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.
breadth and depth of open source is far superior?? linux, mysql, apache ?? ever been to a compusa? there are tons of commercial apps of every type, and small companies exploiting all types of vertical markets. some open source communities will survive and thrive, but most won't. I know linux scales up better than windows... but so does unix.
heck no it shouldn't be illegal, who said that? should it be illegal for hippies to live together on a farm with no electricity? thats what open source is, a 2005 hippie collective, trying to beat 'the man'
I haven't had any direct dealing with accounting systems, so I can't drop any names on you off the top of my head. I know there are some open source AR, AP, payroll, and inventory systems out there, but for the most part, that kind of thing tends to be heavily customized. I'm sure all the open source components for creating accounting systems are there. If you're serious, I'll definitely ask around.
If IBM donates a foundation that makes a product under GPL that IBM will turn around and use are both not profiting from it?
So a highly skilled programmer who loves what he does and finds his day job boring is a "hippie" because he works on an open source project in his spare time that excites him and enables him to expand his programming knowledge and skills?
"I bet you would get more sleep and be able to go into production faster if you used Windows Server 2003, SQL Server and .NET development to do your project. Granted it wouldn't be "free" but certainly less than 6 figures and probably less than 5! A trade off I would consider worthwhile."
I'm in the same boat as Lafrost. I can tell you my project WOULD NOT HAVE HAPPENED if it wren't for open source. And I have access to 2003 server, and SQL server (on clent systems), and I absolutely would not go back that way even if the fees were paid. Our choices were sound, not for everyone, but they work very well for us.
excellent model! i agree whole heartedly re the BSA.
i'm always surprised at the number of small to medium sized business that are in the technological dark ages due to the fact that (a) they don't have the knowledge to do otherwise and (b) the cost of software licensing to come out of the dark ages and increase productivity is too high of a risk. and they can't afford to sink $ into (a) and (b), it is just too high of a risk that they are burning cash.
but w/oss they can afford to hire the knowledge to take them where they need to go in a very low risk manner financially.
Umm wnat to knwo the time, look at the clock in the bottom panel of the defaul installations (which is graphical) of your dang computer, just like windows...
All tech is being "punished."
Look at Intel.
1. The programmers don't understand the business side.
2. The business folks don't understand what technology is/isn't needed.
For many years, all too many IT folks have been selling crap --either crap that doesn't work or crap that users simply do not need. Someone will end up getting skinned. It probably will be those (software makers) that will get it up the wahzoo. And, besides, the margins the software makers have been making over the last years have been overinflated. Some of this is just the market figuring out that the price has been too high. As well, now there are market (cheaper) alternatives that present the same (or perhaps better) results...hence, a better value.
Which is what most of these arguments come down to: value.
If the software product or service provides the value to the customer, they are happy. And, while there are many examples, the whole "Microsoft-REALLY-REALLY-not-paying-attention-to-their-customer-needs" has become one of the more stark examples of a company that thinks it is providing value when it isn't.
Firefox didn't just happen. Microsoft was asleep at the wheel. Spyware, malware, and pop-ups were out-of-control. So, some folks that had some know-how didn't reverse engineer IE...they built a better app. Plain and simple.
The "Linux folks" (in their various stripes) finally started to put a GUI on the front-end of a powerful, secured, operating system. They didn't reverse engineer the OS. If the "Linux folks" have reverse engineered anything, they reverse engineered the "windows" GUI which, I would hasten to point out, is what Microsoft did with Apple's MacUI. (And, yes, there's the argument that Apple ripped MacUI off from XPARC. Course, there is notable evidence that Apple didn't steal the XPARC stuff. Read more here, here, here, and here).
Is Microsoft evil? No.
Have they been stupid in the last 7 (or so) years? Yes.
Whose to blame? Lawyers.
[Aside]Look, it isn't an easy issue.
When MSFT started issuing their defense for giving away IE, they said it was because IE was tied to the OS. It wasn't...at least not to the degree that their lawyers argued. After that, MSFT started to tie-in IE directly to the OS.Result: The tie-ins provided the channels for spyware and malware to infect client systems.
Result: An innovative product like Firefox, which is a browser that runs as an application on top of the OS. [End Aside]
That's not value. Value is what you do with those tools.
i am serious but from a small-medium sized business and personal perspective.
for both of those realms i agree that today there is everything one needs to stay away from M$/B$A without sacrificing functionality... except for Quicken/QuickbooksPro equivalents.
I was talking about professional software. Open source is not a big player in the gaming and home computing world simply because of the knowledge base. The most notable exceptions to that are Firefox and its big brother Mozilla, of course. Did you know that Firefox beat IE last year in new installations?
I doubt Linux will be a serious candidate in a viable home desktop for the foreseeable future. Novell and Mandrake are making a run at it, but only time will tell. Open source has made some big inroads into the gaming world, but they are far from a major player. Transgaming is probably the most successful of those players with cedega and Point2Play.
I always have to laugh at predictions that "some open source communities will survive." That's pretty much stating the obvious since some of them predate Microsoft and most of the current computing world.
"Perhaps we should compare notes. I am in the exact same situation."
You bet. I am doing a stock market/management program, a mysql administration program, plus various mixed ventures where we use Access as a front end on widows machines but tie to MySQL. So, I'm sure we both have looked loooong and hard at the Microsoft option and found it wanting. Not to say open source doesn't have hurdles, but I'm pretty much over the hump now and won't go back.
Might want to check out Post #48
Those products are hard to beat. They are one of the shining exceptions in the whole MS realm. They produce superior products that simply work as advertised. One of the only reasons I keep a Windows system around is to run Turbo Tax once a year. Mighty fine stuff, that.
I'll do some investigating when I can and FReepmail you if I find anything good on the open source accounting front.
"A lot of these people work on these programs because THEY THEMSELVES INTEND TO USE THEM! "
That is a great point, I plan to keep a lot of my code "in the family". Therefore I'm meticulous about things like documentation and proper structure. Open source is definitely eclectic, but that fits what I'm doing.
thats the point, the code is free, but you have to pay an engineer $$$ to make it work. now I am a C++/VB guy, and I am working on a mac... open source is great, a few good apps will survive and thrive, but its not going to product 3d medical imaging software.
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