Open source is bad for vendors
May 12, 2007 Leave a comment
I chaired an interesting meeting the other day. It was me against senior executives of Cisco, Agilent Technologies and Novell.
The subject was: Do enterprise users really want open source? Are you strongly supporting this?
Open source is not a movement; it’s a religion. It is a set of principles and practices that let everyone share nonexistent or semi-existent intellectual property. Remember the Communist Manifesto: “From each according to his ability, to each according to his need.” It is this generation’s Woodstock.
Back to my meeting. The vendors were tripping over themselves swearing allegiance to the open source movement. It was like Republicans genuflecting at the graven image of Ronald Reagan. And they were testifying that the Really Smart Enterprise Users (RSEU) were demanding, actually demanding, lots of solutions here. And each of them was going to be first in line.
Naturally, I disagreed — partially because I am a naturally disagreeable person. Any idiot can make friends — but can you make some really serious enemies? I disagreed, however, because allegiance to open source depends on who you are.
As you may have guessed, I disagree. Open Source isn’t a religion. While there a few vocal people who are near the brink of treating it that way, for the rest of us it was a much more pragmatic decision. This is a quote from the ZDNet post that led me to the original article:
Howard Anderson has a moan out today, complaining that open source is very, very bad for vendors.
He’s right. Vendors have trod the computing world like Kings for decades. Open source changes the market’s dynamics.
Open source reduces a vendor’s power in customer relationships. Open source also reduces a vendor’s hold on key employees, who can now walk out the door and continue working on what the vendor was selling.
That’s the idea of open source.
There are two sides in every market relationship, and the boss’s side is just one of them. Customers want to reduce the control vendors have over them, which in the computer business is enormous. Employees want to enhance their bargaining power, not just to make more money but to do work they like.
You see, the computer software business is maturing. Like almost all industries before it, that means major changes for the ecosystem. Vendors have had far too much control up to this point. It was inevitable that this had to change. It always does. That had nothing to do with Open Source per se. Open Source was just a catalyst for something that was going to happen anyway. Back to the pragmatic side, Open Source produces better software. It is also much better for the consumer. Does that mean it’s bad for the vendor? Not necessarily. If you were used to being able to collect monopoly rents or hold your consumers hostage, then it does mean you’ll have to change. But for those that do change, profitable times are still ahead.
Many people are still far too focused on the gratis part of “free” software. This seems to especially be the case for some enterprise users. You need to look at the value that a vendor provides. The fact that you may not be paying for artificially shinkwrapped bits does not mean you are getting a free ride. The value proposition has just changed. I forget how hard that is to understand sometimes. It’s something we need to make clearer. Many are doing well already, but I think very good times are ahead. For some.