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Open Source: The Model Is Broken

Posted by Scott_Ruecker on · 10 comments
Business Week; By Stuart Cohen
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For anyone who hasn't been paying attention to the software industry lately, I have some bad news. The open-source business model is broken. Companies have long hoped to make money from this freely available software by charging customers for support and add-on features. Some have succeeded. Many others have failed or will falter, and their ranks may swell as the economy worsens. This will require many to adopt a new mindset, viewing open source more as a means than an end in itself.

[Now Open Source is "broken" because it needs more value? Cohen was once the CEO of the OSDL and now he has this to say? Interesting. - Scott]

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Comments (10)

FOSS not supposed to be about making money

Scott did you read the article?

Cohen did NOT say that Open Source was broken. He said that most Open Source business models are broken.

He has a vested interest -- he is CEO of an organization promoting a different view of free software -- but I suspect he's also right.

With the Linux kernel, he nailed the paradox of free software:

If it's really good, it doesn't need a lot of support.

Though he didn't say so, the reverse is also important: If it's not really good, there ain't much to sell.



If its really good, it doesn't need a lot of support? I have yet to know of a single piece of software that is so good that no one needs help with it, ever.

Come on...

Dino, are you listening to yourself talk?

Scott -

There is a world of difference between needing no help and needing enough help to make money from.
I see, so because it doesn't make enough money for businesses that means its broken? Its the softwares fault that it is so good that most people are able to help themselves instead of paying for it? No, its not. Its because the software industry's profit is still tied to how many units you move and service contracts on those units.

Its cutting the umbilical cord to units sold that will be the most painful for the software industry. Until then, it'll be the software's fault.

Soctt -

>I see, so because it doesn't make enough money for businesses that means its broken?

That's why I asked if you read the article. The author doesn't claim that free software (or Open Source, if you prefer) is broken. He claims that most Open Source business models are broken. Very different thing.
You make a valid point, they are very different.

But..

How can a model be broken if its not even a model yet? How can there be a FOSS business 'model' if Open Source's affect on the market has not even really kicked into high gear, begun to be accurately tracked in any real manner or become an established part of the market yet?

How can there be a model if the market isn't hasn't even begun to really assimilate it yet?

Scott:

Perhaps the subtitle is better than the title in this case:

Quoting:The open-source business model that relies solely on support and service revenue streams is failing to meet the expectations of investors

This article is broken

Maybe I need more coffee, but this struck me as an odd, disjointed article. He praises the Microsoft/Novell deal:

Quoting: It lets Novell provide important software that complements the core, or kernel, of the operating system and enables interoperability between Windows and Linux.


The same people who correctly called the deal a shakedown also noted that interoperability is never a problem with FOSS code, it's Microsoft that made foiling interoperability the foundation of their business. They're still playing games with interoperability and their newfound love of the penguin, because real interoperability would not be limited to Novell, but open to all. They've simply created another kind of lock-in.

He also says weird things about the Linux kernel, like

Quoting: Red Hat...has also found ways to add value beyond supporting the Linux kernel. It adds substantial layers of software on top of the kernel...in order to provide additional value to its customers. If Red Hat relied on supporting the Linux kernel, it would go out of business simply because the code is so sound."


Um, WTF? Like duh. Nobody uses just an operating system kernel, not even the tiniest embedded developer. It's like saying "Toyota adds value by bundling several combustion units into a powerful, efficient engine and then wrapping that in a multitude of customer-friendly accessories."

And then the final kicker:

Quoting: ...it doesn't really matter if the final product is available via subscription, delivered as a service over the Web, or licensed under the General Public License that governs free software.


It does matter. Exhibit A: Google, which has built their empire on FOSS code, but is a miser when it comes to giving anything back to the community that made it possible. Which is something that those zealot fanatic idealists at the FSF predicted long ago would happen, that software as a service would provide a GPL dodge.

I guess it's good he's the ex-CEO of OSDL.
I forgot the other bit: OSS is not a business model, it's a development model. And I think he omits any mention of "Free Software" on purpose, because OSS as defined by the OSI is more tolerant of bad proprietary habits.

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