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Post details: OSBC2007 SF Keynote 5

05/23/07

Permalink 10:07:53 am, Categories: Computers and Internet, Open Source, 328 words   Posted by: Joseph A. di Paolantonio English (US)

OSBC2007 SF Keynote 5

Open Source: Why Freedom Makes a Better Business Model, Marten Mickos, MySQL

Success is going from failure to failure without loss of enthusiasmend quotation
-- Winston Churchill

By doing things wrong, we will learn to do things better.

Freedom of speech vs. Free Beer: Open Source doesn't give much free beer away, but they give the customer the flexibility to use the product freely.

Liberating products goes beyond software: eBay freed Trade, Second Life freed socializing, IKEA freed furnishings and the USA freed entrepreneurism. Software freedom is so powerful as ~100,000 mostly white males now between 40 and 60 years of age created the current information society and there are now ~30,000,000 developers with much broader demographics on the Internet today.

Outsized software profits come from

  1. Innovation
  2. Netowrk Effect
  3. Scale
  4. Lock-in

The first three apply well to F/LOSS but the fourth is not compatible with open source licensing.

Filtering results for software companies, closed and open, through the philosophy of open source business models with lower sales and marketing costs, and it may be that open source companies can scale in size with profitability the same as closed source, but get to higher levels of profitability at faster rate, at a smaller size.

Open Source is not a business model, but a smarter way to produce and distribute the goods.

Success in open source requires that you serve two disparate groups.

  1. Those who spend time to save money
  2. Those who spend money to save time

People in group one may recommend you to those in group two, but are unlikely to convert; still there is benefit to both groups. [To me, this is the key to open source - recognizing, serving and benefiting from both groups. This is why community is so important.]

Marten found a baker's dozen of open source business models in active use today. I'll link to the online version when available. All of them are hybrid models that provide free software, while charging for something else, from services to hardware.

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Comment from: anonymous [Visitor]
There are not 30 million developers worldwide. The current census of programmers worldwide is about 15 million. USA, Japan, India and China in that order are leaders.
Permalink 05/28/07 @ 22:15

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