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Why No Billion-Dollar Open Source Companies? 487

Posted by Soulskill
from the free-as-in-give-us-money dept.
Glyn Moody writes "If open source is such a success, why aren't there any billion-dollar turnover open source companies? A recent briefing by Red Hat's CEO, Jim Whitehurst, to a group of journalists may provide an answer. Asked why Red Hat wasn't yet a $5 billion company, as he suggested it would be one day, he said getting Red Hat to $5 billion meant 'replacing $50 billion of revenue' currently enjoyed by traditional computer companies. If, as is likely, that's generally true for open source companies, it means they will need to displace around $10 billion of proprietary business in order to achieve a billion-dollar turnover. Few are likely to do that. Perhaps it's time for managers of open source startups to stop chasing the billion-dollar dream. If they don't, they will set unrealistic ambitions for themselves, disappoint their investors, and allow opponents of free software to paint one of its defining successes — saving money — as a failure."
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Why No Billion-Dollar Open Source Companies?

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  • Pftt (Score:5, Insightful)

    by somersault (912633) on Friday June 11, 2010 @09:32AM (#32534444) Homepage Journal

    they will [..] paint one of its defining successes — saving money — as a failure.

    Hmm.. so they're bringing in 10% of the revenue of non open source equivalents - basically meaning that their clients need to spend 90% less.. how is that not saving money?

  • by genrader (563784) <genrader@NOsPam.gmail.com> on Friday June 11, 2010 @09:34AM (#32534490) Homepage Journal
    Many businesses that reach billions of dollars in revenue often rely on government contracts and monopoly protection--patent law being the biggest of these. Without government interference in the economy businesses would probably be less likely to hit "billionaire" status. I don't doubt that there would still be some, just not as many. In the open source world this is (to some extent) playing out.
  • by linzeal (197905) on Friday June 11, 2010 @09:35AM (#32534498) Homepage Journal
    There are almost too many to count when it comes to billion dollar companies involved in open source. They are the main motivator in new Linux kernel development and amongst 100's of other projects including Apache, Perl, MySQL etc you will find @email's from dozens of billion dollar companies in the dev-lists. O'Reilly himself squashed some of these rumors about open source [oreillynet.com] himself over 11 years ago now, so why discuss this? It is just going to turn into a flame war about licenses and corporate responsibility.
  • by Lunix Nutcase (1092239) on Friday June 11, 2010 @09:36AM (#32534514)

    You mean the same multiple open-source side projects that add little to nothing to their bottom line? Google gets it's money from it's proprietary search engine and ad platform.

  • by JamesP (688957) on Friday June 11, 2010 @09:36AM (#32534516)

    - Open Source is (relatively) new
    - Open Source is not tame. It's not easy to use (as even Windows tried to be - and sucked - at the beginning) Remember Windows NT?!

    - Open Source shines when it's hidden. Infrastructure, mainly. Even though Oracle had lots of success (and money) there

    Now for the business side

    - It's hard to sell OSS. IMHO Red Hat did it the best, but see other companies. Novell got mixed results, the others, well...

    Now for the OSS crowd

    OSS people get a lot of things in sw, but what they don't get: usabiliy, focus on customer, what it means to be 'shippable'.

    How many times you try to argue with an OSS developer that a bug is a bug, not a feature?!? Or that things must work and something is preventing it to work and the developer refuses to fix it?!

    I'm not saying that Apache should get a next,next,next interface, but some things are ridiculous.

    And guess what, MS does not know that either, that's why WinCE sux

  • Huh? (Score:5, Insightful)

    by PopeRatzo (965947) * on Friday June 11, 2010 @09:36AM (#32534518) Homepage Journal

    Why no building dollar bicycle-pump manufacturers? Why no billion-dollar indie record labels? Why no billion-dollar oil companies that have not polluted? Why are there no billion-dollar hockey franchises?

    Asking why there are no "billion-dollar" open source companies is kind of stupid. Considering how much of the very fabric of the Internet and the web are open source, I'd suggest that if "open source" disappeared tomorrow, a lot of "billion-dollar" companies wouldn't be worth anywhere near a billion dollars.

    This story is the Slashdot equivalent of "If you're so smart, why ain't you rich?"

  • Copyright laws and software patents make traditional closed source business models too lucrative. And while copyright and patent infringement may still occur, it is a better model to chase in the eyes of investors because a company like Microsoft will offer them reports on how much money is lost to such things and claim that as potential profit or unrealized profit or put it on the balance sheet to make investor's eyes light up. How much "theft" (don't jump on me for using it, that's what Microsoft calls it) do you think Red Hat suffers from? Not a whole lot, I'd imagine as I believe the bulk of their profit comes from support and that support is kinda hard to steal.

    Anyway, if copyright laws didn't exist for software? Well, you'd see companies like Microsoft fall apart and companies like Red Hat thrive. Because the business model would shift from protecting your source code through litigation to making it available for free since that would be the only way to effectively combat piracy. Right now, the system is so screwed up that even when the original Windows becomes public domain, no one is going to have the source code and if they do they're not going to release it. I almost wish the Library of Congress kept a proprietary source library if that didn't leave to government abuse and a multitude of problems with huge security concerns.

    As a young idealist, I once thought that open source should be welcomed by all since there's an infinite amount of code that the populations will always need written. If they don't need an operating system, they need a web server. If they don't need web server software, they'll need the specific application on a per company basis. Ad infinitum. And therefore you shouldn't fight open source when you're generating revenue from such a general purpose and widely used tool. Unfortunately I came to understand copyright, marketing and how Microsoft keeps making bank on Windows despite it being -- in my opinion -- an inferior product. And so my logic was inherently flawed--especially in the eyes of stockholders and lawmakers. Such skewing of profits between open and closed source companies reveal this.
  • by Lunix Nutcase (1092239) on Friday June 11, 2010 @09:42AM (#32534596)

    How do you become an open source billionaire? Ask Sergey Brin and Larry Page.

    You mean create a hugely successful proprietary search engine and ads platform? Sure they may have leveraged open source in creating these proprietary products but they didn't make their money through selling open source products.

  • False Premise (Score:3, Insightful)

    by yoshi_mon (172895) on Friday June 11, 2010 @09:42AM (#32534606)

    Perhaps it's time for managers of open source startups to stop chasing the billion-dollar dream.

    I love it when authors use a false premise to setup their stories. Of course every one wants to make it big but the idea that there is some mythical number that every open source CFO is reaching for is just stupid.

    Further if they want to look for a company that uses the FOSS model and has billions: http://www.google.com/finance?q=NYSE%3AIBM [google.com]

  • Margins... (Score:4, Insightful)

    by Bert64 (520050) <bert&slashdot,firenzee,com> on Friday June 11, 2010 @09:43AM (#32534608) Homepage

    The issue is that proprietary software allows ridiculous profit margins (close to 100% since the software costs nothing to distribute and economies of scale are pretty much linear since the upfront costs remain the same regardless of volume)... Now no industry could possibly achieve such margins if there is any competition, so proprietary vendors stifle competition through lock-in..

    Open source vendors are unable to rip their customers off by selling zero cost goods at ridiculous markups because if they did someone else could come along and offer the same code for a cheaper price, instead they must make their money selling services... Services have a constant ongoing cost to actually provide the service, and these costs increase as you provide service to more customers.

    The proprietary software market is effectively a scam, which sooner or later will come to an end... Customers will wake up and realise just how badly they're being ripped off, but until then the fraudsters will make as much as they can out of it.

    The services market on the other hand is far more reasonable and although competition may eventually result in consolidation and razor thin margins, there is a lower limit.

  • by NervousWreck (1399445) on Friday June 11, 2010 @09:44AM (#32534620)
    Agreed. People assume open-source means twelve-year-olds in basements and "commies." Very few think about the fact that multi-billion dollar companies are involved.
  • Re:Pftt (Score:5, Insightful)

    by PatHMV (701344) <post@patrickmartin.com> on Friday June 11, 2010 @09:45AM (#32534632) Homepage
    Well, the idea behind open source companies is that the software is free, and the company pays for support. Thus, no licensing fees for the development, and ONLY the support costs associated with being able to call and talk to a support personnel. That's where the savings comes in to the end-user client.
  • Re:Pftt (Score:4, Insightful)

    by Anonymous Coward on Friday June 11, 2010 @09:47AM (#32534656)

    because we all know that closed source programs require zero administration time.

  • by Anonymous Coward on Friday June 11, 2010 @09:50AM (#32534690)

    So? That's just showing how they are using the Open Source Software to help their main source of income. The point is to give away the abundant and infinite goods (How many copies of Google Chrome can you give away? About as many computers are there are in the world).

    But how many ad spots can you sell to the specific people that want to sell to the specific people that want to buy? That is VERY SCARCE. Google has found a very valuable yet scarce resource, and uses the very valuable but abundant software to promote it and make it easier for people to access the scarce ones.

    Open Source is a means to an end. You'll starve to death if the only thing you do is create things to go away. You have to make it work for you, while keeping it open source.

  • by SpazmodeusG (1334705) on Friday June 11, 2010 @09:50AM (#32534694)

    Try asking why are there no billion-dollar companies using 100% CLOSED source software?

    The answer is simply because billion dollar companies dabble in a bit of everything. Oracle has a lot of open source products. It also has a lot of closed source products. Same with IBM, Microsoft, Google, Apple, etc etc. If you don't consider these billion dollar companies to be open source companies then you can't consider them to be a closed source companies either. They all dabble in a bit of both because they are all really big.

  • Re:Pftt (Score:5, Insightful)

    by mcvos (645701) on Friday June 11, 2010 @09:51AM (#32534704)

    And the advantage of this is that customers who call with a problem actually get a useful answer. They're paying for that support, rather than for the license.

  • by Lunix Nutcase (1092239) on Friday June 11, 2010 @09:53AM (#32534736)

    You mean all running on an internal, proprietary fork of GNU/Linux, right?

  • by Lunix Nutcase (1092239) on Friday June 11, 2010 @09:54AM (#32534750)

    So what? This article wasn't about multi-billion dollar companies leveraging open source for their bottom line. It was about companies selling and supporting open source products that they create.

  • by wealthychef (584778) on Friday June 11, 2010 @09:56AM (#32534772)
    A relentless focus on profit over all else is the scourge of capitalism in our nation. We have forgotten that business exists to serve people, people do not exist for the sake of money. There are other business models other than focusing purely on profit. For example, ask Muhammad Yunus: 2006 Nobel Peace Prize Winner; Founder, Grameen Bank [youtube.com].
  • Re:Pftt (Score:5, Insightful)

    by Culture20 (968837) on Friday June 11, 2010 @09:58AM (#32534806)

    Open Source is only 90% cheaper if your time is worth 10%.

    Best joke ever.
    If I had to rate difficulty of OS maintenance and setup, it would be:
    Microsoft (Any), Most difficult
    Solaris
    Mac OS X
    Linux (Any except gentoo), easiest

  • Re:Pftt (Score:5, Insightful)

    by commodore64_love (1445365) on Friday June 11, 2010 @09:58AM (#32534814) Journal

    >>>the software is free, and the company pays for support.

    What if I don't need support? That's why Red Hat and other liberated software companies will probably never see 1 billion. Bottom Line: A lot of us are cheapasses. ;-)

  • Re:Huh? (Score:4, Insightful)

    by kent_eh (543303) on Friday June 11, 2010 @09:59AM (#32534824)

    Asking why there are no "billion-dollar" open source companies is kind of stupid.

    That's kinda my reaction too.
    Why does success need to only be defined as "more profitier every quarter... to infinity".
    Small and medium sized businesses are, and always have been, the core of every economy. They are where the creativity is. That's where most jobs are. They are more agile and able to react.
    Those few billion dollar companies are almost always bureaucratic, bloated, predatory bullies, who ultimately cause more damage to the economic environment then any good they ever did. (see "big energy", "big pharma", "too big to fail", etc)

  • Re:Pftt (Score:4, Insightful)

    by quantumplacet (1195335) on Friday June 11, 2010 @09:59AM (#32534830)

    you're right, that's not what it means. It's a completely meaningless meme that gets tossed around every time there's an article about open source.

  • by Lunix Nutcase (1092239) on Friday June 11, 2010 @10:00AM (#32534844)

    Neither. I'm merely pointing out the facts which are that the Linux kernel they use is an internal, proprietary fork, their GoogleFS is proprietary, and the version of Ubuntu they use is an internal and proprietary fork. Why would it make me a troll to make sure that the entire story is heard?

  • by wealthychef (584778) on Friday June 11, 2010 @10:11AM (#32534980)
    Perfect! You dismiss my main point and focus back on business being solely for profit. Inside of that world, yes, absolutely, Microsoft, Apple, Google, they are the heroes of the world. Have you ever noticed that under that paradigm, businesses get more and more evil? The search for power and profit as an end in itself is a short-sighted context. I'm a scientist and a darwinist and I understand the arguments for it. I'm just saying it does not work -- it causes pathologies and we need to keep our humanity even as we use money to serve our needs as human beings.
  • by morgan_greywolf (835522) on Friday June 11, 2010 @10:15AM (#32535044) Homepage Journal

    The article is talking about companies that are exclusively open source. IBM, Intel and Xerox are all involved in open source products, but all of them make three of them make their money selling proprietary, closed source hardware.

    Okay, well, in that case there aren't any companies that are exclusively open source. Even Red Hat itself sells closed-source products. Canonical has the closed-source Ubuntu single-sign on service [kabatology.com]. You can't have a billion-dollar open source-only company if there aren't any open source-only companies. QED. We can all stop posting now, right?

  • by DarrenBaker (322210) <darren@flim.HORSEnet minus herbivore> on Friday June 11, 2010 @10:15AM (#32535046) Homepage

    Competition is thriving in the open-source market, hence the lack of massive market-cap non-specialised companies. FOSS is showing capitalism how it's done.

  • by Anonymous Coward on Friday June 11, 2010 @10:21AM (#32535130)

    A few things that many geeks seem to not get:
    Salesmen make the world go 'round. They are pounding the pavement every day. They are making relationships with CIOs every day. They have convinced those CIOs that the low-risk path is to buy name brand stuff. It's proven. Plus, if there's a disaster, the CIO can tell his board he bought the best stuff. That's the old IBM line: you never get fired for buying IBM.

    CIOs and other management types like the whole sales process. They like the kind of people they have to mingle with. They like the idea of contracts, and terms and conditions, and so forth. It makes them feel like 'real' businessmen, and that they are worth something.

  • by wealthychef (584778) on Friday June 11, 2010 @10:25AM (#32535160)
    This is the excuse that people give for focusing EXCLUSIVELY on profit. I did not say "profit is evil." I said what I said. Re-read it. I understand free markets, capitalism etc. YOU sir seem to not understand what it means to be a human being. Are we supposed to be slaves to money? Is your life's purpose to maximize shareholder's value so you can buy another ski jet and park it in your garage? What is money for? These are not simply idle questions for a conversation over beer.
  • Re:Pftt (Score:5, Insightful)

    by oakgrove (845019) on Friday June 11, 2010 @10:25AM (#32535166)

    All you have to do is pop-in a CD and install. After that the system usually has everything the user needs (web browser, Microsoft Office, etc).

    I don't know where you're getting your Windows CD's but I've never seen one that came with a preinstalled copy of Office. However, practically every copy of Linux comes with OpenOffice.org.

    my Linux laptop refuses to execute flash websites (like disney.com or tv.com)

    Which Linux? Which Browser? I've never seen Ubuntu fail to install and run Flash and version 6 of the Chrome Browser comes with Flash nowadays.

    And I can't get it to talk to my Netscape ISP.

    I can't get Windows 7 to talk to my scanner. I'll talk to my scanner manufacturer and you talk to your ISP.

  • by wealthychef (584778) on Friday June 11, 2010 @10:27AM (#32535190)

    the only way you would know that your business is serving people is if it makes a profit.

    Obviously and demonstrably false. And the profits from the business goes back to the people it serves. The Grameen bank does not use its profits to enrich its owners at the expense of the poor. It does not seek to maximize shareholder value above all else. It's a matter of recognizing that a business exists for something MORE than just making a profit. Money should not be the end goal. If you don't get this, keep thinking about it. Maybe when you are over your cynicism about your life, you can start to understand that the worth of a company cannot be measured purely in dollars.

  • Re:Pftt (Score:4, Insightful)

    by shadowrat (1069614) on Friday June 11, 2010 @10:27AM (#32535194)
    That's a good point. It's hard to sell support when you are providing:
    • a good stable product
    • all the inner workings of the product
    • all the tools required to support the product

    to make matters worse, your customers are predisposed to being the kind of person who will roll up their sleeves and support the product themselves.

    to use a car analogy, it's like red hat is giving away cars hoping to make money on service, but the car comes with a shop and all the tools needed to do anything to it, and all your customers are mechanics.

    i'm surprised they can make any money at all. RedHat should

  • Hmm, I wonder (Score:2, Insightful)

    by MacGyver2210 (1053110) on Friday June 11, 2010 @10:30AM (#32535240)

    Gee, I wonder how companies who give away software for free and whose software is largely maintained by the user community could ever make less money than the companies that lock their software down and charge hundreds of dollars per copy?

    It's almost like people aren't paying for it!

    Most "duh" article I have ever seen on /.

  • by betterunixthanunix (980855) on Friday June 11, 2010 @10:31AM (#32535244)
    People need to stop saying "Linux" as if it were one operating system. A Linux distribution is an operating system; different distributions are similar, but not identical, and the problems you have with one distribution may not be reproduced with a different distribution. You say you cannot get Flash to work? Which distribution are you using? Which architecture? Adobe does not maintain a Flash plugin for every single distribution, and they only compile the plugin for x86. I know, it may seem pedantic to question whether or not you are using x86, but when dealing with operating systems other than Windows and (the current) Mac OS X, that is a relevant question -- I myself own an ARM desktop that runs Ubuntu.

    I think that you might have been joking, at least judging by what you said about Windows installation. In all seriousness though, the sooner people stop treating "Linux" as if it were a single operating system, and the sooner they stop expecting everything they want to be installed by default (which is not the case with any other operating system -- so why should a Linux distribution be any different? Yes, you need to install the Flash plugin separately after installing Windows!), the sooner we can get back to having "productive" conversations about the relative merits of different operating systems.
  • People need to stop saying "Linux" as if it were one operating system.

    Debian, Ubuntu, Fedora, Mandriva, SUSE, etc. individually will never become popular enough to attract developers of certain kinds of software for which free software has been shown not to make business sense, such as games and game-capable 3D video card drivers. The only way to make a market for non-free programs that run on Linux is to have a single ABI for user space. Linux Standards Base was supposed to ensure that.

    You say you cannot get Flash to work? Which distribution are you using?

    The fact that you feel the need to ask that question illustrates the problem. Should a program require different binaries for Windows Starter vs. Home Basic vs. Home Premium vs. Professional vs. Ultimate vs. Server?

    Which architecture?

    There are only two architectures left for consumer products: x86 and ARM. Given "laptop" as opposed to "smartbook", I'll take an educated guess of x86.

  • by Thantik (1207112) on Friday June 11, 2010 @10:50AM (#32535504)

    I thought this was the whole POINT of OSS in the first place. Not to be "for-profit" but to be *USED* to make your profit in whatever field you desire. TFA is basically one big troll, OSS' goal isn't about direct profit, it's always been about secondary profit by the money saved.

  • by dave420 (699308) on Friday June 11, 2010 @10:52AM (#32535548)
    Socialism is the realisation that a large proportion of a population are so self-centered and selfish that they simply don't realise the benefit of helping everyone in their society. "Without giving me nothing in return" - what are you smoking? If I have to give you examples, then you clearly don't have a fucking clue about what you're talking about. Your logic is a fucking joke.
  • by Jodka (520060) on Friday June 11, 2010 @10:53AM (#32535566)

    There are a few distinct concepts which have been conflated:
    - The size of the Open Source software market as measure in dollar revenues.
    - The total number of Open Source software deployments.
    - The value of Open Source software to its users, as measure in revenues of its users (e.g. Google)
    - The size of the largest corporation operating in the Open Source software market.

    The assumption that with Open Source software those measures would be in the same relation as with closed-source software markets is probably incorrect. In particular, using the sizes of the largest corporations as a proxy for the "success" of Open Source software is bogus. The Open Source Software business might tend to fragment into multiple vendors because the license permits that, whereas in the closed source market services cohere around large corporations, the software copyright holders.

    The failure of predication here was not to overestimate the success of Open Source software. It has been a wild success. Rather, the failure was to to predict the specific forms which that success would take, which Open Source business models would succeed and particularly which corporations would be winners and which losers. Some predicted that companies which rigidly devoted themselves to vending purely Open Source solutions would prosper the most. That prediction has proven incorrect. The actual outcome seems to be the Open Source adoption is broad but the biggest winners are not strict adherents to the ideology. Significantly, Google, current market cap. 154.65B, runs on Linux. Apple is thriving and its machines run the Open Source Darwin in combination with proprietary layers on top. IBM provides Linux on its servers.

    Conclusion: Open Source software is a muti-billion dollar business but the winners in that market were not the Open Source purists.

  • Uh... No (Score:4, Insightful)

    by DesScorp (410532) <DesScorp.Gmail@com> on Friday June 11, 2010 @10:57AM (#32535626) Homepage Journal

    Competition is thriving in the open-source market, hence the lack of massive market-cap non-specialised companies. FOSS is showing capitalism how it's done.

    I'm a huge supporter of both capitalism and the open source movement, but please, lets not pretend that the latter has much to do with the former. The reason why open source doesn't make much money is because it's essentially a volunteer effort. The vast majority of people that do FOSS work do it unpaid, and on their own time. I've yet to find a stockbroker that works for "the love of the game". Capitalists are in it for the money, first, last, and always. The open source movement is basically a bunch of voluntary communes. If they make some money, hey, that's nice, but the software is what's important to them, and they're willing to work for free to see it happen.

    The two ideas have little to nothing in common, save the idea of voluntary participation.

  • Re:Pftt (Score:3, Insightful)

    by betterunixthanunix (980855) on Friday June 11, 2010 @10:57AM (#32535636)
    "So there is less of an incentive to produce easy to use and bug free software?"

    Actually, there is, it is just not as clear as you might expect. If a large company has to choose between retraining costs for a system that is not easy to use but which carries a much lower up front cost, versus not retraining and sticking with their proprietary system, they are probably going to save a lot of money sticking with the proprietary system. If an open source company cannot produce software that requires minimal retraining -- basically, software that is easy to use -- then they will have a lot of trouble with their business.

    Likewise with bugs -- if the software has so many bugs that a company is spending more time calling for support than actually get work done, the company is not really saving money. Thus, an open source company is forced to produce software with a certain level of quality, or else the company is going to die.

    Finally, there is the big one: open source companies get a lot of code from "the community," who may be driven by completely different motivations than the company. Thus, even if an open source company on its own could not produce software that meets the demands of the business world, the community at large can. Red Hat actually maintains a pretty good relationship with the rest of the community, and commits bugfixes or new features upstream as a matter of policy.

    "Of course as far as Free as in Speech software goes I feel the real battle and enemy is NOT closed source software."

    What about devices like the iPad? The PS3? The Kindle? Proprietary software taken to those extremes is frightening -- imagine if PCs were like the iPad, and whatever company produced your computer had the power to decide how you used it, or perhaps if PCs were like the Kindle, and files could be removed without your consent. Software patents are a problem, yes, but they are just a fraction of the monster.
  • Re:Ali Waqas (Score:3, Insightful)

    by labradore (26729) on Friday June 11, 2010 @11:01AM (#32535692)
    It's absolutely correct that corporations are legally obligated to attempt to maximize the return for shareholders.  However, abiding by the law isn't the same as being a good citizen.  The legal obligation to maximize returns in conjunction with the demi-personhood of the corporation has led to the increasingly common comparison of corporations with sociopaths.  They exist only to satisfy their own needs and desires and are not designed or operated to benefit society.  Management can take the enlightened, modern, view that they can do well by doing good, but there's no requirement for this and competition does tend to breed ruthlessness over generosity.

    The fact that there are no enormously rich and successful open-source software companies speaks to the fact that maximizing concentration of capital is an activity that is done more efficiently by predation than by symbiosis.  Profit in itself is not an evil.  We require profit to survive because it is both the measurement of how well we use our resources and how much wealth we are creating.  Wealth is vitally important for every kind of progress.

    Perhaps it's time to think very deeply about how we want to organize our economic activity so that the rewards of our hard work are more diffused and mutually beneficial than the model that we have created which encourages vice in pursuit of profit.  The question shouldn't be, "Why are there no billion-dollar open-source companies?"  but rather, "Are business models based on generosity more or less useful for creating and distributing wealth than those which place value only on scarcity?".

    To that end, I have a proposal:  develop a set of metrics that measure the wealth generated by open-source activities.  I don't think we should be focusing on the dollar-equivalent of the developer hours.  We need to look at the contribution to the standard-of-living.  That is, after all, the real purpose of economic activity.  Once we start measuring these things in a way that is not biased toward our current system, but gives us a good idea of how useful these various activities and organization really are, we can start thinking about how we're really going to increase our wealth instead of just how we're going to make profits.
  • Re:Pftt (Score:3, Insightful)

    by somersault (912633) on Friday June 11, 2010 @11:06AM (#32535784) Homepage Journal

    People are idiots. It's not a conspiracy. I suggested moving a couple of people to Linux/OpenOffice recently and even the one other UT guy here said no, without even an explanation of why not and I couldn't be bothered to press it at that point in time. I think his main reasoning is probably because he'd be the one having to help them out if something went wrong. He's happy to use Windows 7 and iOS but when it comes to Linux, he hasn't even tried it out yet.

    I've been using it to do my work here for the last couple of years, and while I'm a fairly unique case in that I'm developing web apps, there are some people who only use email and office suites who would be perfect candidates to switch. The main problem is just that people are scared of change, and even when they are aware of alternatives, if they hear that they are free they automatically assume that they are inferior. It's a pretty natural reaction because most people learn to be wary of "free" stuff in life.

    As people become more aware of the alternatives, we will see a change. Small anecdote: my aunt bought a new computer recently and didn't realise that it didn't come with MS Office. I told her about OOo so that she could give it a test before deciding if she wanted to actually spend money on MS Office, and she thought it was great.

    In the business world I've never been able to advocate OOo before as it didn't have a replacement for Outlook (and no other email clients I've seen had working Exchange integration), but I see that Evolution has a Windows version now, so I will start advocating this setup where I feel it is relevant and not too likely to freak people out :P

    You also have to be aware that there are not decent OSS alternatives for every piece of software. If some Windows software doesn't have an OSS equivalent and won't run on WINE, then there is no way of using OSS to cut costs in that particular situation.

  • Re:Pftt (Score:3, Insightful)

    by Pharmboy (216950) on Friday June 11, 2010 @11:10AM (#32535838) Journal

    Apple is a company that USES SOME open source software, yet keeps the most important bits hidden in secrecy, and the vast majority of their products are 100% closed source. IBM would be a better analog, although most of their products are closed source as well.

  • Re:Pftt (Score:2, Insightful)

    by oakgrove (845019) on Friday June 11, 2010 @11:21AM (#32535996)

    I think you'll find the same thing is happening in the Media industry. People's ability to download movies, songs, books for free is devaluing the time and wages of the creators.

    Are you trying to say that downloading and using open source software is equivalent to mass copyright infringement of music, books, and movies? That's patently ridiculous.

    Proprietary software writers aren't "losing" money because somebody chooses a competitor. It wasn't their money in the first place and historic profits do not grant you the undying right to future profits.

    The only way closed source software writers lose money is if someone actually pirates their stuff that would have paid had the pirated copy not been available. FLOSS has absolutely nothing to do with that at all.

  • by iceaxe (18903) on Friday June 11, 2010 @11:51AM (#32536418) Journal

    So when you grow a garden, you only grow exactly how much food you need to eat an no more, because producing extra profit is evil right?

    Nobody said that.

    You seem to not understand what capitalism and free markets are.

    Too easy, I'll pass.

    You're leaving out the part that says anyone, regardless of class, race, sex, or anything can, if they choose, pursue as much profit as they wish. You don't even have to work if you don't want to. You can choose to sit on a corner and beg like a lot of people do. Capitalism and free markets are essential to freedom.

    This is where my BS meter went into the red. This would be true ONLY in a condition of true equality, which condition cannot exist in the real world. In the real world, a noticeable percentage of people lie, cheat, steal, commit violence against each other, discriminate unfairly against people who look, sound, or act different from themselves, and generally are complete bastards whenever they think they can get away with it.

    This is why idealistic ideology falls apart in the face of actual events, whether it's capitalism, communism, libertarianism, or benign authoritarianism. All of these theoretical ideals offer important insights, and should be pursued, but should be recognized as measurements, not goals. The human experiment thus far tends to suggest that a balance of competing ideals is the most workable solution. We must learn to recognize that going too far in ANY direction causes more problems than it solves.

    Luckily, most of humanity realizes this, and acts accordingly, with local variations and frequent missteps. You know this, yourself, as you proceed to demonstrate:

    When government takes my work away from me in the form of taxes and uses it for schools, police, or fire departments, I don't really mind. It beats going out and actually helping build a road myself. Instead of working on a sewer system, I can do other work that I freely choose to do and trade that work in the form of money for a sewer system. Everyone benefits, including me, and I get something in exchange for my work.

    Aha! So, what you are saying, I think, is that in some cases the collective good outweighs personal freedom and absolute capitalism. An interesting twist of phrasing, working "freely choose" in there. But an essential recognition of truth at some level.

    Under socialism, when government takes my money and gives it to another person without giving me anything in return, that is no different than forcing me to work for that person for free, getting nothing in return. That is the very definition of slavery.

    Oh dear, now you contradict yourself. If your house does not catch fire, was your tax money wasted on the fire department? Please step away from the loaded words for a moment. Notice that, sans the "S" word, you just described the same situation as your previous statement, only this time instead of "freely choose" we have "Socialism" (shudder).

    Newsflash: Collective action, in the form of taxation and government services, OF ANY KIND, is a form of "Socialism". Here's a useful set of definitions. See especially definition number one. [merriam-webster.com]

    So, your defense system, court system, fire service, police service, border guards, etc. etc. are all part of the socialist side of the balance scales, along with the usual "evil socialism" suspects of public financial assistance and health care. It's amusing, in a "makes me want to vomit" sort of way, to hear otherwise generally intelligent people decry one sort of socialism while practically worshiping another sort.

    Unfortunately, there are lots of people out there who believe slavery is superior to freedom.

    More unfortunately, there are far too many people out there who believe in a fantasy world where you get to, or

  • by npsimons (32752) * on Friday June 11, 2010 @11:58AM (#32536510) Homepage Journal

    Open source solves the broken window fallacy in the software market. Seriously. Does anyone believe that Bill Gates or Steve Jobs are ridiculously rich because their companies' software is that much better? That they really earned all the money they have? Linux and other OSS has saved the world probably on the order of trillions of USD which has been put to other uses (curing cancer, researching alternative energy, feeding the poor, etc, etc). On top of that, it has made it possible for people who could never afford the outrageous prices of Microsoft or Apple to be able to use a computer.

    Coding Horror already answered the question of this article over three years ago [codinghorror.com]:

    The lack of open source software billionaires is by design. It's part of the intent of open source software -- to balance the scales by devaluing the obscene profit margins that exist in the commercial software business. Duplicating software is about as close to legally printing money as a company can get; profit margins regularly exceed 80 percent.

    To ask where the open source billionaires are is to demonstrate a profound misunderstanding of how open source software works. If you wanted to become obscenely rich by starting an open source software company, I'm sorry, but you picked the wrong industry. You'll make a living, perhaps even a lucrative one. But you won't become Bill Gates rich, or Paul Allen rich, by siphoning away the exorbitant profit margins commercial software vendors have enjoyed for so many years.

  • Re:Pftt (Score:2, Insightful)

    by badran (973386) on Friday June 11, 2010 @12:22PM (#32536868)

    You my friend do not have any relatives that need to be connected to The Internet.

    With Ubuntu, most issues can be resolved via ssh.... And I have not had any issues at all.

    Skype, works.
    Firefox and Opera, work.
    Flash, works.

    Viruses and Malware, does not work.

  • Re:Pftt (Score:3, Insightful)

    by rawler (1005089) <`moc.liamg' `ta' `nossleakim.kirlu'> on Friday June 11, 2010 @01:00PM (#32537586)

    I have a full MSDN subscription, which would cost me piles of money but most likely costs my employer very little per head. I can download and use and develop with anything I want, for free. It only costs money because the production servers have to be fully licensed and legit.

    Very insightful.

    Just a reflection though; under Ubuntu, "I can download and use and develop with anything I want, for free.", except the CentOS production server software is also free.

    The main holdout for Microsoft I think is still market inertia. Noone got fired for buying Microsoft. (Except perhaps the guys behind London Stock Exchange).

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