As Kevin McEntee, Netflix's VP of Systems & ECommerce Engineering explained on a recent blog posting, Why we use and contribute to open source software, "Our budget, measured in dollars, time, people, and energy, is limited and we must therefore focus our technology development efforts on that streaming video software that clearly differentiates Netflix and creates delight for our customers. These limits require that we stand on the shoulders of giants who have solved technology challenges shared in common by all companies that operate at Internet scale. I'm really just articulating the classical build vs. buy trade off that everyone deals with when developing software.
McEntree continued, "We do utilize some commercial software but there is often the alternative choice of utilizing open source software, preferably open source software that implements an open standard. Open source software projects often originate as a labor of love by software developers who are tired of seeing a shared problem solved over and over again in one off solutions, or perhaps they realize that they can offer a more simple and elegant alternative to a commercial product. The great thing about a good open source project that solves a shared challenge is that it develops its own momentum and it is sustained for a long time by a virtuous cycle of continuous improvement. At Netflix we jumped on for the ride a long time ago and we have benefited enormously from the virtuous cycles of actively evolving open source projects. We benefit from the continuous improvements provided by the community of contributors outside of Netflix. We also benefit by contributing back the changes we make to the projects. By sharing our bug fixes and new features back out into the community, the community then in turn continues to improve upon bug fixes and new features that originated at Netflix and then we complete the cycle by bring those improvements back into Netflix."
That's about a good summing up as I've ever read about why open-source software and development is good for business.
Netflix is far from the only business that benefits from open source though. People tend to think of Linux and open-source software as benefiting only technology businesses such as IBM, Oracle, and Red Hat. That's not at all the case.
Google, Facebook, and Twitter, all best known as Web companies, depend on Linux and open-source software to handle their hundreds of millions to billions of daily users. Indeed, without open-source software I doubt very much that any of that trio would be as big as they are today.
It's not just businesses that center on technology that have found Linux and open source help their bottom line. The London Stock Exchange, for example, just switched to Millennium Exchange, which is based around Linux. Other stock exchanges such as Chicago Mercantile Exchange (CME) the New York Stock Exchange (NYSE), the Tokyo Stock Exchange. etc., etc.
Why have all these businesses done this? It's not because any of these businesses love Linux or open-source for their own sake or to stick it to Microsoft or other proprietary software companies. They do it because Linux and open-source software tends to be cheaper, faster, more stable, and gives them more control over the software. In short, open-source and Linux works well for business.