Evan Summers's Blog

Opensource Business

Ben Galbraith made the following great point in his recent blog entry in praise of intelligent tools such as IDEA.

Maybe it's because I hope to sell software someday, maybe because I know how hard it is to write good software, but for whatever reason, I actually like supporting great ISVs by buying their product. I spend thousands of dollars on ISV products each year because I feel its the right thing to do.

IDEA vs competition from opensource options, is an interesting case study of the software market in general. One wants to support vendors producing great stuff, like JetBrains, Atlassian, and the like. But one also wants to support opensource/community projects, which likely present an important part of the future.

Even bastions like Microsoft and Oracle are at a loss, and what does that bode for our industry? Interestingly, Apple seems to have surpassed Microsoft in the OS game by coopting a solid opensource platform, and focussing their efforts on the GUI layer. IBM embraces opensource projects to provide products and services around those. Sun has opensourced its assets to drive hardware sales and professional support services. Well, it was either that or let Red Hat help themselves to their OS and middleware markets.

If it wasn't for Eclipse and Netbeans, maybe Sun or IBM would have bought JetBrains and opensourced IDEA? Maybe in future JetBrains will opensource IDEA themselves, to drive volume for more niche products?

This prospect of a world where all prominent software is free and opensource, is disconcerting because traditionally a small startup business developed some software in order to sell it. But these days the trend is to build free-use websites and opensource software to drive other revenues eg. professional services.

So maybe the future is that most startups will build on opensource software to add particular value eg. MyEclipse, or create opensource software to drive volume eg. Terracotta, and generally provide complementary products and services around opensource software.

But hopefully there'll always be opportunity for small businesses to create great new software from scratch, and sell it, pure and simple? Later, you might find opensource equivalents snapping at your heels. But if you're competing against "free" then at least your product really has to be good, and you gotta keep making it even better, or die trying.

Comments

• the world is BIG :) There is no "one reality" to evaluate.. Open Source in Europe is different from american OSS and totally different from third world OSS. Despite the simple fact that every one wants a free stuff, the amount of money available, the local requirements and the way to do business still very different depending on the country, region or city you are talking about :).
  

  Posted by: felipegaucho on January 22, 2007 at 07:11 AM

• the business perspective is epistemic :)

  Posted by: felipegaucho on January 22, 2007 at 07:12 AM

• 
  that's a good point. An individual user in the developing world may balk at 500 dollars or whatever converted to their local currency, and prefer to spend that on hardware like an xbox before anything else ;) and embrace opensource, which feels good, cos it's an inclusive community and universally and equally accessible

  On the other side of the coin, a global investment bank with more money than they know what to do with, may prefer opensource for reasons unrelated to cost eg. having the source code as a safety precaution against the future.

  Posted by: evanx on January 22, 2007 at 08:24 AM

• Vertical software niches are also important. I've heard of open source dental practice management software, but I doubt this kind of stuff is prevalent across all industries.

  Posted by: tompalmer on January 22, 2007 at 08:54 AM

• The most bizarre to understand (for me anyway) is the commercial package that builds on open source without contributing anything back.

  There's nothing "wrong" about doing this, but it certainly seems parasitic rather than symbiotic.

  -JohnR

  Posted by: johnreynolds on January 22, 2007 at 03:23 PM

• that's by now all commercial software written in Java by companies who aren't paying JCP members John.Is everyone writing software in Java now suddenly a parasite on the open source world?
  In contrast is the attitude of open source communities that I've experienced where requests for help are ignored (or even blatantly denied) until you've made a "generous" donation to the maintainers. They're on the face of it doing it for no commercial gain, but unless and until you fork over the dough you're not getting any help (not even a bugfix for a bug you yourself reported, the bugreport is simply not entered into the system until enough paying "members" have indicated they want it fixed.
  Or another situation I've encountered where the maintainers of an OS project suddenly disappear with the codebase as soon as it's stable and marketable, only to pop up elsewhere with the product now locked down behind license keys and no longer free, with maybe a "generous" offer being made to the contributors that they will get a 5% discount on the several thousand dollar purchase price if they want to continue developing the thing.
  If you create something and release it as open source, it's now officially a hobby project. If you want to cash in on that hobby by selling it, say so openly and don't accuse people who don't pay for your generosity of being parasites.

  Posted by: jwenting on January 22, 2007 at 11:40 PM

• 
  John, it's probably better for a project for a company to build on it even if not giving anything back (at first), rather than not using it at all, because there is always a chance of them giving something back in future? The FreeBSD guys just wanna know that people are using their work, and that is reward enough, which i reckon is noble, and good for our industry.

  jwenting, wouldn't the opensource license mean that the software can be forked so as to always be free? hopefully that would keep the project originators relatively honest.

  Posted by: evanx on January 23, 2007 at 12:40 AM

• > wouldn't the opensource license mean that the software can be forked so as to always be free
  Not with BSD license, for example.

  Posted by: kirillcool on January 23, 2007 at 02:34 PM

• 
  kirill, as i understood, with BSD/ASL licenses, you can enhance opensource into a proprietary product, ie. where you do not have to distribute any source code changes and additions with the binaries you distribute to clients at a charge. But one of the "definitions" of opensource licenses, is that forking is and must always be possible? This protects the opensource community by guaranteeing that they are always empowered to continue to develop the product as a fork eg. if the originators start taking a proprietary stance.

  incidently, the other classes of licenses are MPL/CDDL where you have to redistribute changes to files, but not new files you add; and finally GPL, where you have to release both changes and new additions, ie. everything

  i blogged on these classes of licenses as "CDDL'ing up with Sun" last year - actually i should review that for fun and reference. Personally i like the the middleground of the CDDL.

  Posted by: evanx on January 24, 2007 at 01:36 AM

• i'm assuming that nowayjose is an (unnamed) friend of mine having a laugh so i'm deleting his comments ;)

  Posted by: evanx on January 31, 2007 at 10:15 AM

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