Free Republic
Browse · Search
News/Activism
Topics · Post Article

To: Joe Bonforte
Open Source may or may not be a good idea for the consumers (it depends on circumstances), but companies that depend on Open Source software for revenues have a built-in cap on how much they can make. Venture capitalists don't like that.

That may be true in the software business, but HP is a hardware business and I do not see how restricting themselves to be an MS only shop will benefit them.

Even in software, one has to wonder if the open source model is not better than towing the MS line. Too many companies have gone under playing by MS's unfair rules.

23 posted on 09/15/2002 5:35:13 AM PDT by gore3000
[ Post Reply | Private Reply | To 8 | View Replies ]


To: Nick Danger; gore3000
Nick said:

How much money do you think Dell or HP make on a copy of Windows that they resell as an OEM? Do you think it's any different than what they would make installing Linux instead?

and gore3000 said:

That may be true in the software business, but HP is a hardware business and I do not see how restricting themselves to be an MS only shop will benefit them.

Both of you completely missed the point of my comment. I said: ...companies that depend on Open Source software for revenues have a built-in cap on how much they can make. Venture capitalists don't like that.

Thus citing Dell and HP is irrelevant to my argument. How much venture capital do you think they have to raise? That would be approximately zero.

Venture capitalists only care about companies that have the potential for very large growth rates. That's the only way they can get the kinds of returns they want, after factoring in the failures they fund. Open Source does not offer them that.

Open Source may very well be a good idea for Dell, whose competitive advantage lies in assembly and distribution. But if a company came along and said, "OK, we want to compete with Dell, and our competitive advantage is going to be our use of Open Source. We'll spend the money to jazz up Open Source stuff to really make a difference."

The venture capitalist's first question will then be, "And what prevents Dell from taking all the stuff you developed and using it competitively against you?" The answer is "Nothing...". And the VC says, "Well, have a nice day, then."

My point was that trying to create a model with Open Source that lights up venture capitalists is pretty hard, because they care so much about competitive advantage, and the very nature of Open Source prevents gaining competitive advantage with it.

This also applies to established companies in some ways. HP and Dell may well use Open Source to save some money on their boxes in the commodity parts of their business. But HP also sells high end servers. If they run the same OS as everyone else, what competitive advantage does that give them? None. (Sun, et. al., have the same problem. Linux is actually a much bigger threat to Sun than it is to Microsoft.)

I think that's the real reason HP let this guy go - because they see Open Source to be as much a threat as a help to their business. I don't think it had much to do with whether they wanted to suck up to Microsoft. It surprises me that folks who don't believe in conspiracy theories in the rest of the world are always ready to believe one when Microsoft is involved.

24 posted on 09/15/2002 7:48:52 AM PDT by Joe Bonforte
[ Post Reply | Private Reply | To 23 | View Replies ]

Free Republic
Browse · Search
News/Activism
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson