Posted on 06/07/2005 5:43:09 AM PDT by Incorrigible
Computer Hardware & Software
The Open Source Heretic
05.26.05, 6:00 AM ET
Since 1993, Larry McVoy has been one of the closest allies to Linus Torvalds, creator of the open source Linux operating system.
Yet after all these years, McVoy has come to believe that the open source business model, which is all the rage these days among computer makers like Hewlett-Packard (nyse: HPQ - news - people ) and IBM (nyse: IBM - news - people ), cannot generate enough money to support the development of truly innovative software programs.
"Open source as a business model, in isolation, is pretty much unsustainable," says McVoy, founder and chief executive of BitMover, a San Francisco-based company that makes a software-development tool for Linux called BitKeeper.
McVoy understands open source as well as anyone on the planet. Though his product, BitKeeper, is not an open source program, from 2002 until 2005, McVoy let open source programmers use it for free. But as of July, McVoy will stop the give-away, saying it has been costing him nearly $500,000 per year to support Torvalds and his programmers.
Open source advocates have pushed McVoy to "open source" his product--that is, to publish the program's source code, or basic instructions, and let the world use it for free. But McVoy says it is simply not possible for an innovative software company to sustain itself using an open source business model.
"We believe if we open sourced our product, we would be out of business in six months," McVoy says. "The bottom line is you have to build a financially sound company with a well-trained staff. And those staffers like their salaries. If everything is free, how can I make enough money to keep building that product for you and supporting you?"
The term "open source" refers to software that is distributed with its source code so that anyone can read or copy that code. Most commercial programs, like those made by Microsoft (nasdaq: MSFT - news - people ), keep their source code secret.
Open source products typically are distributed free, since it's pretty much impossible to charge money for something that anyone can copy.
So how do you make money with open source code? Some companies, like Red Hat (nasdaq: RHAT - news - people ), distribute Linux for free and then make money selling service contracts to users.
"One problem with the services model is that it is based on the idea that you are giving customers crap--because if you give them software that works, what is the point of service?" McVoy says. "The other problem is that the services model doesn't generate enough revenue to support the creation of the next generation of innovative products. Red Hat has been around for a long time--for a decade now. Yet try to name one significant thing--one innovative product--that has come out of Red Hat."
To be sure, a few open source companies are successfully generating revenue and even (possibly) profits. But none of them generates enough money to do anything really innovative, says McVoy, 43, an industry veteran who has developed operating system software at Sun Microsystems (nasdaq: SUNW - news - people ), Silicon Graphics (nyse: SGI - news - people ) and Google (nasdaq: GOOG - news - people ).
"The open source guys can scrape together enough resources to reverse engineer stuff. That's easy. It's way cheaper to reverse engineer something than to create something new. But if the world goes to 100% open source, innovation goes to zero. The open source guys hate it when I say this, but it's true."
Torvalds disagrees with McVoy about the sustainability of open source.
"Open source actually builds on a base that works even without any commercial interest [which] is almost always secondary," he says. "The so-called 'big boys' come along only after the project has proven itself to be better than what those same big boys tried to do on their own. So don't fall into the trap of thinking that open source is dependent on the commercial interests. That's nice gravy, but it is gravy."
But McVoy says open source advocates fail to recognize that building new software requires lots of trial and error, which means investing lots of money. Software companies won't make those investments unless they can earn a return by selling programs rather than giving them away.
"It costs a huge amount of money to develop a single innovative software product. You have to have a business model that will let you recoup those costs. These arguments are exceedingly unpopular. Everyone wants everything to be free. They say, 'You're an evil corporate guy, and you don't get it.' But I'm not evil. I'm well-known in the open source community. But none of them can show me how to build a software-development house and fund it off open source revenue. My claim is it can't be done."
And though open source software may be "free," sometimes you get what you pay for, McVoy says. "Open source software is like handing you a doctor's bag and the architectural plans for a hospital and saying, 'Hey dude, if you have a heart attack, here are all the tools you need--and it's free,'" McVoy says. "I'd rather pay someone to take care of me."
McVoy argues that the open source phenomenon may appear to be sustainable but actually is being propped up by hardware makers who view open source code as a loss leader--something that will entice customers to buy their boxes.
"Nobody wants to admit that most of the money funding open source development, maybe 80% to 90%, is coming from companies that are not open source companies themselves. What happens when these sponsors go away and there is not enough money floating around? Where is innovation going to come from? Is the government going to fund it? This stuff is expensive."
Even the popular Linux operating system would suffer if hardware makers stopped their sugar-daddy support for its development--putting their own programmers to work on Linux, and sending payments to the Open Source Development Labs, the non-profit organization that employs Torvalds and some of his key lieutenants.
"If hardware companies stopped funding development, I think it would dramatically damage the pace at which Linux is being developed. It would be pretty darn close to a nuclear bomb going off," McVoy says.
McVoy says he believes the software industry will reach some kind of balance between open source and traditional software companies. Open source companies will make commodity knockoffs and eke out tiny profits, while traditional "closed source" companies will develop innovative products and earn fatter profits.
Heretical as this may seem, McVoy wants to be on the side that innovates and makes money.
Not for commercial use. For educational and discussion purposes only.
When he says "Open source as a business model, in isolation, is pretty much unsustainable," that's what I'm talking about. It's almost like looking at it through a managerial accounting lens.
"You want to spend how much time making what? How do we ever recoup those costs, let alone make a profit?"
Could you point out where anyone in this thread said anything about making open source software illegal? Geesh...there is a difference between saying that something isn't a good business model and wanting to make it illegal.
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> Those products are hard to beat.
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there have been several failed attempts. a couple years ago a java solution came real close in functionality but then a private company bought out the developer and closed-sourced it. (still trying to remember the name of it...)
accounting is so customized and every open source attempt at it fails miserably. yet QuickBooks Pro seems to have figured it out for a very large segment of the small to medium sized business world.
You keep dropping the word "innovation", but GPL clones like Linux are not about innovation, they're about making cheap knock offs of existing commercial products. And just like a leech provides some benefit to the overall food chain, it's not a high order organism.
I think you need to try adding some fiber to your diet. Have a nice life.
Case in point being Internet Explorer. Once microsoft pretty much destroyed all effective competition, they disbanded the development team. Even the epidempic of viruses/worms/trojans/spyware wasn't enough to make them get off their rear ends. Now that FireFox is garnering mindshare, microsoft is prompting IE7. Coincidence? I think not.
Open source has a great future in government computing, where making a profit isn't essential, but controlling costs is. Taxpayers should welcome expansion of open source systems into the government agencies. I want to just scream when I think of all the MS systems in government offices loaded with applications that the average civil service worker has no clue how to use or doesn't need as part of his job that just comes as part of Windows' bloated offerings. Then add to that all the security issues, time spent testing and rolling out hotfixes, etc. THAT'S why China is big on open source. They've got the largest bureaucracy in the world. It saves them money and gives them better security.
If I were in charge I'd subsidize Windows purchases to China like crazy. I'd even give Msoft a tax break to distribute it there free.
I'd want Windows and IE on every desktop in the "Middle Kingdom"
Then I'd have the CIA hire up every script kiddie to be found.....
But "everything" is not free. What an open source company is selling is service, not software. I don't know if BitKeeper is complex enough to warrant service contracts, but other products are. While the database program, for example, might be free, maintaining the database itself isn't. If you're the database software vendor, there's more money to be made in maintaining the database and the software than in one time sales.
What was innovative about windows95?
If it can't keep up, it will quickly fade away.
That folks get so worked up about it, proves that it very may be able to keep up and do so very well.
I looked a few free Point of Sales system, they all sucked so I had to write my own. Moving it over to MySql on week-ends. I like some open source, Apache is great, MySql is great, Linux sucks, used to be nice years ago but these days I don't like it at all. I think I'll give freeBSD at try next time I have a throw away cpu. Too bad System 5 (AIX) appears to be dead, that was a nice implementation of a Unix OS.
Do you mean the Linux kernel or are you referring to a particular distribution? I use Fedora on my laptops mostly because it is so easy to install, but I stopped using any distro for my servers quite a while back. I have used most of the major distributions at one time or another. These days, I usually build my Linux OS from source when I need it.
I have played around with freeBSD and OpenBSD a little bit. I find them to be kind of fun to play with when I need a hacker fix. I try to stay away from the BSD community, though. Linux has its share of whiners and crybabies, but BSD seems to be crawling with them.
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