One the most difficult things in business is changing your perspectative in order to understand a new paradigm or perspectative. Business have tendency to see things through the established paradigm that has served them. This tendency is especially reinforced in successful companies largely because of their success. So when they look at a rapidly changing marketplace such as the technology industry, they have a tendency to look at through "previous paradigm colored" glasses.
IBM was unable to grasp the importance of the personal computer revolution. They licensed the OS from a small but successful computer software company. Had they realized the importance of the coming revolution, they would have bought Microsoft outright. However IBM was in the mainframe business and they never thought these underpowered lightweight machines would take off as they did. They were largely a heavy iron company, and saw the world through those ideas. They never envisioned the network effects of the PC revolution with it's cheap PCs, putting computing power everywhere.
In many ways Microsoft is in a similar position tha IBM was in in 1981. While they have a monopoly on the desktop PC market similar to the market that IBM had in mainframes, they don't quite seem to understand the paradigm shift that is occurring. Google on the other hand does understand it. It's funny to watch comments on recent slashdot story about Google patents. MS still sees everything through the lenses of the Windows monopoly. Everything is about the desktop and tying web services to the Windows desktop. This is a solid approach as it continues to support the current monopoly. It's also the safe approach which makes it unlikely to succeed in the long term.
Companies that take advantage of paradigm shifts are the ones that stand to benefit the most from the paradigm shift. MS right now is simply trying plug a hole in the dike to protect the Windows monopoly. By protecting the Windows monopoly, they are missing out on the key characteristic of this transformative revolution right now in computing.
"The network is the computer" was a key marketing slogan of Sun Microsystems for years. The slogan was designed to sell Suns larger systems to corporations. Google has realized that dream by building the world's largest web computing platform. It's built the ultimate mainframe system so scalable, they can serve hundreds of millions of requests daily. The Google platform takes the Sun slogan and makes it reality. It's a platform a company can use to build in application, and not really worry about scability.
Microsoft's response to this is likely to be two fold. First off they will expand their service offerings to include a web services component. Secondly they will attempt to couple those services very tightly with the Windows desktop. What they will not do is build the massive application server that Google has already built.
Microsoft will always have the desktop PC monopoly. The importance of that monopoly will certainly decrease just as the mainframe market didn't disappear with the PC, it just wasn't the only market.
Friday, September 30, 2005
Thursday, September 22, 2005
Google - The Network?
Recent Google moves have left quite a few analysts wondering "What are they doing." The four billion dollar secondary offering, buying up unused dark fiber on metropolitian markets to a recent job opening that you will provide leadership on product vision and execution of projects that enable using Google's search and advertising technologies to enhance users’ Television viewing experience. Analysts have pondered these moves and concluded that "they need the fiber to roll out a WIFI network for their search", to stave off competition from a "hard charging" Yahoo. I see these moves and I see the end game for Microsoft. I must hand it to the guys at Google. They run at tight ship (it's still a small company really) filled with really bright people. They are all about the far right side of the Bell Curve.
The enormity of what Google is attempting so far exceeds the vision of the analysts that cover them that they simply cannot do justice to what they are doing. Many analysts think Google is in the search business. They are not. They are in the knowledge business. I alluded to this in a previous post comparing MSN search and Google search. If you take a close look at all of Google acquisitions, it's alway about a knowledge based company such as Blogger, Keyhole etc. Even their support of Wikipedia can be seen through this lens.
Another important thing to remember about Google is something that many people often miss. Google's most important assets are its people and the world's largest computing platform in the world that they have built. When I say the largest, I mean so large that no one really knows how large. Many people have speculated about the number of servers that Google runs. Most people guess 100,000. Most people are wrong. Google runs the world's largest single server at the Googleplex. As far as the number of machines, that's largely irrelevant as the computer system that Google has built can instantly be scaled simply by adding more machines. I would guess at this point they are adding machines all the time and 400,000 - 1,000,000 machines might be closer to the mark. How do I know this?
I don't but here's the reason why I think so. Gmail is Google's consumer mail application. When it started, it initially offered one gigabyte of storage. This was revolutionary at the time. Eventually Yahoo mail caught up and then Google upped the ante to 2.5 gigabytes. Now however when you visit Gmail you notice that the amount of storage that they allow is always changing. It's always increasing! This make competing with Google for storage next to impossible. Yahoo and Hotmail must use traditional provisioning methods to increase the amount of storage. Increasing the amount of storage a customer has requires purchase of equipment, planning and when the day come to announce your new HUGE storage capability, Google has beaten you because their system allow them to seamlessly add machines. Their cluster at this point is so tuned, they actually can tell you how much your storage will be increased to every second.
For a little more explanation, lets look the way most web applications are designed to be scaled up. Most applications usually have a load balancer, a set of hypertext servers and database servers. Scaling these requires adding machines and effectively tuning the engine as it were. You can add multiple load balancers etc. You get the picture. Google's derivative of the Linux operating system and the Google File System are structured from the ground up to seamless allow new machines to be added to the cluster without the huge startup time and rollout. This is may not look it, but it's a very very hard thing to do. When MS purchased Hotmail, they attempted to migrate to the system to Windows. This took several attempts and had several severe outages. Since MS is pretty much wedded to running the Windows operating system, I imagine their server rollout is pretty much what I described. Why? Because every MS announced web project I have seen such as the MSN Virtual Earth has crashed when posted to slashdot.org. I have never seen any Google service crash under any load. That's because their application runs on a platform that can seamlessly add machines to scale it.
This is a huge advantage structurally & culturally for Google. Let's take a look how Microsoft (and actually almost all companies who are not google are doing this). You develop the great new MS Earth. You send a PO over to procurement for 150 machines to support it. They approve it and you or someone will install it at the MS data center. Presumably MS has a group dedicated to maintaining these boxes up at Redmond. But see the difference? Your machines are your machines. To get more of them if your service is successful you will need to request another 200 of them from procurement with a reminder that you are exceeding your budget. If the service is really successful, you might need more but you have blown your budget out, and now you need to go upstream to order more. Microsoft is relatively flat still so this is possible. But you see the problem right, every project with it's own cluster, doesn't match the economies of scale that Google has built into their application. In fact each division instead is fighting for resources. There is some indication that the recent Windows re-org will attempt to address this problem. Initial indications are that Microsoft is attempting to blend the software and services to drive demand for the software. Once again they are failing to grasp the paradigm shift. That's another blog post.
Since Google has approached their system differently, each division gets to take advantage of the economies of scale in the platform. Adding additional machines adds makes everyone's application more robust. This means everyone enjoys a fundamentally robust platform to develop Google applications.
So what does this mean for Google's recent moves? Well let's imagine a Google set top box that has DVR functionality. Additionally this box operates as an additional node in the Google Network. All the dark fiber Google is purchasing allows them to delivery VOD (video on demand), telephony and HDTV with the greatest of ease. With the Google cluster of machines they can easily scale the VOD services without the tremendous expense that VOD start ups have typically have. In one fell swoop Google scales it's network, enters the home, and becomes the convergence of the typical internet and home entertainment. The killer feature driving adaption by the consumer of this brand new cable network? All on movies ever made on demand supported by the Google cluster. Google doesn't have own the end consumer either. They can partner with cable companies to provide them the platform. Google set top box is coming. Why else hire someone with set top box experience? Why hire if you aren't going into the home? VOD is solid match with Google's platform, namely the largest most powerful machine in the world. Most VOD business plans read like this. Buy 30 Million dollars worth of machines, sell services to the cable companies, hope burn rate doesn't kill us. Google is already in the wholesale business, namely wholesale search. They could easily roll out a VOD service as a wholesale service with "Powered by Google" as the slogan. Every new customer sold on the service would make Google computing platform that much more powerful (remember the economies of scale above). No single cable company could afford to build the computing platform that Google has built. It makes perfect sense for them to resell the platform.
Sounds too huge? Sounds too impossible? Remember Google has a history of nearly impossible things. When they announced 1GB of free email on April 1st, everyone thought it was a joke because it was a huge amount of space. Right now they offer nearly 3 GBs of free email space. That's more than 3 times the space in less 18 month. Only Yahoo has been able to respond with a half way competitive offering. Hotmail is still offering just 250 megs of email. Remarkably just two years ago 350 megs was unheard of in the free email space. Now it's just not competitive. Of course after the innovation it seems easily but some papers like the NY Times thought that much space would have an adverse effect on the search engine. Notice any Google outages lately?
Google is has built the world's largest computing platform. By extending that platform into the home through a set top box, they can offer features and killer applications that companies like Microsoft aren't even thinking about. By changing the paradigm, Google can not only rule the web, but also the digital home.
Technoratic Tags:
Google
Microsoft
The enormity of what Google is attempting so far exceeds the vision of the analysts that cover them that they simply cannot do justice to what they are doing. Many analysts think Google is in the search business. They are not. They are in the knowledge business. I alluded to this in a previous post comparing MSN search and Google search. If you take a close look at all of Google acquisitions, it's alway about a knowledge based company such as Blogger, Keyhole etc. Even their support of Wikipedia can be seen through this lens.
Another important thing to remember about Google is something that many people often miss. Google's most important assets are its people and the world's largest computing platform in the world that they have built. When I say the largest, I mean so large that no one really knows how large. Many people have speculated about the number of servers that Google runs. Most people guess 100,000. Most people are wrong. Google runs the world's largest single server at the Googleplex. As far as the number of machines, that's largely irrelevant as the computer system that Google has built can instantly be scaled simply by adding more machines. I would guess at this point they are adding machines all the time and 400,000 - 1,000,000 machines might be closer to the mark. How do I know this?
I don't but here's the reason why I think so. Gmail is Google's consumer mail application. When it started, it initially offered one gigabyte of storage. This was revolutionary at the time. Eventually Yahoo mail caught up and then Google upped the ante to 2.5 gigabytes. Now however when you visit Gmail you notice that the amount of storage that they allow is always changing. It's always increasing! This make competing with Google for storage next to impossible. Yahoo and Hotmail must use traditional provisioning methods to increase the amount of storage. Increasing the amount of storage a customer has requires purchase of equipment, planning and when the day come to announce your new HUGE storage capability, Google has beaten you because their system allow them to seamlessly add machines. Their cluster at this point is so tuned, they actually can tell you how much your storage will be increased to every second.
For a little more explanation, lets look the way most web applications are designed to be scaled up. Most applications usually have a load balancer, a set of hypertext servers and database servers. Scaling these requires adding machines and effectively tuning the engine as it were. You can add multiple load balancers etc. You get the picture. Google's derivative of the Linux operating system and the Google File System are structured from the ground up to seamless allow new machines to be added to the cluster without the huge startup time and rollout. This is may not look it, but it's a very very hard thing to do. When MS purchased Hotmail, they attempted to migrate to the system to Windows. This took several attempts and had several severe outages. Since MS is pretty much wedded to running the Windows operating system, I imagine their server rollout is pretty much what I described. Why? Because every MS announced web project I have seen such as the MSN Virtual Earth has crashed when posted to slashdot.org. I have never seen any Google service crash under any load. That's because their application runs on a platform that can seamlessly add machines to scale it.
This is a huge advantage structurally & culturally for Google. Let's take a look how Microsoft (and actually almost all companies who are not google are doing this). You develop the great new MS Earth. You send a PO over to procurement for 150 machines to support it. They approve it and you or someone will install it at the MS data center. Presumably MS has a group dedicated to maintaining these boxes up at Redmond. But see the difference? Your machines are your machines. To get more of them if your service is successful you will need to request another 200 of them from procurement with a reminder that you are exceeding your budget. If the service is really successful, you might need more but you have blown your budget out, and now you need to go upstream to order more. Microsoft is relatively flat still so this is possible. But you see the problem right, every project with it's own cluster, doesn't match the economies of scale that Google has built into their application. In fact each division instead is fighting for resources. There is some indication that the recent Windows re-org will attempt to address this problem. Initial indications are that Microsoft is attempting to blend the software and services to drive demand for the software. Once again they are failing to grasp the paradigm shift. That's another blog post.
Since Google has approached their system differently, each division gets to take advantage of the economies of scale in the platform. Adding additional machines adds makes everyone's application more robust. This means everyone enjoys a fundamentally robust platform to develop Google applications.
So what does this mean for Google's recent moves? Well let's imagine a Google set top box that has DVR functionality. Additionally this box operates as an additional node in the Google Network. All the dark fiber Google is purchasing allows them to delivery VOD (video on demand), telephony and HDTV with the greatest of ease. With the Google cluster of machines they can easily scale the VOD services without the tremendous expense that VOD start ups have typically have. In one fell swoop Google scales it's network, enters the home, and becomes the convergence of the typical internet and home entertainment. The killer feature driving adaption by the consumer of this brand new cable network? All on movies ever made on demand supported by the Google cluster. Google doesn't have own the end consumer either. They can partner with cable companies to provide them the platform. Google set top box is coming. Why else hire someone with set top box experience? Why hire if you aren't going into the home? VOD is solid match with Google's platform, namely the largest most powerful machine in the world. Most VOD business plans read like this. Buy 30 Million dollars worth of machines, sell services to the cable companies, hope burn rate doesn't kill us. Google is already in the wholesale business, namely wholesale search. They could easily roll out a VOD service as a wholesale service with "Powered by Google" as the slogan. Every new customer sold on the service would make Google computing platform that much more powerful (remember the economies of scale above). No single cable company could afford to build the computing platform that Google has built. It makes perfect sense for them to resell the platform.
Sounds too huge? Sounds too impossible? Remember Google has a history of nearly impossible things. When they announced 1GB of free email on April 1st, everyone thought it was a joke because it was a huge amount of space. Right now they offer nearly 3 GBs of free email space. That's more than 3 times the space in less 18 month. Only Yahoo has been able to respond with a half way competitive offering. Hotmail is still offering just 250 megs of email. Remarkably just two years ago 350 megs was unheard of in the free email space. Now it's just not competitive. Of course after the innovation it seems easily but some papers like the NY Times thought that much space would have an adverse effect on the search engine. Notice any Google outages lately?
Google is has built the world's largest computing platform. By extending that platform into the home through a set top box, they can offer features and killer applications that companies like Microsoft aren't even thinking about. By changing the paradigm, Google can not only rule the web, but also the digital home.
Technoratic Tags:
Microsoft
Tuesday, September 20, 2005
Open Document Standards
I have intentionally shyed away from blogging about the Katrina disaster so instead I have pulled back to look at recent trend in government. This trend away from closed document formats and towards open document standards. This has been typified by the recent moves by the State of Massachusetts recent adaption of the Open Doc standard for public information. A Microsoft blogger wrote a post about it and then immediately got shelled by the developer community. He got shelled for spouting silly nonsense like this.
Unless of course maximum interoperability is your goal. I notice this doesn't stop MS from supporting plain text formats, RTF, WordPerfect etc. In this case interoperability isn't the goal of Microsoft but rather customer lock in so supporting an open standard which would allow free transferability of files is to be avoided at all costs. Supporting the Open Doc standard allows Microsoft's customers to easily defect to a competing product (Open Office)
The adaption of the Open Doc Standard is only one in a large group of recent defections away from closed and proprietary file formats.
Internationally this seems to be spreading. I spent some time poking around the world to see what people and governments especially are up to with open standards documents.
*After the tsunami hit Thailand, the government found that information sharing was nearly impossible. Each NGO (non governmental entity) and branches of the Thai government used different data and document formats. The Thai government responded by creating a common website for registering missing persons and began making the move to open file formats.
*Denmark's E-business Initiative is creating a fully implemented, centralized, ordering and invoicing process based on open standards. Expected savings 160 Million Euros.
*Argentina's national tax agency implemented a project to allow access by agencies and enterprises to its unified taxpayer database. The model was based on W3C standards together with other well developed standards for security.
*Chile - The government will develop an electronic information exchange platform that will be web-based on top of open standards (XML for data exchange; SOAP and web service). Stage One will encompass the five largest public agencies. All agencies are to be eventually included.
*India is using open technologies to promote growth. The eBiz project will create a framework for providing hundreds of government to Business (G2B) services of federal, state and local agencies through a single portal.
*Sau Paulo Brazil - The state goverment implemented a web based system for inventory of all existing information technology assets. The system also track software licenses, ICT professionals and communication's resources across government.
*The Netherlands - It recently established a Standardization Council and Standardization forum to accelerate development and use of open standards. The Netherlands has had a explicit policy for support of open standards since 2003.
*European Union - The European Union's Interchange of Data between Administrations program has middleware solution based on a set of generic specifications for exchange, dissemination and collection of data. The eLink toolkit, one of the first implementations of the specification, has been based only on open source components.
*Japan - The Government of Japan has developed software procurement guidelinesthat dictate that open standards and open document formats shall be given priority in government procurement.
*Chile - The government has issued a decree setting an open XML standard as the digital document format across government. All public agencies and services are required to format documents in XML. They are currently rolling out a three stage deployment across all governmental entities.
*India - The goverhment is developing an online service for the 600,000 companies currently incorporated in the country. Online services will include: registration of companies, payment of statutory fees, filing of tax returns and charges.
*Denmark - The country's CareMobil project uses an open specification and generic business case for the use of mobile technologies in home care for the elderly.
And these I found with just a few hours work on the web. While the city of Frankfurt Germany abandoned their Open Office project, it's clear that other governments are forging ahead, realizing that in a networked environment, open standards and protocals can provide the maximum benefit. Open standards tend to be network robust, therefore less brittle than proprietary standards. Furthermore as the ecosystem expands, this will increase demand for open document standards.
"The Office applications are very large, and while most people only certain features, each person uses a different set, and in the end all features are used. Trying to lock out those documents and forcing people to lose data and functionality is not really a great idea."
Unless of course maximum interoperability is your goal. I notice this doesn't stop MS from supporting plain text formats, RTF, WordPerfect etc. In this case interoperability isn't the goal of Microsoft but rather customer lock in so supporting an open standard which would allow free transferability of files is to be avoided at all costs. Supporting the Open Doc standard allows Microsoft's customers to easily defect to a competing product (Open Office)
The adaption of the Open Doc Standard is only one in a large group of recent defections away from closed and proprietary file formats.
Internationally this seems to be spreading. I spent some time poking around the world to see what people and governments especially are up to with open standards documents.
*After the tsunami hit Thailand, the government found that information sharing was nearly impossible. Each NGO (non governmental entity) and branches of the Thai government used different data and document formats. The Thai government responded by creating a common website for registering missing persons and began making the move to open file formats.
*Denmark's E-business Initiative is creating a fully implemented, centralized, ordering and invoicing process based on open standards. Expected savings 160 Million Euros.
*Argentina's national tax agency implemented a project to allow access by agencies and enterprises to its unified taxpayer database. The model was based on W3C standards together with other well developed standards for security.
*Chile - The government will develop an electronic information exchange platform that will be web-based on top of open standards (XML for data exchange; SOAP and web service). Stage One will encompass the five largest public agencies. All agencies are to be eventually included.
*India is using open technologies to promote growth. The eBiz project will create a framework for providing hundreds of government to Business (G2B) services of federal, state and local agencies through a single portal.
*Sau Paulo Brazil - The state goverment implemented a web based system for inventory of all existing information technology assets. The system also track software licenses, ICT professionals and communication's resources across government.
*The Netherlands - It recently established a Standardization Council and Standardization forum to accelerate development and use of open standards. The Netherlands has had a explicit policy for support of open standards since 2003.
*European Union - The European Union's Interchange of Data between Administrations program has middleware solution based on a set of generic specifications for exchange, dissemination and collection of data. The eLink toolkit, one of the first implementations of the specification, has been based only on open source components.
*Japan - The Government of Japan has developed software procurement guidelinesthat dictate that open standards and open document formats shall be given priority in government procurement.
*Chile - The government has issued a decree setting an open XML standard as the digital document format across government. All public agencies and services are required to format documents in XML. They are currently rolling out a three stage deployment across all governmental entities.
*India - The goverhment is developing an online service for the 600,000 companies currently incorporated in the country. Online services will include: registration of companies, payment of statutory fees, filing of tax returns and charges.
*Denmark - The country's CareMobil project uses an open specification and generic business case for the use of mobile technologies in home care for the elderly.
And these I found with just a few hours work on the web. While the city of Frankfurt Germany abandoned their Open Office project, it's clear that other governments are forging ahead, realizing that in a networked environment, open standards and protocals can provide the maximum benefit. Open standards tend to be network robust, therefore less brittle than proprietary standards. Furthermore as the ecosystem expands, this will increase demand for open document standards.
Monday, September 12, 2005
How viruses may end the Office monopoly
One of the interesting side-effects of Microsoft's lack of focus on security is that it may end up accelerating the loss of their Office monopoly. The current primary vector for the spread of viruse is the email. How I miss the days when you got a virus by physically inserting a floppy disk into someone else's computer? It made getting a virus similar to getting a real STD. You knew you did something wrong. You took a floppy put it in SOMEONE else's computer, it got infected with something nasty and then you put it in your machine. Coitus Floppyius.
Well now since the vector has changed to email, how has this impacted Microsoft Office? Well initially we were passing Word documents, Excel spreadsheets etc. Well those are served as vector for viruses. While the documents themselves might not serve as a vector, attachments do. So sys admins have been screaming that you should not click on attachments from people you do not know. The message then became, "Do not click on attachments." As the next round of viruses came from someone you know since once a machine became infected, it immediately emailed everyone in the address book.
How does this impact the Office monopoly? Well since Office has a desktop focused design, (it's really designed for a single PC user and producing pretty documents). It's not really designed for highly distributed, highly networked workforces. Because of the rampant spread of viruses via attachements, people have been told not to open attachments. (This doesn't change the fact that SOMEHOW people are still doing it).
People however, still need to collaborate on document production, and actually do work. It's still possible to mail attachements back and forth. Sys admins can isolate and then run antiviral software on the stored attachments. In fact this sort of quarantine is quite common in today's IT environment.
Passing Word documents served as a reinforcing function for the Windows monopoly. Clearly passing documents around this way is not the ideal way to do this. A centralized document respository, with versioning built in is the way to go. In all fairness to Office, it can indeed do this in all Windows house. On the other hand a Wiki can do this just as well, is web based and easily accessible by a distributed workforce and is completely virus free.
In fact a number of companies such as Jotspot have arisen to offer a replacement. Wikis can offer collaboration without the painful process of sharing Office documents. While the current state of wikis doesn't really focus on presentation on the same way Word does, it does focus on collaboration to a much greater extent which is the high value portion of collaborative work.
By forcing users away from passing random documents around to a more centralized document repository, the door is opened for another paradigm of document prep and collaboration. A networked approach doesn't reinforce Office, it undermines it. Of course the guys behind Office might well realize the power of networked collaboration as they bought Groove Networks to provide that magic grail of secure, safe, P2P collaboration.
Technorati Tags:
Microsoft
Microsoft Office
Virus
Excel
Word
Office Monopoly
Well now since the vector has changed to email, how has this impacted Microsoft Office? Well initially we were passing Word documents, Excel spreadsheets etc. Well those are served as vector for viruses. While the documents themselves might not serve as a vector, attachments do. So sys admins have been screaming that you should not click on attachments from people you do not know. The message then became, "Do not click on attachments." As the next round of viruses came from someone you know since once a machine became infected, it immediately emailed everyone in the address book.
How does this impact the Office monopoly? Well since Office has a desktop focused design, (it's really designed for a single PC user and producing pretty documents). It's not really designed for highly distributed, highly networked workforces. Because of the rampant spread of viruses via attachements, people have been told not to open attachments. (This doesn't change the fact that SOMEHOW people are still doing it).
People however, still need to collaborate on document production, and actually do work. It's still possible to mail attachements back and forth. Sys admins can isolate and then run antiviral software on the stored attachments. In fact this sort of quarantine is quite common in today's IT environment.
Passing Word documents served as a reinforcing function for the Windows monopoly. Clearly passing documents around this way is not the ideal way to do this. A centralized document respository, with versioning built in is the way to go. In all fairness to Office, it can indeed do this in all Windows house. On the other hand a Wiki can do this just as well, is web based and easily accessible by a distributed workforce and is completely virus free.
In fact a number of companies such as Jotspot have arisen to offer a replacement. Wikis can offer collaboration without the painful process of sharing Office documents. While the current state of wikis doesn't really focus on presentation on the same way Word does, it does focus on collaboration to a much greater extent which is the high value portion of collaborative work.
By forcing users away from passing random documents around to a more centralized document repository, the door is opened for another paradigm of document prep and collaboration. A networked approach doesn't reinforce Office, it undermines it. Of course the guys behind Office might well realize the power of networked collaboration as they bought Groove Networks to provide that magic grail of secure, safe, P2P collaboration.
Technorati Tags:
Microsoft
Microsoft Office
Virus
Excel
Word
Office Monopoly
Monday, September 05, 2005
FLOSS Business Models
One of the constant themes since the free software movement has hit the mainstream is how the can you make a software business successful when you don't charge per se for your software. This is a nonsensical argument on several levels. First off the philosophy of the Free Software Movement doesn't prohibit you from selling your software! They only require that you make the program and it's source available. Strangely people make the rather silly assumption that by making your software available freely you will undercut demand for the commercial version (ie the one that costs money). This is one of the strangest calculations I have seen people make in regards to the free software movement. For example here's a telling quote from the open source section of Wikipedia
Yet there is no real explanation why this is often said, nor anything other than anecdotal evidence that it is true. Nothing prohibits the GPL model from selling individual licenses. When a corporation or individual purchase a piece of software they are not simply purchasing a single license, they are also purchasing access to support and the help desk and most importantly upgrades.
Software acquistion costs represent a tiny fraction of the cost of ownership of software. Most companies when purchasing a piece of software look at the after installation support and integration costs. They look at the support costs. They look at the help desk costs.
The above article seems to bemoan the relative lack of FLOSS companies operating in todays markets. But the challenges facing any FLOSS software company is no different than any closed source company. Indeed, it seems to me that starting a closed source software company is an inherently riskier proposition especially when chasing customers in today's markets. For example for a corporation to buy a piece of closed source software from a relatively new vendor is next to impossible as the risk that vendor will go out of business is far too high. Source code escrow will be required at least along with 2-3 years of financial data. Perhaps even a completion bond.
With an open source company may have these same challenges as well but availability of source code acts a risk mitigator for the CIO considering purchasing the software. Indeed if I were starting a new company and my market required selling to companies larger than 25 million in annual sales, I don't see how any approach other than an open source one gets you in the door. Getting source code out of escrow with a company in bankruptcy (a very real concern for any start-up company these days) is next to impossible.
The simple fact is that there is almost no difference between an FLOSS company and closed source company. They face the same challenges for adaption in the market. The FLOSS company has the advantage that they can use the open source nature of the company as a marketing tool to acquire customers, mitigate risks for their customers. Let's face it. Starting a software company is a risky proposition. Many of them are bound to fail. Being an open source software company just makes it easier to succeed.
Making money through traditional methods, such as sale of the use of individual copies and patent royalty payment, is more difficult and sometimes impractical with open-source software.
Yet there is no real explanation why this is often said, nor anything other than anecdotal evidence that it is true. Nothing prohibits the GPL model from selling individual licenses. When a corporation or individual purchase a piece of software they are not simply purchasing a single license, they are also purchasing access to support and the help desk and most importantly upgrades.
Software acquistion costs represent a tiny fraction of the cost of ownership of software. Most companies when purchasing a piece of software look at the after installation support and integration costs. They look at the support costs. They look at the help desk costs.
The above article seems to bemoan the relative lack of FLOSS companies operating in todays markets. But the challenges facing any FLOSS software company is no different than any closed source company. Indeed, it seems to me that starting a closed source software company is an inherently riskier proposition especially when chasing customers in today's markets. For example for a corporation to buy a piece of closed source software from a relatively new vendor is next to impossible as the risk that vendor will go out of business is far too high. Source code escrow will be required at least along with 2-3 years of financial data. Perhaps even a completion bond.
With an open source company may have these same challenges as well but availability of source code acts a risk mitigator for the CIO considering purchasing the software. Indeed if I were starting a new company and my market required selling to companies larger than 25 million in annual sales, I don't see how any approach other than an open source one gets you in the door. Getting source code out of escrow with a company in bankruptcy (a very real concern for any start-up company these days) is next to impossible.
The simple fact is that there is almost no difference between an FLOSS company and closed source company. They face the same challenges for adaption in the market. The FLOSS company has the advantage that they can use the open source nature of the company as a marketing tool to acquire customers, mitigate risks for their customers. Let's face it. Starting a software company is a risky proposition. Many of them are bound to fail. Being an open source software company just makes it easier to succeed.
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