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Discussion on:
The Low Point--a view from the Valley: The innovation game

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There's plenty of savings if OSS is leveraged appropriately
cduffy 23rd Oct 2007
Besides, anyone with a good innovative idea will gladly take the millions of dollars the corporations will pay for it.

Sounds fine in theory, but doesn't happen that way in practice. Most of the time, I come up with a good idea while I'm trying to solve a problem. I'm not trying to make money off the idea itself; I'm trying to make money off my business, and solving whatever individual problem my business tends to have gets one less roadblock out of the way of being able to focus on my core competency -- and I certainly don't have time or resources to start a new business focused around trying to mine this one idea for money, or even to file for a patent and then go through the process of trying to find a buyer for it. (I'm senior development staff. I have lots of ideas; having ideas and making them happen is my job).

From that perspective, the open source model works perfectly: Non-core-competency-related improvements get contributed to the commons, in return for receiving like improvements from others (and free maintenance of my code, to the extent that it's contributed to an externally maintained project).

As for the proposition that it's cheaper to have work done externally, that's simply not always true. To give you an example, we're using the open source HylaFAX fax server in conjunction with the Asterisk telephony server to build a large-volume faxing solution which would have cost far, far more buying from a commercial vendor. We've done some integration work in-house to tightly couple this to our product, and outsourced other parts to one of the project's maintainers at an extremely reasonable price. Paying the vendor of a commercial fax server to do that same work would have been vastly more expensive -- we couldn't have done any of the work in-house, and the prices for custom work by the developer wouldn't have been constrained by competition (while an open-source project maintainer needs to keep their consulting prices reasonable because they're not the only people who can do the work). Further, to the extent that I'm an in-house expense, I do customization work an an exceedingly wide range of open source products we use in addition to work on developing in-house, proprietary software and infrastructure. It doesn't take very many cases where I can do work in-house as opposed to paying a supplier $10K+ for custom development (if they're willing to do it at all) to justify my paycheck.

Using open source in a small business doesn't make sense if you're stupid about it, sure. If you want something that your office staff can install and administer, don't run Gentoo on your workstations -- use Ubuntu instead, or buy Red Hat's RHEL or Suse's SLES with a nice support contract and a phone number you can call when a question comes up. If you're trying to do innovative things on a shoestring budget, on the other hand, having an in-house geek-of-all-trades can be essential to making it happen. If you're doing things nobody has done before, you're going to be doing development work in either case -- might as well leverage the commons for what you can and have the ability to modify the 3rd-party pieces in-house to better create components for which new development is necessary.
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