cannot generate enough money to support the
development of truly innovative software programs.
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.
Duh. Welfare doesn't work and neither does Open Source in its current form.
For Open Source to work it needs to be self sustaining. That is, consumers of OSS need to provide to the community as well.
However like any good welfare program OSS attracts software sponges who consume everything, contribute nothing and then bitch and moan about what they are getting for free.
Red Hat is not free.
Well said. I put three kids through college on it and am making a very comfortable six figures architecting open source systems. Not bad for an aging "hippie," eh?
and I use firefox, and I like it. There are some open source apps in every niche, but open source ain't taken over, but gonna happen. somebody's going to get paid, an engineer to make open source work, or a big software company to support a person with less knowledge.
yep, red hat resells linux on cd. dirty capitalists
You are free to make copies of RedHat Enterprise Server and distribute them. You can even charge for it if you find anyone uninformed enough to pay.
RedHat will not support Enterprise Server installations that have not been purchased from them.
They are selling the support.
Send me a link from Red Hat's web site where I can download any version of RH for free.
Gee I guess the thousands a year I drop on RedHat stuff is sponging right?
I applaud any company's right to make a profit, including Red Hat and Microsoft. I also support OSS - I have a Slackware 10.0 box under my desk here. Since I'm not a developer, I support OSS monetarily. I'm happy to buy an Apache tee shirt to keep the foundation's devs fed.
A lot of the proprietary software I have dealt with in my time falls way, WAY below the threshold of "excellence"
Once a vendor has you by the short hairs with a proprietary format and/or high costs to switch, don't count on getting any more "excellence".
If you dont agree read the license that comes with a copy of RHEL.. If you could just give the iso's away CENT-OS would not exist..
If you know how to tie into their proprietary DB and query it from outside their framework, I'd love to hear about it.
Thats not RHEL..
The GIMP, Apache, PHP, and gcc developers are sure going to be sorry to hear that their software doesn't qualify as truly innovative.
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