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.
Horsefeathers. All the tech stocks have tanked. That has nothing to do with open source. It has to do with tech being way over-hyped and over-sold in the 1990's. On balance, the companies who have committed to open source are doing no worse than their proprietary-only counterparts.
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Not in the last 12 months. Look at the charts for those three yourself, Red Hat went from $30/share to $10.
Numbers in thousands above
Perhaps we should compare notes. I am in the exact same situation.
You admitted Red Hat is doing just that.
Should open source software be illegal?
That sure is the Linux mentality. Want to know the time? Here are instructions (incomplete, vague, and written with a snotty, know-it-all contempt for newbies) to mine ore, refine metal, and make a sundial.
One of the funniest things I ever read was a set of instructions for setting up networking on Linux - it read, "If you see something you don't recognize, Google on it and get hip." Umm, hello, setting up network access - Google doesn't work without said access...
(Denny Crane: "Sometimes you can only look for answers from God and failing that... and Fox News".)
Nearly doubled their gross profits in two years, very impressive.
Was that what you wanted me to see?
I've some bad news for you, my friend, it already is. Last year there were more Linux servers deployed on the internet than any other brand, including and especially Mickeysoft. Care to guess what the number one web server application on the planet might be? Here's a clue for you, not a single one of the Apache developers ever goes hungry. People who don't believe open source is a viable business model simply don't understand the model. That doesn't invalidate the model any more than a lack of understanding invalidates nuclear physics.
Open source will never, by definition, create monopolists like Bill Gates who accumulate billions of dollars enforcing their "intellectual property" rights and use those billions to pay lawyers to steal the "intellectual property" of others, but it will allow people to sell their knowledge of open source software, either as employees or independent contractors, and make decent livings.
I make a tidy little living converting businesses' Excel spreadsheets into multiuser database applications using Apache webserver, MySQL database and Perl. A big plus is those businesses don't have to worry about the Business Software Alliance raping them.
Yep. I have no problem with Red Hat making a profit. The stock is being punished though.
It was not originally meant to be. It started out as a basement hobby for geeks with zero market potential anyway.
When you develop something for free, there's no incentive to do your best since you aren't getting any real reward for the labor and time you put into it.
There is an incentive, it's just not a monetary one. A lot of these people work on these programs because THEY THEMSELVES INTEND TO USE THEM! Therefore, their motivation to write good software is that they themselves want good software.
> can tell you that, on balance, the breadth and depth of open
> source software available out there is far superior to its
> commercial counterparts.
>
except for accounting systems... unless you'd like to fill me in on where i haven't been looking.
do you give away your services?
"My company uses Linux, Apache, MySQL and Perl, and we wouldn't have survived without it--we're very small, and open-source keeps our licensing costs low. "
Wooohooo. Dittos from me. I went Java as well, use some php. As I point out repeatedly, the other big factor for us small guys is that I don't want to be rewriting my code every few years to match some new Microsoft fad designed to be an excuse for another upgrade fee. As a small entity, I can't afford to be yanked around like that.
Of course not.
Should open source software be illegal?
Cant say that I really disagree with this. I think any model in isolation wont innovate! You just end up with one static system.
"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?"
Huh? This I disagree with, RedHat is a perfect example of a company with a strong product that makes its money on a service (mainly RHN).
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.
RPM, one of the most used and useful binary package managers on and *nix system.
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 IBM, and the like pulled out of Linux it would really hurt, but not kill the project. Linux got pretty damn far without them. Now part of the Business model around Linux is what encourages companies like IBM to invest. IBM is getting far more out of Linux than it is putting into (in terms of dollars), if this were not true IBM would stop putting money into it.
McVoy says he believes the software industry will reach some kind of balance between open source and traditional software companies.
So do I and I think we are already there..
Open source companies will make commodity knockoffs and eke out tiny profits
What was the first project to truly integrate Windows and Unix for things like file servers, domain authentication, and print sharing? What has become the standard way that even SCO uses to do that? its Samba an OpenSource innovative project
The first really usable web based UNIX system management system I ever saw was webmin, again an open source project.
while traditional "closed source" companies will develop innovative products and earn fatter profits.
You mean like buying dos off somebody and ripping off Apple to make a passable gui for it? ooo oo I know, how about a VMS descendant with the GUI layer in the kernel? was MS office innovative? $$ does not always come from innovation, and innovation does not always come from money..
"Nonetheless, open source makes it possible at all for me to do what I am doing."
Exactly. And now that I'm about to cash in, I need to send some checks to Mysql especially.
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