On Open Source’s business models and broken toys

December 11th, 2008 by Eric Barroca Leave a reply »

IStock_000007143459XSmall For several months now, the new hype for some “Open Source VIPs” (usually people having been involved in some form of “Open Source activities”) is to tell how much Open Source is not pure anymore (now that it is generating business and is widely spread and done by successful companies). How badly the Open Source model is hurt. And to what extent the model is broken, dead, not working. The last example is this article from Stuart Cohen in Business Week gives me a nice opportunity to express my views on the topic.

So for those who think the model is broken, please read on! For others, please read on too. And for both, comment if you like, I value you opinion. :-)

Alive and kickin’, Open Source’s stronger than ever

Time to go back to fundamentals. Hence, here we go… Let’s imagine Open Source software were not working, here is how you would notice:

  1. You wouldn’t get much email delivered into your inbox

  2. You wouldn’t be able to surf the web, and would sadly abandon facebook and 95% of your web apps (the one you now can’t live without)

  3. You wouldn’t be able to use the Internet at all (since your computer wouldn’t be able to even find servers’ addresses)

  4. Most of your enterprise network would just be broken (remember the tiny box with Linux inside…)

  5. Most of your enterprise apps would be down too, anyway (Yes, Java and PHP are OSS)

…funny day at the office, right? Kind of a remake of “The Day After”… ;-)

You’re using open source code everywhere, for most of your daily tasks involving computers (or mobile phones, game console, etc.), without noticing it (see, it works… ;-) . It’s become the blood of the software industry. From tiny, yet critical, bits like network protocol stacks, compilers, print servers, http servers, mobile phone firmware or OS kernels (Linux, anyone?) to large enterprise software like Eclipse IDE, MySQL, Java, OpenOffice.org, Firefox, and a dozen more (including Nuxeo, of course!).

OSS being there, live and kicking, someone has to produce it. A model must exist: Open Source code does not magically appear from nothing. People are producing it, and the vast majority of them get paid for their work.

Proprietary software’s dead: there is no pure proprietary software anymore

Most proprietary software rely on, embed or leverage OSS bits. Same for software available as SaaS. Even Gartner states that by 2012 more than 80% of the code released by software vendors will include open source bits. Still, from my experience, it’s way bellow the truth…

Given this, there isn’t a big step to state: As there are more “pure open source” than “pure proprietary software”, the Proprietary Software model is broken.

Is it? No.

And, by the way, there isn’t one proprietary model. There are many. Same, there isn’t one open source model. There are many! The world is diverse, business models too. And that’s good.

Proprietary software models delivers value. As do the Open Source models. Actually, this is the key point: the value delivered to customers. And it’s not enough highlighted in those endless “proprietary vs. open source” trolls.

It just seems that OSS models are delivering more value for less money than their proprietary equivalent. But that’s another argument. ;-)

Not pure enough…

One thing I can’t stand to hear is “this open source software is not pure enough”. Pure enough. Period. Or “this open source software is not real open source”. Real. Period. “Real”, “Pure”. Hey, It’s not weed, man. It’s software! And business.

You know what? The exact same code can be proprietary or open source. Its licence defines it. There is no notion of a “purity-level”. There is an OSI-approved open source licence or not. End of the story. All other considerations are business-related considerations. And it is really important, but does not impact the “open source”-ness of the software.

What matters then is the behavior of the company, the price of a deployment, the level of support offered, the list of features available, etc. As for proprietary software I would say. And it’s normal, those aspects are the ones defining value the software will bring to customers.

And at the end, the choice is made based on the good old value/price ratio. Because this is what matters. If Open Source Software delivers it, it’s great. No matter if it has been created by a pure service company, a big software vendor (like Sun or IBM), a company using an hybrid model, a company delivering proprietarized open source (like RedHat), a non-profit Foundation (usually gathering and mutualizing work force from software companies, like Eclipse or Mozilla) or a pure informal open source group (like for the Linux kernel).

Purity matters for crystal, gold, diamonds or oil. Not for business models in the software industry. Value does. And it would be great if we all could not forget this. Because this is what customers are expecting. Value matters. And as long as value is created, the model is valid. Customers are the judges, and they like it.

Of course, maybe Stuart just want to attract some attention for his new startup trying to sell people the development model that has freely emerged with open source. Business’s good, for sure. But… don’t bite the hand, Stuart, don’t bite the hand…

Keep the faith! ;-)

EB.