If You're Looking For The Open Source Business Model, You're Looking For The Wrong Thing

from the that's-backwards dept

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Every so often we see a similar article to the one penned recently by Ashlee Vance in the NY Times, bemoaning the lack of "open source business model" success stories . Now, Vance is a top notch reporter and does great work for the NY Times (as he did for The Register before), but these kinds of articles seem to miss the point. They go looking for "open source" company success stories, and find that most open source software companies don't end up doing very well, and the few that do okay end up selling out to other companies (MySQL, XenSource, SpringSource) and conclude that, outside of perhaps RedHat, "open source" isn't a very good business. But that misses the point. Open source software, by itself,be much of a business. Just asisn't much of a business by itself, but it can be a huge component of a larger business, open source software is part of what helps many other businesses.So, while Vance dismisses the fact that companies like Google and IBM rely tremendously on using open source software to be the foundation of their multi-billion dollar businesses, it's time to recognize that. Just as we talk about how the new music ecosystem involves using music to make other things much more valuable, the "open source business model" is using open source software to make other things much more valuable. The companies that haven't gotten very far trying to sell open source software are in that spot because they don't understand open source business models themselves, and seem to think that the focus should remain on selling software, rather than using the software to make other things more valuable. While Vance dismisses companies like Google and IBM using open source software as "pawns," it's time to recognize that that is the most reasonable way to build a business on open source work. And there's nothing wrong with that at all. It's helping build tremendous businesses that have a huge impact on the world economy.

Filed Under: business models, open source, services, software

Companies: google, ibm, mysql, red hat