Open Source on the BBC

In Business on Radio 4 dedicated a programme to Open Source software.  For those of you out there who are all about startups,  VC and the buzz of business, it gives a great explanation of the Open Source business model and why it is going to beat the proprietary software model in the long term.

For those of you that can't be bothered to listen, the bottom line is that the Open Source business model sees profit as coming from services and support arrangements around software rather than from charging for the software itself.  Give the software away free (as in beer and as in speech) then offer the users the opportunity to purchase support from you.  You won't make so much money per user, but you'll get a lot more users.  It works!

Thanks to Steve Lee for the heads-up on this one.

Comments

  1. This is the way that most startups and VCs view things, too, tbh. Doug Richards, the entrepreneur and angel from Dragons Den, said himself at Mediatech2.006 that having the patents on something (what the Dragons from the Den always seem to be banging on about) was much less important today than how you package and follow up the service. If Open Source doesn't have the exclusivity on good support and moreover most web-based startups offer support for free or use the community to provide it for the bettering of the free product they are receiving, is there a further difference we're not seeing?
    Disclosure: I'm about to eat dinner and haven't heard the radio show ;-)

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  2. Excellent question Ewan, which gets straight to the heart of the matter.

    The difference is huge. Take Flickr, Youtube, Bloglines, Netvibes and Pageflakes for example. All of these companies rely on the fact that they have a product that they have developed and they own. None of them are giving away the code that makes their services run. That's what an Open Source company does. It literally gives away the code upon which its business is built! It says "here you go - if you want to set up your own version of our product, feel free." The big Web2.0 companies may talk about openness and freedom, and the importance of service, support and community above the actual product, but none of them has the cojones to Open Source their code (apart from Second Life, which is only going part of the way).

    Making money out of Open Source is not easy, and often it's not the original developers that end up raking in the moolah - look at Moodle, which has spawned many companies offering support whilst the original developer has not, by all accounts, made much money at all.

    What an Open Source company potentially gains is a world of developers willing to work on Open Source software for nothing more than kudos. It would be hard to believe that this would happen, were it not for the undeniable fact that it has and does.

    Perhaps the picture I paint is too simplistic actually. Take Gnu/Linux. It was originally developed by Linus Torvalds and a host of volunteers, building on the work of others. At some point, IBM realised that it could make some money by selling and supporting servers running Linux, so it pumped a lot of money into developing Linux. IBM benefitted by having a better operating system to punt, and the world benefitted because Linux remains free to all. This is the new reality. Free software developed by individuals with an itch to scratch and/or businesses that see a potential profit down the line. Underpinning this freedom is the Gnu General Public License. Required reading :)

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  3. I know the GNU Public License and guess my question comes down to whether the proprietary code in the Web 2.0 tools you name is, now, that secret. If you know Ruby, Ajax, Javascript, HTML, XHTML, XML and all the rest is it not relatively easy for a group "that know how" to replicate those services? In the same way, does it not take a certain degree of having "that know how" to take advantage of the development opportunities in Open Source? At the end of the day, for the average user, they're both free and apparently stable platforms. What are the other USPs of Open Source?

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  4. Ask Flickr for a copy of their code - I'd been fascinated to hear how you get on ;) If they won't give it to you, you have to ask yourself why not. More interestingly, you have to ask yourself why on Earth anybody would - because people do! Once you've got an answer to that, you'll be on the way to grokking Open Source. IBM invested a billion dollars in writing code for Linux under the GPL license, and have apparently recouped that investment. I'm clearly not doing a good job of explaining the benefits of open Source, but Big Blue seem to be convinced.

    Well again you've hit the nail on the head with your question about replicating a service - like let's say Flickr. It could be done. The developers at Flickr might take offence at your suggestion that it's an easy job, but it could be done. But imagine how much better my alternative Flickr could be if I spent the time on improving Flickr starting with their code, rather than replicating it from scratch. That's the Open Source dividend, and of course Flickr would benefit too because they could use all the improvements I made.

    I fully understand your difficulty here Ewan - Web2.0 companies have been greatly inspired by the success and ethos of Open Source, and so in many respects they look like Open Source endeavours. Doug Richards is reading from the Open Source hymn book. This is definitely a Good Thing. But without free source code the Web2.0 guys are missing out on Open Source's greatest strength.

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