perspective Like me, you've probably read articles on how free software, or open source, is going to thrive in 2009, and how businesses everywhere are going to survive the recession by migrating to it.
Perhaps you agree with those views; perhaps you don't. However, what I find most interesting is what people mean by the words "open source" and, to be even more specific, what business model they have in mind.
We often assume others mean the same thing as we do in the words they use, but the truth is more nuanced than that. The real meaning behind the words is worth examining, especially when someone is trying to sell you something.
Firstly, let's take a brief look at some of the terminology used in this debate.
At open source speaking events, Microsoft representatives generally try to establish a world view sympathetic to their own by talking as if the accepted distinction in the open source arena is between commercial and non-commercial. That definition is inaccurate and its intent is to damage.
The true distinction is between proprietary and non-proprietary. The false distinction between commercial and non-commercial is designed to imply that only proprietary software is acceptable commercially--that is, companies should keep buying the proprietary stuff and leave the non-proprietary to hobbyists.
It's a clever sleight of hand but, fortunately, invalid. The true distinction is between proprietary and non-proprietary, and here non-proprietary can be just as commercial as proprietary--in fact, in classical free-market terms, even more so.
Broadly speaking, open source business models exist on a scale from software lock-in to software freedom. For a user, moving up the scale results in lower costs. For a vendor, it means a shift from a product-oriented world view to a service-oriented one.
We're going to look at five main points on this scale, starting from the bottom.
1. 'Neo-proprietarist'
Neo-proprietarists grab open source code, close it, make private changes and sell it as their own product.
In what is essentially a parasitic relationship, none of the advantages of using open source is passed on from the neo-proprietarists to the end user.
2. Mixed source
The mixed-source model is essentially similar to the first, but involves the grudging acknowledgment that some open source products are okay-ish, while, at the same time, suggesting that what you really need is the vendor's fine proprietary software to do the real work.
Unsurprisingly, this model only works when combined with legal threats and the encumbrance--real or presumed--of software patents and other barriers to entry.
Minimal benefits are passed on to the user in a "buy this and we'll throw in one of these for free" approach that also perpetuates the mixed-source vendor's propaganda that free software is not as good as proprietary.
3. Commercial open source
This business model is essentially proprietary, with a rhetorical sprinkling of open source ideology as magic pixie dust to make the sale.
It is common for vendors that adhere to this business model to use terms like "certification" and "subscription" to up-sell the enterprise variant of their product portfolio. However, whatever it's called, it's still just a license fee. While the code may be open, the terms of usage are far from free.
To function, the commercial open source model must adopt some of the negative propaganda associated with the mixed-source and neo-proprietarist approach to code ownership. The worst cases actively deride the actual project teams, in the interests of their supposedly superior version.
Time will tell whether the model is as self-defeating in the market as it is philosophically. Only some of the benefits of software freedom are passed to the user.
4. Software-as-a-service (SaaS) and the cloud
Here the business model has finally become services-based, where the full economic benefits accrue to the consumer of the software--in this case the service provider--and what is passed on to the end customer is the service they are to consume.
This model is already phenomenally successful and not just in the search-engine and advertising arena. Predicted by many to become utterly pervasive, analyst firm Gartner is predicting explosive growth in free-software usage on the back of SaaS.
5. Pure services
The pure-services model acknowledges that computer hardware is a commodity and thus traded as near as possible to its marginal cost of production. It also acknowledges that, in an undistorted, free market, software is at its marginal cost of production, too--that is, zero.
Under this model, organizations get the most cost-effective technology usage possible by combining commodity hardware with free software and the expert capability required to turn them into production systems. The pure-services model extends the benefits received from free software by SaaS users to the rest of us.
So, next time you're evaluating an open source offering that's been placed in front of you, it's worth spending a little time to understand exactly what the vendor means and exactly how many of the benefits they plan to pass on to you.
As chief executive of Sirius Corporation, Mark Taylor has been instrumental in the adoption and rollout of open source software at some of the largest corporations in Europe, including a growing number of companies running exclusively on free software, end to end, server to desktop. A direct participant in some of the leading enterprise open source projects, Taylor is also a well-known authority on all aspects of the open source phenomenon. He contributed this article to ZDNet Asia's sister site, ZDNet UK.
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One Error, needs fixing near the end
You said:
>> software is at its marginal cost of production, too--that is, zero.
Which is incorrect, I don't mean to be picky, but software production is very expensive. software reproduction is as close to zero as electrical signals will allow. So whilst giving it to everyone in the world is free, making it in the first place is bloody expensive.
It's about time companies started paying for new development (as a service) instead of either expecting a product license world view, or completely always free (as in cost) software.
Posted by Martin Owens on Monday, January 26 2009 07:51 PM