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Open source still not the first option

By | February 24, 2010, 6:20am PST

Summary: Open source may become the default position of customers, but it is still not the first option when a market is new. What is happening in building management is instructive to the whole open source community.

Open source may become the default position of customers, but it is still not the first option when a market is new.

This is a point open source executives like Matt Asay continue to struggle with, one that closed-source advocates continue to hammer on. (Picture from the Breakthrough Institute.)

Open source is shared freeloading.

Not that there’s anything wrong with that. Once a software process is established, the shared freeloading of open source cuts costs for what is now “basic” to a bare minimum.

But when a market is new, like smart buildings that save energy, the source will stay closed. This is true even at open source advocates like IBM. Return on investment is what’s touted, but customers first need to return the developers’ investment.

Is there anything wrong with that? I don’t think so. Innovations that save early adopters money must get their price in order to justify investment in a small market base. Without the hope of profit, why do it?

At the same time, such profits should not become permanent, or entrenched like the monopoly rents Microsoft enjoyed (and continues to enjoy) from Windows and Office. Open source, given time, whittles away those profits. It sunsets them.

In the case of building management, there is an open source alternative called OpenLynx, but it is having trouble gaining traction because the mass of building managers are not convinced of its utility. They have yet to be sold.

IBM or Cisco can sell them. So can Johnson Controls, IBM’s partner in its building management deal. But sales and marketing cost money. That money comes from proprietary profit.

What is happening in building management is instructive to the whole open source community. In building management we are moving rapidly from the start-up phase into mass adoption, and big proprietary players are moving in to merge energy management with mainstream computing.

As this market moves through the center of the s-shaped demand curve, there will be a lot of money to be made. The optimal price will be a little higher than the market wants to pay.

But as any market approaches saturation, the optimal price drops. Proprietary vendors resist this drop. But open source provides the market pressure that can force it. The proprietary game moves on, and open source carries the day.

Open source is market evolution in action.

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Open Source, Dana Blankenhorn

Dana Blankenhorn has been a business journalist for 30 years, a tech freelancer since 1983.

Disclosure

Dana Blankenhorn

Dana Blankenhorn has been a journalist, writer and part-time futurist for over 30 years.

At the present moment I run only a personal blog in addition to my ZDNet open source blog.

DanaBlankenhorn.Com has the subtitle The War Against Oil. In the past I have used it to write about political history, e-commerce, personal matters, some ideas related to open source, and The World of Always On, which is the idea of using sensors, motes and RFID to turn WiFi links into platforms for applications which live in the air.

My IRA account at Schwab holds a few tech shares, most notably some Intel and Applied Materials, but there are no open source companies in it. I don’t even own any CBS stock.

Biography

Dana Blankenhorn

Dana Blankenhorn has been a business journalist for nearly 25 years and has covered the online world professionally since 1985. He founded the Interactive Age Daily for CMP Media, and has written for the Chicago Tribune, Advertising Age's "NetMarketing" supplement, and dozens of other publications over the years.

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RE: Open source still not the first option
gaberdiye03 Updated - 21st Jun
@Economister I do not even use Linux. All the family computers run pembe maske energy balance oyna oyunu moliva orjin krem tutune son nanomatik complex 41 new fx15 XP or Vista, except for my son who dual boots into Ubuntu
View in thread
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Doesn't look like Linux is ANY option for 99% of the planet.
ths40 24th Feb 2010
http://marketshare.hitslink.com/report.aspx?qprid=9&qpcustom=Linux
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The usual mindless rubbish (nt)
Economister 24th Feb 2010
nt
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What's the matter Sparky? Truth hurts too much? (nt)
ths40 24th Feb 2010
grin
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No, it is your utter lack of ...
Economister Updated - 24th Feb 2010
functioning neurons that hurt. I expect at least SOME evidence of intelligence from posters in this forum.
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ROTHFLMAO!!!
ths40 24th Feb 2010
You're such a loser.
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That was intelligent
Economister 24th Feb 2010
Just like your earlier ones. I think you have pretty much convinced most of us by now.
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Then you will continually be disappointed...
Linux User 147560 Updated - 24th Feb 2010
"I expect at least SOME evidence of intelligence from posters in this forum."

You're also asking for a miracle! There are a couple but they are far and few between. devil
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Another Linux Lemming in denial. (nt)
IT_Guy_z 24th Feb 2010
...
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Another moronic post
Economister 24th Feb 2010
I do not even use Linux. All the family computers run XP or Vista, except for my son who dual boots into Ubuntu.

If you are indeed and IT guy, I pity those who pay you.
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RE: Open source still not the first option
edward polling Updated - 4th Jul
Open source may become the default position of customers, but it is still not the first option when a market is new. What is happening in building management is instructive to the whole open source ipad bag blog sutudeg education news and pclos hwdb community. l
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RE: Open source still not the first option
gaberdiye03 Updated - 21st Jun
@Economister I do not even use Linux. All the family computers run pembe maske energy balance oyna oyunu moliva orjin krem tutune son nanomatik complex 41 new fx15 XP or Vista, except for my son who dual boots into Ubuntu
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Behind the link
DanaBlankenhorn 24th Feb 2010
It's a chart showing accesses of Internet
resources via Linux. In other words, client
accesses of server resources.

It has nothing to do with server shares. Linux has
about half of those.
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RE: Open source still not the first option
zakkiromi Updated - 30th May
Proprietary vendors resist this drop. But open source provides the market pressure that can force it. k
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It is for me
Linux Geek 24th Feb 2010
and I can feel liberated from the M$ tyrany.
The government should demand OSS for the people.
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Linux failed on its own accord
Joe_Raby 24th Feb 2010
nt
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It's for me
scruff40 24th Feb 2010
GREAT idea COMRAD
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....
Badgered 24th Feb 2010
I can feel liberated from the M$ tyranny. The government should demand OSS for the people.

In one sentence you celebrate freedom, and in the second you want the government to force an OS on "the people". You're one seriously screwed up individual.
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The universe is unfolding as it should
Economister 24th Feb 2010
New SW categories are by definition special purpose and will attract the profit oriented players. When these SW categories grow, mature and become more and more commoditized/generic, it becomes natural for open source to slowly take over. This allows a continued drive to a lower cost for most of the players in that market. The profit oriented SW players then move on to new categories.

This is in my view a universal truth if the market is not controlled/influenced by monopolistic players or legislators, and even MS will eventually be unable to escape the transition to open source for what are by now mostly generic computing functions.
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And that 1% market share is going to make it all come true...right?
IT_Guy_z 24th Feb 2010
Keep dreaming.
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Just because...
Economister 24th Feb 2010
you are incapable of seeing the big picture does not make it wrong. Just look at all the categories that open source is already a major or dominant player, and the geographic regions where Linux is making major inroads on the desktop.

Ignorance is bliss.
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If "Ignorance is bliss"...then you must be one happy camper. (nt)
IT_Guy_z 24th Feb 2010
...
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That's 1% of clients running Linux
DanaBlankenhorn 24th Feb 2010
I don't doubt the accuracy of the chart, but it's
about desktops. Linux has just 1% of desktops.

But Linux is not the same as open source. Firefox
is open source. Even on Windows. It counts as open
source.

It's like saying apples have a tiny share of the
orange market. Of course they do.
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I know that Dana.
IT_Guy_z 24th Feb 2010
I just like to pull their collective chain every once and a while.

Linux folks are even more rabid about their product than Apple folks, so it's like shooting fish in a barrel with them.

And by the way...I use Windows, OS X AND Linux, as well as other open source applications, on a daily basis. I have no preference for ANY operating system. They all have their strengths and weaknesses.
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Then you're off topic
DanaBlankenhorn 24th Feb 2010
Because the subject of this post was not desktop
Linux. It was open source. And about the nature of
markets.
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RHCE is the hottest CERTIFICATION (I am an RHCE)
tux_engineer 24th Feb 2010
Linux is the KERNEL not the OS!
Linux distro is the compilation of many packages
put together by a vendor or project whatever.

The USA is slipping behind other countries,
Open_Source is and will continue to dominate
MS software with its ability of coders to
innovate and create new choices and options
for the end_user.

Good luck on this mindset, I am sure
'point & click' brings a lot of money in a
career nowadays...

Companies want a well rounded, Linux/Unix
distro skill set with in house solutions
than Spending $$$$$$ on bloated out
buggy software.
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As with truth, life is what we make of it.
HypnoToad72 24th Feb 2010
Profit-oriented players don't even give a bleep about government or customers, even if customers and government give them lots of money. Just their bottom line. The universal truth, that can't be countered by any aphorism, is that people will reject their selfishness at some point.
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proprietary = someone to blame
sparkle farkle 24th Feb 2010
the main difference is that people don't trust the unknown masses to fix their problems. it's the basic difference between communism and capitalism, communism has only the state to celebrate, and capitalism has winners and losers. The idea that we can change a winner to a loser creates an impression of accountability, misplaced or not.

The truth is that when people are forced to confront issues and situations that they don't/can't understand they want a "personal" relationship, and open source does not provide that "comfort" whether or not the ideas are better. Unfortunately, most corporations these days care less about the individual or project less than an open source project, which people are donating their time and energy trying to do good for their neighbor.

Its the open source brand that has a bad name.
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A lot of truths but....
Economister 24th Feb 2010
given the phenomenal success of open source in a lot of SW categories, I have some difficulty with the sweeping generalization in your last sentence.
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Communism?
DanaBlankenhorn 24th Feb 2010
Open source is communism? Really? Really.

Open source is contract law. Contracts are
freely entered-into agreements within a market
economy.

And please don't turn capitalism into an -ism,
like communism. Markets are great. I love
markets. But I distrust all -isms, because they
oversimplify. They use words like "always" and
"never" that just don't occur in the market,
where transactions are always negotiable.
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Really Dana? Open source is socialism
tonymcs@... 24th Feb 2010
Of course by just mentioning the word socialism I already have mindless right wing Americans frothing at the mouth, but they'll just have to accept that socialism isn't a dirty word in the rest of the world.

Open source is socialism, pure and simple. I'm surprised you can't see that.

"a system of society or group living in which there is no private property"

So we now understand why open source doesn't work - it's a small haven of socialism in a rabid capitalist market wink

It's almost as funny as the much revered Star Trek - another socialist Utopia.

I sometimes wonder if Americans have to believe two impossible things before breakfast wink
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You don't have have "mindless right wing Americans frothing at the mouth"
Ole Man 24th Feb 2010
Instead, you are but one of numerous mindless left-wing Microsoft controlled nuts frothing at the other end, seeking a crack in open source's shell to attack.

But the lack of a crack doesn't bother them a bit. They'll carry on their dance of delusion atop a solid rock.

http://vids.myspace.com/index.cfm?fuseaction=vids.individual&VideoID=47417247

Falling Slowly2
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"they want a "personal" relationship"
Ole Man 24th Feb 2010
The truth is, most people are growing up and learning that they don't need to make love to a computer to get the job done.

Microsoft's reign over computerdom was due to user ignorance. and users are not as ignorant as they were a few years ago, and getting more savvy every day.
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OSS has conflicting "business model" goals
Qbt Updated - 24th Feb 2010
If you try to have some sort of "business model" using OSS, you run into conflicting goals. Proprietary does not have this problem.

Closed software:
1. Make it so good, lots of people buy it.
2. Make it so good, few people make tech support calls.

OSS:
1. Make it so good, lots of people use it.
2. Make it so bad, many people need support contracts.

So you can see how OSS has a conflicting model. With closed software, you improve requirement 1, you automatically improve 2 as well.

With OSS, you improve requirement 1, you automatically reduce the effectiveness of requirement 2. And vice versa. Either way, OSS will always lose that battle.

And, "Open source may become the default position of customers". Really? That is news to me. Any proof whatsoever of this, or did you just state an opinion (dream) as if it was a fact?
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Business models
Economister 24th Feb 2010
I think you may be a bit naive. Most closed source business models do not focus on high quality and low support costs. Instead they try to get their hooks into you so you cannot leave as well as prevent others from competing (can you say SW patents?). That is where a very large percentage of their effort goes, and from society's perspective, this is entirely unproductive.

Open source inherently does not need a business model. It is collaborative with no expectation of a payback. Building a business around OSS is fundamentally a different issue altogether. You will never be hugely profitable, but if you understand your customers' needs and serve them well, you can make a good living. Society will also be better off because the consumers of SW and related services will ultimately have more money left over for future oriented purposes.
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Models are not markets
DanaBlankenhorn 24th Feb 2010
Just as -isms are not answers, models are not
markets.

What you did was build yourself a nice little
straw man there, and then knock it down.

The idea that the open source business model
requires software to be bad so people will have
to buy support is such a straw man.

It's not true.

People buy support contracts not just for bug
fixes, but to support the ecosystem that
delivers them help in other ways. As, for
instance, Acquia supports Drupal. They also buy
support for education, for training, and to
assure that the software will continue to evolve
and grow.

I could build an equally lovely straw man to
attack proprietary products with. You buy it
because you have to. That's an equivalent straw
man argument.

Because with open source competition -- with
market competition in general -- you don't have
to.

Open source is a market phenomenon, made
possible by the Internet.
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Oversimplification
Theli Updated - 24th Feb 2010
1. Some "closed software" come with additional
paid tech support.
2. A lot of "closed software" is free,
providing no direct revenue for the developer.
3. Most OSS doesn't provide additional paid
tech support.
4. There are other business models than paid
tech support.
5. A lot of popular software components are OSS
(Webkit, OpenGL, Linux...), and deliberately
sabotaging them (or whatever it is you are
suggesting) would have an adverse effect on
products that use them.
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I left Windows because the only thing "good" about it is the phrase
HypnoToad72 24th Feb 2010
"good grief, how do they keep making money on this slop artist's pile?!"

"The new normal" - all the old rules are gone. Most of the rules hinder profits. Why else "delegate" quality control to those of us who turned on "Send error reports to Microsoft and when we do,. please provide a description of the problem".

I work with a Microsoft environment and I'm not the only one who complains about shoddily-compiled products they spew out. "Make it so bad, many people need support contracts". Microsoft does that like all the OSS people do. It adds to their bottom line.
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Yes, an oversimplification, yet the root of all OSS "business models"
Qbt 24th Feb 2010
.
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Very True, but also
Aussie_Troll 28th Feb 2010
You have to look at model incentive,

The incentive for OSS is to "scratch an itch" or to create something that they have not got. (usually something someone else has that they would like to use as well).

In the proprietary model, you go to work, and you do you're best to create something, a product that people are willing to pay for.

In OSS you do not have that incentive, you're incentive mabey to support you're income with "maintenance and support".

Trouble is the OSS model, fails to understand that people want to buy products that they like, and that get the job done for them. Most users are not computer experts, no more than most car drivers are expert mechanics.

OSS has little understanding of this concept, and see's at as a technical failing of "users" to not understand the technicalities of computers and software.

OSS does not write software for the average user, the effort into UI design, and consistancy is not there, OSS looks like it's written by amateurs for amateurs, it still looks like a hobby OS.

Sure, it's handy to use OSS in the back room or serving up WEB pages, but that does not require much in the way of direct user intervention.

User intervention, people actually being productive day in day out with linux just is not seen to be happening, sure some Linux guru's might be able to some specific things well on OSS. But for general purpose, and normal users, who are not computer experts, and who dont want to be either.

Can get the job done quickly and efficiently with Windows products, and when it comes time for them to commmunicate with other groups there is a common framework that everyone knows.

OSS is trying to play catchup with a moving target that is moveing faster than OSS is, so the gap is continuously widening.

I'm Sorry all you Linux fans, but im using Win 7 64-bit on a fairly old PC, and it is light years ahead of any OSS offerings.

MS is moving forward far faster than OSS, it's clear, OSS seems to waste far too much time fighting MS and playing politics than they are in creating products that can stand on their own merit.
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This is why I can't stand OpenOffice
aep528 24th Feb 2010
Because open source seems intent on making a "free"
version of everything instead of innovating something
new. I don't want a different bloated office suite. I
want something new. Google understood that, so now we proprietary web based office suites instead of better
free office products.
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Unrealistic expectations?
Economister 24th Feb 2010
In my opinion, most innovation will always be in proprietary (closed source) SW. The profit incentive is an extremely powerful motivator, as it should be. Society has benefited tremendously from this for hundreds of years. Most markets eventually end up as commodity markets however, when the technology matures and the scaling of production really starts to pay off (and patents expire). This is where OSS really shines, because its "cost structure" serves commodity markets well.

In light of this I do not understand your objection to Open Office. If I need an office suite for generic document processing and OO meets my needs, why on earth would I pay MS for their product? If you are looking for leading edge innovation, then a proprietary vendor may be your best bet.

My fist microwave oven set me back almost a grand 30 years ago, which in today's dollars is two or three times that amount. Now I can go out an pick one up for not much more than a hundred bucks. Computers used to cost $3000 to $5000 (again much more in today's dollars). Now they cost a few hundred and they will go lower. Open source will be playing a very important part of transforming the computer market to commodity status. Producers do not like commodity markets because abnormal rates of return are very difficult to come by. Consumers benefit tremendously from commodity markets as illustrated above. Their standard of living improves when the prices for the goods they buy fall.
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Like Microsoft will agree to what you said either...
HypnoToad72 24th Feb 2010
See, a corporation's first and only venture in "the new normal" is to bring in profits. If that means ramping up costs, adding in licensing policies and/or raising costs, freezing or lowering wages, taking corporate welfare despite always posting billions in profits, coming up with patents and than throwing a fit when somebody does the actual work and then they spring it on everybody... (I'm not refering to the VFAT issue, per se...) the list goes on and on. Workers are walking liabilities on the job, but off the job they become walking wallets.

Of course, the workers will stop seeing any desire to innovate as well, but what can you do... even bankers whine that, and look at what little they do (raise interest rates!).
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Paid by MS bot networks...
tux_engineer 24th Feb 2010
Brought to you by the MILLIONS of bot net Windows machines.
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Open_Source powers the Internet today...
tux_engineer 24th Feb 2010
ALL routers/switches/servers/devices run some sort of Unix/Linux distro. What a fool, I guess MS is powering DNS now for everyone...
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Open source has taken too many people for a ride
LBiege 24th Feb 2010
The credibility has been gone a long time ago after people realize it's all hype w/o true value.
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Open source is the first option
pvescuso 24th Feb 2010
Dana,

I don't disagree with the overall premise that a 'complete' open source offering may not be the first option for a new market. However, the way open source is used, at least in my experience with customers at Black Duck, is the hundreds of thousands of components that are available on the Internet make up varying degrees of just about all new applications and products. Is it 100% of the code? No, but it's usually a significant portion, and in some cases the majority of the code is open source. I'd go far as to say for a new business/start-up, open source components are the first option, then it's a case of what do we have to write/develop on our own.

Peter
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OSS = Me too software
Cylon Centurion 24th Feb 2010
So why do you think it'll be the first option?
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Open Source, when you just don't have any money
tonymcs@... Updated - 24th Feb 2010
That's the defining characteristic of open source. If you can't afford real professional software, then you make do with a 20C trailing edge concoction either written in a garage or propped up by a proprietary company desperate to try and make any money out of it.

A lot of people want to believe the fantasy (and that's most of the posters here) but they obviously don't use it and don't customise it or they just have no idea what modern software looks like.

As a safety net it's great and if you don't have the money it will let you hobble along and surprise you each time as each new version breaks the last and you'll wonder why on earth someone thought it was a good idea to let programmers write documentation.

The only reason to have open source as the first option is to have no other options wink
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Ha ha! Microsoft when you have no friends
Ole Man 24th Feb 2010
and you have to tie a pork chop around your neck to get the dog to play with you.

Don't expect any sympathy from open source when Microsoft's WGA malfunctions and labels you a pirate, and you can't log in to MSN.

http://social.microsoft.com/Forums/en-US/communicationsserveredgeservers/thread/905dd7c9-aff4-4c7b-b87e-e88b85c0298c

I have recently setup Public IM connectivity. I'm able to successfuly IM with AOL and Yahoo contacts. I cannot communicate with MSN contacts, communicator lists them as Presense unknown.

Problem resolved. It wasn't a problem with my configuration. I contacted Microsoft and opened a case. It took a long time (maybe 2 or 3 weeks), but I eventualy got an email response that the problem was resolved. I tried and confirmed that MSN connectivity had started working.



When I originaly purchased the PIC licenses, I incorrectly defined the FQDN for my edge interface. I was unable to correct this through the open volume web site (https://licensing.microsoft.com) so I made a call to Microsoft and they corrected the problem but it took a few weeks. About a month after the FQDN issue was resolved, I still didn't have MSN connectivity. That's when I contacted them the second time. Maybe my original FQDN problem was the cause for all the delay, I don't know. But the bottom line is that other than the original problem with the FQDN, I just had to wait for Microsoft to enable the PIC service for me.

Jeez, "a few weeks"? "I just had to wait for Microsoft to enable the PIC service for me"?

And you're dissing open source? Ha ha!
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Building Management is a bad example.
peter_erskine@... 25th Feb 2010
Naturally a company like that specifically sets out to develop their own, saleable, commercial private hardware and software solutions.

Where a solution is required BY THE COMMUNITY (not a Company) then an open source development is the first and only real choice.

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