shrinks under government control, and once-vibrant economies stagnate.

        (By the way, to forestall cries of "neocon," let me add that I wholeheartedly criticize the Bush administration for gross overspending as well.)

        When will people realize that "redistribution of wealth" merely redistributes wealth OUT of the hands of entrepreneurs, employers, and working people and INTO the hands of vast government bureaucracies who funnel [i]part of it[/i] to people who contribute little or nothing?

        As for Sweden: enjoy the free health care and education while there are still workers left to pay for it.

        To those languishing under socialism's inevitable outcome elsewhere, find the courage to brave repression and change your government so that you can help yourselves.
        Churlish
        • I'm sorry ...

          Once you linked to the Heritage Foundation I stopped reading, plus you sound like a Randroid so there is no sense in argument because it will be pointless. Besides you comment was ANY industry which I proved false.
          MisterMiester
          • "Randroid" ... ha! I like that.

            Randroid?

            Eh, I read [i]Atlas Shrugged[/i] and found it rather tortured in places: too many characters who exist only to proselytize Rand's philosophy, too many others who are merely strawman opposition for her protagonists to browbeat. I've been told that [i]The Fountainhead[/i] is better; I might get around to it someday, but I'm definitely no Rand fanatic.

            I consider myself a compassionate conservative ? a term the political left loves to deride, I know. Do I believe that people who fall on hard times should be left to starve in the gutter? No. Do I believe that orphans and the the disabled should be forced into workhouses? Of course not.

            I think that there should be reasonable safety nets for people who have been simply blindsided by misfortunes beyond their control, who make mistakes, or who haven't yet matured into their economic responsibilities.

            That said, I also believe that these "safety nets" neither require nor justify a cradle-to-grave nanny state: that is, a government that micromanages every facet of its citizens' lives via onerous regulations, taxes, and the allegedly "free" services that those taxes fund. (?Services for which there are often no private alternatives, mind you.)

            Although some measure of temporary governmental aid is useful to sustain people [i]until they can regain their economic/productive footing[/i], an individual's prosperity should ultimately be his or her own responsibility, not that of the state. Put differently, government should act as a guardrail in its citizen's lives ? and a low guardrail at that. Government should [i]not[/i] be a set of rails which bind people to a single, unalterable path ? even if that path seems like a safe one.

            Meister, I'm sure that neither of us will convince the other of [i]anything[/i], but consider this: despite America's import duties, sales taxes, "vice" taxes, etc., Absolut vodka is still comparatively cheaper in the States than it is in Sweden. However, if U.S. taxes rise to Swedish levels ? chillingly possibile under the current Democratic congressional majority ? I guarantee that Absolut's U.S. sales will plummet in direct proportion to American citizens' declining personal wealth.

            If "a rising tide lifts all boats," consider socialism the [i]Titanic[/i].
            Churlish
          • The reason the Scandinavian model works...

            Is that it bucks the trend of handing over control of resources and profit generation to the multinational conglomerate, the big corporation which has so much wealth and power that it can then dictate policy to the governments which allowed it to exist in the first place. In Scandinavia, business is not taxed - the individual is taxed. Thus, people are encouraged to invest in... you guessed it... business. What does this lead to? Wow, lots of small thriving businesses. And a thriving economy. Our model in North America is, crush the little guy by whatever means necessary, tax the little guy but give tax breaks to the rich! If a corporation makes billions, give them a tax break. If an individual starts a business, tax him and fee him to the hilt - break him down. Now which model, Mr. Churlish, results in distribution of wealth, and general societal productivity? Your rhetoric dismays me. Sure, let's just carry on enriching the corporate masters, after all we're a "free country"!
            Kamikaze_Ohka
          • Don't misinterpret me, please...

            Point taken, Mr. Kamikaze, but you're twisting my words: I'm not defending tax breaks for the much-maligned "big evil conglomerates." In fact, I believe that a much simpler and more transparent tax system would lessen the influenece of special-interest lobbying of all stripes.

            Likewise, you imply that I think corporations do no wrong ? please. I'm well aware that most corporations will do as much as (and often more than) they're legally allowed to do in the countries where they operate. How far those legal limits should extend is a different debate; my point here is that I'm not whitewashing the corporate profit motive.

            Finally, I acknowledge that Scandinavia is no Soviet gulag. No one is mounting sails on tasteful Ikea bathtubs to cross the North Sea to reach England.

            The peaceful "success" (to date) of the socialist experiment there speaks more about 1) government tolerance for private industry, albeit heavily regulated, 2) the richness of Scandinavia's natural resources, and 3) its peoples' tolerance (so far) for extremely high tax rates. I still maintain that unemployment will remain a growing problem, however.

            Similarly, I fail to see how high individual tax rates lead to [i]greater[/i] investment in business. Again, imagine what would be possible if people retained control over more of the money they earn?
            Churlish
      • Clarification: I realize that Canada's govt. is NOT purely socialist...

        ...I'm aware of this.

        But universal, government-controlled health care is a socialist concept, and is thereby flawed and unsustainable.
        Churlish
        • Good job Coppertop

          "Socialist" must be thereby flawed and unsustainable? Wow yu are a capitalist drone, aren't you? Well guess what? "You're a slave, Neo..." Good job, coppertop. Keeping playing into the hands of the real power behind the throne. I for one admire the socialist goverment's ability to regulate and control the power of rich persons who seek nothing other than more power and riches to support their largesse and their continued oppression of those they "employ" at slave wages for bare survival whilst they have a ridiculously fat and decadent lifestyle, bold to the point of disgust and utterly disgraceful in the face of a collapsing world ecology and the millions of poor the world over who barely have food to eat. For shame.
          Kamikaze_Ohka
          • Again, misinterpreting...

            Should capitalist economies be entirely heartless, without safety nets for the unfortunate? No. Do I believe that corporations are blameless? No. See my posts above; I don't have the time or desire to repeat myself.

            However, my objections to socialism involve a word that's usually bandied in "progressive" circles: "sustainability." A system that relies on the willingness of a shrinking percentage of workers to subsidize a growing percentage of un[der]employed people does not seem sustainable.

            Most people are driven by incentive. This is not to say that those people are greedy or heartless; merely that they are more inclined to work harder and to generate new work for others if they believe that they will be rewarded for their efforts. Remove that incentive, and people will produce much less.

            By the way, I now understand what you were saying in your post above, Kamikaze: Scandinavians are more inclined to start small businesses because that money is [i]not[/i] taxed while personal income from an employer [i]is[/i] taxed? I haven't had time to fact-check this; for now, I'll simply maintain that the costs of massive taxation are passed along in the prices of every product and non-public service one finds there.

            In closing, I'm not a drone; I merely prefer to control my own destiny rather than abdicate that responsibility to a government.
            Churlish
    • RE: As viable as socialism

      Open Source is the evolution of free market.
      The normal business model fails in the development of software. As a technician I would never install software that is included with any new piece of hardware. Microsoft has shown us that their OS's aren't really ready for prime time until about 18 months of updates(and I am not a MS hater). The best way to satisfy customers is by supplying software through the best method possible, Open Source. Only a vigorous free market could have done created the open source model. If I were a developer I would lust to have my code included in as many Open Source projects as possible as a means to market my own skills in a free and open job market. For you I hope that Open Source software is last on a long list of socialist concepts that need addressing.
      I have taken a few coding classes and one of he first things I have learned is that software is never done, always a work in progress. Our current business model has a problem with this as it seeks to always push out the brand new. The result is software that does not work properly. Coding teaches the coder quickly that the machine will do EXACTLY what you tell it, so be exact in what you code. This exactness does not come through the current business model of software development easily. Open Source coding is not distracted from this exactness and businesses(and hopefully coders) are learning to profit from it.
      edcoyle
  • Who can get the source?

    Suppose a company only provided the binaries and source code (under an OSI-approved license, say GPL) to its paying customers. Would that still qualify as open source in your mind?
    Ed Burnette
    • Re: Who can get the source?

      [i]Suppose a company only provided the binaries and source code (under an OSI-approved license, say GPL) to its paying customers.[/i]

      What would prevent the paying customers from distributing the source code?


      :)
      none none