Open source and the box era

(These boxes live at Cornell. From Blenderartists.org.)

Netbooks like the ASUS EeePC are the harbingers. They are self-contained. There are no moving parts, no floppy or hard drives, no CD-ROM or DVD. For the most part you use what is there.

Now Cisco is showing its hand through the acquisition of Jabber, an open source IM project.

We have been seeing this coming for years, in cable set-top boxes and digital cameras. But now, with open source, your computing environment can become a box.

Dave Rosenberg talks about Cisco being an "open source consolidator" but I think the game is simpler. Add value to mass market hardware by using open source software, raising the price without really raising the cost.

A program like Untangle could easily re-define the home router space. Add its security and censorware to a standard home router and a $40 box magically becomes a $100 box.

By using open source, you can add a service which updates the box automatically, just as your current anti-virals are updated, with corresponding revenue streams. Now you have margins to slowly let that $100 box go to $40 again, at a profit.

The danger for open source is that, by placing it inside a box like this, you monetize and, in effect, make the resulting product proprietary. A fine how-do-you-do for the people who gave their time freely to make a project work.

This sort of move is becoming essential for companies like Cisco, because their hardware margins are being squeezed out, in part, by open source competitors like Vyatta.

With open source pressing on both the hardware and software sides, a box that defines both in terms of service, with an open source base, is the obvious next step.

But with software locked in a box or sold as SaaS, where does that leave the value open source represents?