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If Open Source business is so elusive, then why do most of us have jobs?

December 2, 2009

Via Karl Horak I found a very strange article by Ashlee Vance about open source as a business model. It’s clear he doesn’t understand open source, but that’s not the strange thing, the strange thing is the obvious faults and self contradictions. Mentioning that MySQLs sales hasn’t matched the downloads is a strange claim for example. Of course it has. Since the software is open source and free to use, the sales would be only a fraction of the downloads, which is true. But they were still big enough to enable the owners to sell MySQL to Sun Microsystems for 1 billion dollars last year. Would MySQL if it was a closed database ever have reached that value? Of course not. There were already very good SQL databases covering most of the market niches when MySQL was created. If it had been a closed source company, they would never have gotten off the ground. The company only became a billion dollar company because of open source. Exactly how is that an example of open source failing as a business?

The debate over Oracle owning MySQL is also a bit strange. This is in the end a matter of a big company buying up a smaller competitor that serves a slightly different market segment. This is nothing new or strange, and is usually not stopped unless the resulting company gets a monopoly, which is not the case here. That MySQL is available in an open source license is no argument to stop such an acquisition. The open source world isn’t even affected by it, as it can simply continue to use and improve the open source version. They can’t relicense it as a commercial version, meaning that those who use the commercial version is in the hands of Oracle. Just as they were in the hands of Sun before. And before that in the hands of MySQL.

But how strong are those hands? These companies have bought a commercial license of MySQL. I don’t know what that license entails, it might be that they are not allowed to modify the code. In that case, they are in the hands of Oracle in the same way as anyone who uses Windows are in the hands of Microsoft. If they find a bug or want a feature, they have to go to the owner to make that happen. But if they are allowed to modify the code, then they can still do this under the commerical license. The commercial license means only that they are allowed to distribute MySQL as a part of a commercial system, where the open source license doesn’t allow that. That type of license does not stop anyone from innovating and improving MySQL.

The open source community is in no way in the hands of Oracle. Because the Open Source licenced version of MySQL can be modified. The license restriction there means you can’t take MySQL and sell it, and that you must also share your improvements. This allows the open source community to continue to improve MySQL forever.

Simon Crosbys claim that only Red Hat makes “real money” out of open source is also strange. It depends on what you mean with “real money”. I for example use almost exclusively open source software, and I create only open source software. The money I get from that seems real to me. But if you mean that only one company are getting stinking rich, then yes, this is true. But that statement misunderstands what open source is. It’s a statement that has a world view centered only on products. And yes, if you want to make a lot of money, you need to make a product and sell that to a lot of people. With open source, the product is free, so you can’t make a lot of money. That means the open source worlds income is based on consulting and support. But that doesn’t mean people don’t make real money, or that all open source companies are in trouble. That’s complete bullshit. Most open source companies are consulting firms who are getting along quite nicely, thank you, even if the current crisis of course affects them too. Will the owner of these companies ever become multi-billionaires? Of course not, but then that’s perfectly true for most owners of companies that make closed source softwares too. Just as plumbers rarely become millionaires, software developers rarely become millionaires. There is limited place at the top. This is hardly news to anyone, but I think it is surprising news to most company owners that unless you can make millions and retire after an IPO your income is not real.

Most interesting of all though, is Ashlee Vances comment that “Many of the top open-source developers are anything but volunteers tinkering in their spare time”. It may come as a surprise to him to hear that in fact very few open source developers at all are volunteers tinkering in their spare time. The vast majority of open source developers develop open source as a part of their job. Quite often open source software start out as a spare-time project. But if the software is useful you’ll soon have people using it on their job, and spending their payed work hours improving it, because it makes their job easier. Open source developers are generally not some sort of quasi-socialist idealists who work on open source out of the goodness of their hearts. They make their software open source because it makes their software better, and because they like to see other people use and improve their software.

It is now also more and more common that open source software is created by companies because they need it, but they decide to make it open source because it’s good for them to make it open source. Yes, the only way to make money directly from a product is to sell it. But you can make money indirectly, either by support or because you use the software in your job somehow. But to make money that way, your software must be really good, and the more people you have working on it, the better it will be. So by making it open source you ensure that everyone who wants to can help. And they will do so without monetary compensation.

So open source is a viable business model. But it’s only viable if you understand that there are other ways of running a company than to make a commodity, sell it to millions and then make an IPO.

From → plone, python

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