Recently, John Jackson wrote:
“After reading your posts for the last ~1 year, I am wondering why you are on an open source forum. It seems to me that you don’t understand the point that comparing the newer model of open source software (technical and business models) to the models of the proprietary companies is not the be-all-end-all of the comparisons. Specifically the revenues and profit margins of the two models. They are different, and will be different.”
John, I completely agree with you that OSS is different. But one of two things happen to a successful OSS vendor. They get purchased or IPO. For simplicity sake, let’s assume that the acquiring vendor is a public company. Once we begin to add public investors into the fold, I believe that focusing on “OSS is different” is a losing business strategy. Investors don’t really care about different. They care about revenue, profit, share growth and dividends. OSS proponents can ignore investors and Wall St. if they wish, but I’d suggest against it. Individual investors and Wall St. make it possible for public OSS vendors to access capital that may be necessary to fund the vendor’s growth. (Cheap) Capital allows (OSS) vendors to make acquisitions, build out a larger WW sales force, develop new products, etc. [Heresy_On] The value of development effort received by an OSS vendor, around a single-vendor-controlled OSS project, is much lower than you’ve been led to believe. Building (OSS) products is expensive [Heresy_Off]. I think we can agree that most leading OSS vendor would be much better off if they had more capital at their disposal.
If we put aside the dogma of “OSS is different, so don’t compare it” and realize that at some point, it WILL be compared, could we as a community make it easier for OSS vendors to succeed in the market? Recognizing that OSS vendors will be compared to commercial vendors might lead some of us to get past the OSS purity debate (as I did with whether JBoss was open enough – see my next post). It may lead some of us to accept a leading OSS vendor giving away 90% of its products and offering gated access to 10% of its products. But you can’t get to this conclusion if you always end the discussion at “OSS is different, duh”.
I would rather see an OSS vendor valued at $20B with 90% OSS products and 10% gated access products vs. that same vendor valued at $250M with 100% OSS products. I am pragmatic. Not everyone will share these views about OSS being used to generate revenue from products that may not be completely open. I’m not suggesting that others have to change their views on OSS purity. I am putting forward a view that says, mostly open and big (i.e. Google) does more good for the largest set of users, than fully open and small.
PS: I have been a little tardy on replying to comments here at InfoWorld. I apologize. I am in the middle of an executive mba while working full-time….which may explain my capitalist views here ;-) I do appreciate your comments and read them all. Please keep telling me when you think I’m off base! I will try harder to reply.