Open Source Business Model: No, Seriously

Email.Email weblog link
Blog this.Blog this
David Sims

David Sims
Jul. 25, 2001 05:02 PM

Atom feed for this author. RSS 1.0 feed for this author. RSS 2.0 feed for this author.

I took in a panel on Wednesday morning at the Open Source Strategies Summit (one of the tracks at the Open Source Convention) about open source business models for the next-generation Internet.

In introducing the panel, Tim O'Reilly asked everyone to "think pretty hard about interoperability," which depending on how you hear that, could be a gentle reminder of the need for standards, or could be an attack on proprietary systems that lock out competitors. "The war is not between open source and Microsoft," Tim said. "It's a war between an interoperable world, where there's room for many players, and a winner-take-all world."

So how about this room for many players business? Who could deny that the Internet-driven boom of the late '90s was made possible by an open system with a low barrier of entry? And yet the last year or so has been something less than inspiring for the open source business model, with the failure of Eazel, and hard times for many Linux companies.

The panelists, whom along with Tim included economist Hal Varian from UC Berkeley's School of Information Management Science, CollabNet CEO Brian Behlendorf, and Michael Olson, vice president of marketing for Sleepycat Software, offered advice that sounded ... well, awfully familiar. Start with open source code, develop it, give it back to the community. Then make your money off of services, consulting, some small amount of shrink wrap.

Some think you should hold onto core enhancements (Behlendorf), others think you shouldn't (Tim). Either way, there has to be a clear focus on some competitive angle that makes the effort of your labors something more than a commodity. Not because we've all become hard-nosed, ungenerous misers in the past year, but simply because the conditions for using other people's money (that is, investment or venture capital) have changed (some would say "matured"). That mythical future, when we promised that the benefits of largesse would be returned tenfold, is upon us. And then some.

David Sims was the editorial director of the O'Reilly Network.