Open Source: Transformation of the Enterprise at Port 80: Boardwalk

I start a software company, swear the computer programmers to secrecy, direct and plan and manage them, compile their code to keep it hidden, and charge money for their result. My company's most valuable asset then is not the employees; it's the code.

This is the proprietary model and it is how we sometimes do things in a capitalistic society.

model B: open source

I write some source code and share it with others, who improve it and share their improvements with everyone, who then improve the improvements and share it with everyone. While this process goes on, one person coordinates the project and keeps the current official version of the software.

This is the open-source model and it is not how we often do such things in a capitalistic society.

how does it work?

Oddly enough, Model B can happen within Model A. The programmers sworn to protect the company's assets develop the software in an open manner among themselves. The programmers share. It's the folks who pay the programmers' salaries who need to keep the secrets as part of their responsibility to the stockholders.

It might help if you compare open source development to something that your classmates already understand: science. For the last 300 years, Western science has developed with as much transparency and openness as possible (given the limitations of the print medium and the difficult technical vocabulary of scientists). Scientists volunteered to check each other's work, to test and retest experimental conditions, to publish their data and analyses as widely as possible. The open source software development folks are doing the same thing.

why should you care?

It is commonly assumed that only fools give things away. Yet for a decade the Internet's mantra has been "Information wants to be free."

Everyone thinks that free means without direct payment that results in revenue for a company. Instead, it's something more radical: free in the sense of free speech. Free in the sense of openly developed and freely shared.

Your experiences with a desktop or laptop PC are largely proprietary, usually Microsoft or Oracle. Your experiences online depend on a mix of proprietary software and open-source software, such as HTTP and HTML. You'll often have a choice between them. Which will you choose?

The Twilight Zone

Presented for your consideration: a grim scenario of a world without free software ...

knock on the door

Do not confuse open source with lack of standards. Quite the opposite, as the Web Standards Project will show you.

When we speak of free software, we are referring to freedom, not price. Our General Public Licenses are designed to make sure that you have the freedom to distribute copies of free software (and charge for this service if you wish), that you receive source code or can get it if you want it, that you can change the software or use pieces of it in new free programs; and that you know you can do these things.

Linux is a cancer that attaches itself in an intellectual property sense to everything it touches.

Learn more

best bet - Eric Raymond

Who would have thought even five years ago that a world-class operating system could coalesce as if by magic out of part-time hacking by several thousand developers scattered all over the planet, connected only by the tenuous strands of the Internet?

Certainly not I. ... I also believed there was a certain critical complexity above which a more centralized, a priori approach was required. I believed that the most important software ... needed to be built like cathedrals, carefully crafted by individual wizards or small bands of mages working in splendid isolation, with no beta to be released before its time.

Linus Torvalds's style of development -- release early and often, delegate everything you can, be open to the point of promiscuity -- came as a surprise. No quiet, reverent cathedral-building here -- rather, the Linux community seemed to resemble a great babbling bazaar of differing agendas and approaches (aptly symbolized by the Linux archive sites, who'd take submissions from anyone) out of which a coherent and stable system could seemingly emerge only by a succession of miracles.

The fact that this bazaar style seemed to work, and work well, came as a distinct shock.

case studies

This paper analyzes the business case of open source software. It is intended to help Program Managers evaluate whether open source software and development methodologies are applicable to their technology programs. In the Executive Summary, the paper explains open source, describes its significance, compares open source to traditional commercial off-the-shelf (COTS) products, presents the military business case, shows the applicability of Linux to the military business case, analyzes the use of Linux, discusses anomalies, and provides considerations for military Program Managers. The paper also provides a history of Unix and Linux, presents a business case model, and analyzes the commercial business case of Linux.

Most studies of software evolution have been performed on systems developed within a single company using traditional management techniques. With the widespread availability of several large software systems that have been developed using an “open source” development approach, we now have a chance to examine these systems in detail, and see if their evolutionary narratives are significantly different from commercially developed systems. This paper summarizes our preliminary investigations into the evolution of the best known open source system: the Linux operating system
kernel. Because Linux is large (over two million lines of code in the most recent version) and because its development model is not as tightly planned and managed as most
industrial software processes, we had expected to find that Linux was growing more slowly as it got bigger and more complex. Instead, we have found that Linux has been growing at a super-linear rate for several years. In this paper, we explore the evolution of the Linux kernel both at the system level and within the major subsystems, and we discuss why we think Linux continues to exhibit such strong growth.

implications for management

Open source principles could potentially be applied to almost any intellectual endeavor, and may be a very important innovation toward harnessing global collaboration toward solving complex public policy and management problems. ...

Non-programming projects ... are beginning to apply open source or licensing principles in areas outside of programming.

articles

About twenty years ago Jobs and Wozniak, the founders of Apple, came up with the very strange idea of selling information processing machines for use in the home. The business took off, and its founders made a lot of money and received the credit they deserved for being daring visionaries.

But around the same time, Bill Gates and Paul Allen came up with an idea even stranger and more fantastical: selling computer operating systems. This was much weirder than the idea of Jobs and Wozniak. A computer at least had some sort of physical reality to it. It came in a box, you could open it up and plug it in and watch lights blink.

An operating system had no tangible incarnation at all. It arrived on a disk, of course, but the disk was, in effect, nothing more than the box that the operating system came in. The product itself was a very long string of ones and zeroes that, when properly installed and coddled, gave you the ability to manipulate other very long strings of ones and zeroes.

Even those few who actually understood what a computer operating system was were apt to think of it as a fantastically arcane engineering prodigy, like a breeder reactor or a U-2 spy plane, and not something that could ever be (in the parlance of high-tech) "productized."

Twenty years later, of course, Bill Gates is the richest person in the world. In November 1999, Harvey Blume reviewed Stephenson's essay in Revenge of the Wizards in The Atlantic.

According to Torvalds, it is not really fame and reputation. Contributing to the "cooking-pot market" of the Internet matters, which is why he doesn't care for shareware. Users are developers too, as they contribute implicitly. And while a passive user base could reduce developers' inclination to write free software, what counts most of all for the best programmers is the fun of programming - they're like artists.

In many cases, using open source software / free software is a reasonable or even superior approach to using their proprietary competition according to various measures. This paper examines market share, reliability, performance, scalability, security, and total cost of ownership. It also has sections on non-quantitative issues, unnecessary fears.

Software businesses traditionally protect their source code like family jewels. Companies claim they do this to guard their property. In fact, the real reason often is that the software is so bad it is embarrassing.

Lots of folks have suggested that the open source movement will negatively impact software companies by providing free versions of their products to consumers and companies. Some of the material even made one wonder if any software company would survive and whether software company employees should be looking for new careers!

However, I am glad to report that things are not as they seem.

Commercial software companies face many challenges in growing their business in today's fast-moving and competitive industry environment. Recently many people have proposed the use of an open-source development model as one possible way to address those challenges. This document investigates the business of commercial open-source software, including why a company might adopt an open-source model, how open-source licensing works, what business models might be usable for commercial open-source products, what special considerations apply to commercial products released as open source, and how various objections relating to open source might be answered. The target audience is commercial software and hardware companies and individual software developers considering some sort of open-source strategy or just curious about how such a strategy might work.

Governments around the world have found a new rallying cry--"Software libre!"--and Microsoft is working overtime to quell it.

Is Linux Catching the Big Mo?
by Kimberly Weisul
Business Week, November 26, 2001, p. 14 (not available online)

Amazon.com has told the SEC that it cut its quarterly tech budget by 24%, or $17 million, mostly by using Linux software. ... McDonald's said it will use Linux in 4,000 franchises. Royal Dutch/Shell will use it .... Pixar, DreamWorks, and other special-effects shops are embracing it, too. ... Over three years, some companies using Linux ... can cut costs by 50%, says International Data Corp. Vice President Dan Kusnetzky.

Launched in early 2001 at the request of the life science community. I3C’s mission is to coordinate disparate efforts around the world and to drive data and tool interoperability across the value chain (from academic research to target identification through validation, lead development and clinical) towards the goal of accelerating basic research, drug discovery, and development. This is to be accomplished through the establishment of common data exchange protocols that enable a wide range of software tools and packages to work together more effectively.

The desktop Linux market share is more like 1.7%, which is still up significantly from last year's IDC count. ...

The 1.7% figure accounts for "paid shipments only," which Dan readily admits may only include a small fraction of all desktop Linux installations. To begin with, he says IDC's research shows that for every 10 copies of Linux sold, approximately eight copies are downloaded from the Internet for free, and that there may be something like 15 copies made, on average, from each downloaded or purchased copy. ...

Exact numbers aside, Dan says Linux desktop users "are still a tiny minority" in the world. Windows is still the Big Dog, with around 94% of all paid desktop operating shipments in the last year. Dan says IDC's figures show Mac's percentage is down slightly -- from 4.17% last year to 3.9% this year, and that "all other" operating systems account for less than 2% of the desktop total.

Remember, all the "hard" numbers are for paid shipments only.

Industry Portrait

US Government

These activities were formerly classified throughout the existing national classifications. Traditional publishing is in manufacturing; broadcasting in communications; software production in business services; film production in amusement services; and so forth.

North American Industry Classification System (NAICS)

North American Product Classification System (NAPCS)

Hoovers

You'll have to click your way there after using your password to get access via the College library's Online Reference Sources. Click on Hoover's Online. You're looking for the list titled Computer Software & Services - Development Tools, Operating Systems & Utility Software

Companies that design, develop, market, and support operating systems, software development tools, and utility software.

Beyond Open Source

Open Source defines its product by the fact that software is visible. Free software is defined by the fact that the software is free. Public works means that a valuable service is being offered to the general public. Think New York City. We need Bloomingdales and Macy's (and indeed these are part of the New York community and do public projects such as the Macy's parade). But, New York also needs public works projects like Central Park, Lincoln Center, the library, and parkways. ...

We can wait for corporations to magically build our parks. Or, we can do what communities have always done: combine social capital with human labor and build ourselves the kind of global village we want to live in.

If the Internet is a bedroom community, a place we go to make our money and then exit after the gold rush, public works don't make any sense. If we plan on living with this infrastructure for a long time, it is time to start planning our infrastructure on a more systematic basis that allows people to build the parks, schools, libraries, and other public works that make our cities places that last.

Shareware

Shareware is a method of software distribution and marketing, and not a type of program. In fact, try-before-you-buy software has been discovered by traditional "shelfware" companies, and now, nearly every large software company provides some type of free trial version of their software. Some of those trial versions are shareware, and some aren't. Shareware, traditionally, is software that is published by authors who want you to help with their word-of-mouth advertising. It's more than a free trial; it's a free trial that you can share with your friends. When you find a product that does what you need, you'll buy the full version, usually directly from the author, and nearly always find that if you need product support, you'll get a fast answer from a programmer who worked on the product, and not some help-desk worker reading from a pre-programmed script.

Other programs were burdened with clumsy copy protection schemes. Here was a program that encouraged users to copy it.

Other programs were high priced. Here was one that modestly suggested a small payment.

Other programs had to be purchased before being tried out. Here was one that could be tried out extensively before the purchase.

Other programs were sold from retail stores. Here was a radical new marketing idea ...

Freeware

Download thousands of free software programs for Windows 3x/9x/NT/2K/XP. Games, Utilities, Desktop, Mp3/Multimedia, Internet, Programming, and more!

Daily news of freeware updates, Program of the Month, Freeware links, Free Software, Shareware links, Free Downloads, Free Web Space, Free Top Sites, Free Stuff Sites, Free Stuff, Webmaster Sites, Graphics Sites, Gamimg Sites, Free Games

Freeware Web - Your Source to Freeware on the Web. Tons of freeware, reviews, tips, a FREE newsletter and more!

FreewarePalm: the one and only site for downloading freeware files for PalmOS handhelds.

FreewarePalm is the #1 internet resource and portal for 3Com Palm Pilot freeware and software applications. FreewarePalm has the most extensive archive of freeware applications found anywhere.

What about Microsoft?

In February 2001, Microsoft's Windows OS chief James Allchin told the Bloomberg wire service:

"I'm an American, I believe in the American Way. I worry if the government encourages open source, and I don't think we've done enough education of policymakers to understand the threat."

Red Hat founder Bob Young isn't sure Red Hat and Microsoft are even in the same business.

If we do not own intellectual property the way almost all of today's software companies do, and if those companies insist that their most valuable asset is the intellectual property represented by the source code to the software they own, then it is safe to say that Red Hat is not in the Software Business. Red Hat is not licensing intellectual property over which it has ownership. That's not the economic model that will support our customers, staff, and shareholders. So the question became: What business are we in?

Linux vs Windows

Microsoft has confirmed it sees the open-source software movement as a threat to its commercial business model, in a quarterly report filed with the U.S. Securities and Exchange Commission (SEC).

The statement, appearing for the second quarter running, amplifies comments by Microsoft Chief Financial Officer John Connors recently about the threat of Linux to Microsoft's server business.

"The popularization of the open-source movement continues to pose a significant challenge to the company's business model. ... The company's revenues would be unfavorably impacted if customers reduce their purchases of new software products or upgrades to existing products because new product offerings are not perceived as adding significant new functionality or other value to prospective purchasers."

Not surprisingly, Microsoft also asserted its belief that "the commercial software development model offers superior consumer value compared to the open source model" because of its "powerful incentives to develop innovative software that is useful, reliable, and compatible with other software and hardware."

The Client division, which includes Windows operating systems products for desktop and notebook PCs, generated operating income of $2.48 billion on revenue of $2.89 billion, making it the most profitable segment.

"I'm not surprised at these results," said Kim Caughey, an equity research analyst at Parker/Hunter, in Pittsburgh. "We all had a gut feeling that the Windows businesses, and specifically the client OS and the Office products, were funding a lot of these new businesses."

Linux is a cancer that attaches itself in an intellectual property sense to everything it touches.

In response, Matthew J. Szulik, CEO of Red Hat, contends that Microsoft is On the Wrong Side of History. For some context:

Misunderstanding over `open source' yields good exchange (no longer available online)
by Dan Gillmor
San Jose Mercury News, February 21, 2001

The GPL is specifically designed to prevent commercial interests from co-opting free software and turning it into proprietary products. It's also designed to propagate itself in new products. Here's some key language from paragraph 2b: ``You must cause any work that you distribute or publish, that in whole or in part contains or is derived from the Program or any part thereof, to be licensed as a whole at no charge to all third parties under the terms of this License.'' ...

Microsoft's Allchin said the GPL is a deterrent to private innovation, ... a wrecker of intellectual property.

"When you go into Brazil and Mexico you see students embracing open source because of affordability and access. These markets could not be reached (otherwise)."

Szulik points out that it's worked remarkably well: Much of the software -- including Web servers, editors, shells, and languages like C and Perl -- that keeps the Internet alive is GPL-ware. "Linux is the No. 2 server operating system in the world right now," he says. "The data validate that conclusion."

"I think reducing it to the 'American way' is kind of like the NAFTA argument: It's counterintuitive," Szulik says. "You can't say you're going to compete on a global basis and retreat (into such rhetoric). Imagine what people in Japan, Asia and Germany thought when they heard that comment."

There's a letter circulating, purportedly from Peruvian Congressman David Villanueva Nuñez to Microsoft Peru, which cuts the heart out of Redmond's chief 'panic points' to chill those considering open-source migration.

Apparently, the Peruvian government is considering a bill mandating open-source software for all public bureaux. From the congressman's letter, we gather that MicroSoft had circulated a FUD communiqué calculated to frighten world + dog with images of collapsing domestic software markets, spiraling costs and systems migration nightmares. Villanueva Nuñez slices and dices with great skill to reveal the internal inconsistencies, unsupportable claims and irrational conclusions which the MS flacks trade in.

The letter provides the most thoughtful and thorough rebuttal we've ever seen to Microsoft's standard open-source terror boilerplate.


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Open Source

Where software users meet

Overview

How should software develop?

model A: proprietary

model B: open source

how does it work?

why should you care?

knock on the door

Learn more

best bet - Eric Raymond

case studies

implications for management

articles

Industry Portrait

US Government

North American Industry Classification System (NAICS)

North American Product Classification System (NAPCS)

Hoovers

Beyond Open Source

Shareware

Freeware

What about Microsoft?

Linux vs Windows