Where's the money in open source?

Where's the money in open source?

Summary: Asking about open source billionaires in 2008 is a bit like asking about manufacturing billionaires in, say, 1760. There's Matt Boulton and Josiah Wedgewood.

TOPICS: Open Source

Matthew Boulton from WikipediaOur own open source executive, Matt Asay, asks today why he's not rich.

Maybe because you're wasting your time on journalism?

First rule of this profession, taught me by the late Prof. George Heitz at Northwestern three decades ago. "If you want to make a good living, get a spouse with a good job."

Anyhoo. The question is based on a Wired piece speculating on the coming wealth of open source barons. As though the only reason to write software is to cash out.

Fact is there are already plenty of open source billionaires, starting with the founders of Google and their "adult supervisor," Eric Schmidt. (Since he was previously called the "father of Java," and Java's now open source, maybe he counts twice.)

As multi-billion dollar companies move toward the open source paradigm, shouldn't their CEOs count too?

Of course, as Bernard Golden writes, this is the wrong question. Open source isn't just a business model or a development model, it's a paradigm shift. It's a product of the Internet.

Asking about open source billionaires in 2008 is a bit like asking about manufacturing billionaires in, say, 1760. There's Matt Boulton (above) and Josiah Wedgewood. No this mass production thing isn't what it's cracked up to be.

And, yes, the paradigm shift made possible by the Internet is that important. It has, in fact, just begun to take hold.

Topic: Open Source

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  • The comparison is not vaild

    Mass production is a concept. Software is a work product. Those who mass produced still had to buy the work product of others to implement the concept (assembly line components are not free of cost). The people that provided those parts for the assembly line earned their living by producing those products. Software, while having a low marginal cost, represents the parts that make a business run, not the concepts of how the business is organized. Additionally, as long as technology represents a competitive advantage, businesses are not going to give it away.
    • Dana, I'm disappointed in you.

      I'll re-read the post. But I have a question to ask you, ahead of the knowledge economy entering full swing :

      Where is the wealth in money?
      • You mean right now?

        Right now it's in Euros. All the dollars went into the Big Shitpile.
        • LOL, it got sucked back up by the "few"

          But we should see it feeding through again by the end of this year, that's assuming Penelope and Rupert don't elope.
  • I wouldn't count Google people as Open Source billionaires

    They are billionaires because of the service they provide - and the way they monetize it. That service could as well have been done with closed source software. Also, I don't see them open sourcing their "secret sauce" for giving search results.
    Roque Mocan
    • "service could as well have been done with closed source software"

  • RE: Where's the money in open source?

    The money in open source is not in the software it's in what the software allow you do.

    For example:

    Say I need a accounting system. Now I could buy a one size fit all solution getting a ton of stuff I don't need for really high price. Alternatively I could write my own solution in house and that would cost a lot of money as well a probably take little longer but I get the exact fit. Now I look at some open source solutions out there. None really fit at all but the ground works is already there. I just need to build on it and pefect it for my business. Now that in house job is suddenly a lot less time consuming and more cost effective. I get system I support and control and that's cost saving to my business. I add to it when I want and need it. No upgrade cycle hoping the functionality that I'd like will show up. That's where the money is in open source. Now I have system in place that allows my business to be more productive and there for more competitive meaning more profits.
    • you must be growing your own veggies ...

      stich you own clothes. By that standard you should be driving a kit assembled car.

      If you depend on others with better expertise to do things, well, thats what proprietary software companies offer. Their expertise in software.
      You dont have to spend your money and time, tinkering with software to customize it to make it. Things work right out of the box, enabling you to focus on your core competency.
      • lol...

        It's a good thing for my career that what you're saying just isn't true for a majority of American companies. Software written for the enterprise is by its nature very generic. From there companies start to customize their applications to fit the way they do business, they start getting different applications talking to one another and finally they start adding additional functionality into their applications to take advantage of new technologies or new business processes. I don't see that kind of demand ever going down. In fact, it keeps going up to the point where the perception is that there aren't enough qualified programmers out there to come close to meeting the need.

        I run about a 180 day backlog, only because I won't schedule myself out further than that. Most of the projects I work on are anywhere from 1-14 days. Occasionally I'll have a large scale project that pushes the limits at around 90 days. I'm regularly turning customers away and they are regularly coming back with more requests.

        Anyway, the point of all that is that corporate America realized a long time ago that there is no "one size fits all" paradigm to enterprise software. The Windows/Office duo is the only exception to that rule. And even Office gets highly customized in many companies.
      • If that's a value you want to pay for go for it

        For large enterprises there is no such thing as "just works out of the box" -- not when it comes to systems. That's one reason why open source is so strong in the enterprise space.

        On the desktop, Ubuntu continues to improve, but the real value is in the applications, where Microsoft has a 30 year head start.
        • "a 30 year head start" but with yesterday's way

          ie fat desktops.
  • RE: Where's the money in open source?

    Two words: Penquin T-shirts.
    • I take it you grow your own veggies, cut your own hair

      stich you own clothes. By that standard you should be driving a kit assembled car.

      If you depend on others with better expertise to do things, well, thats what proprietary software companies offer. Their expertise in software.
      You dont have to spend your money and time, tinkering with it to customize it to make it work. Things work right out of the box, enabling you to focus on your core competency.
      • Rent a sense of humor.

        It was a joke!
        • accidently replied to the wrong post

          replied to the wrong post :-(
    • I've made a nice living with FOSS for 10 years + ..

      Sticking with Windows is like skiving off school and refusing to learn another language.
  • The applications?

    The OS is open source... can't the apps be closed source, if desired?

    Please forgive me, my ignorance...
  • Not money - in - open source but ...

    ... money - from - open source. For example, IBM uses open source to reduce costs and so obtain contracts for items which are paid. Red Hat sells the product of open source at the price of proprietary.

    But even more important is the savings in expenses for staffing. If open source did nothing more than permit or force the layoff of those working on general purpose software, it would meet both the philosophical expectations of Mr. Stedman and the hopes of companies whose greed is mandated by the requirement for profit.

    The innovation in open source is not in the internet as a facilitator, but in the discovery of a justification for people doing damage to others much like themselves. Though similar situations have been created by ideologies, this is the first I have encountered in which the inherent nature of a commercial product is said to make necessary harming others in the name of virtue.
    Anton Philidor
    • Correction

      Mr. Stallman, of course. First draft.
      Anton Philidor
  • Macintosh computers are FreeBSD powered...

    Grab a couple cheap and chintzy graphics designers and put out your own version of the common desktop environment and use X-windows to dress it up and voila, you get rich.

    Apple was stuck in the 32 bit world until they dumped their very flawed 32 bit OS and moved to FreeBSD. FreeBSD is a 32/64 bit OS that is, well, free, to use any way you want to use it. Apple shows how open source can be used to make a fortune. Their cost to move into the Intel world was borne by the FreeBSD software open source people but it saved Apple billions of development dollars.

    They could not use Linux, though, because that would have forced them to open source their OS, which would be a huge improvement over the crappy coding their own developers, do though. Linux is better than FreeBSD which is old school Unix. Modern Linux is pretty much 96% hardware agnostic if you don't mind using ndis wrappers for Windows hardware to fool hardware into thinking it is running on Windows.

    Sun has a classic Unix as well and Linux, except for very special cases, is better than Sun OS. They have open sourced Sun OS in the hopes that the open source world can fix the flaws in it. Sun is a proprietary vendor that used to be the all time champ at vendor lock down but that title goes to Apple, now, which uses open source to generate revenues off the work of others and has a total lock down on hardware so they make about ten times the profits that commodity hardware vendors make off their hardware.

    Windows moved their entire world to the NT core back around 2000 there to create a server class desktop OS that could do both tasks, work as a server and do desktop stuff. The advantages of a server OS on the desktop are legion. Apple could not compete because in order to pull together their own server OS it would have cost about two billion dollars. That is a low, low estimate. But Apple chose to remain relevant in the modern computing world and grabbed the only open source software that had a license that allowed them to use it for their own purposes without opening up the architecture or open sourcing their core software.

    FreeBSD is an excellent OS but it is not made by Apple and is free to use at will but Linux is both technically superior to FreeBSD and much, much more modern on all technical fronts. But Apple uses hardware lock down, just like Sun does, and that hardware lock down does make their life much easier but the instant you take a look at the more modern stuff out there in the Linux world you wonder why Mac users pay so much for so little. User tastes are a total waste of time when deciding which OS to use. Vista is a much better OS on the technical side but Microsoft has a millstone around its neck and that millstone is its software vendors and its need to run old software alongside new stuff. Vista has multiple servers that take the place of the old school software API that is in XP and in all older Windows software so it is, at first glance, rather complicated but take it from a 20 year Windows software programmer veteran, the newer dot.net based software and inner servers is a much, much better way to go and can easily create secure software and the Vista software practices make Vista very tough to crack unless you take advantage of the flaws in Java or other third party software that is still programmed down to the metal and still filled with exploits. The bigger the application the more flaws in it.

    But as long as there are people who don't understand modern computers and computing there will be new Mac users...