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BLOG: Open source startups: Don't try to be Red Hat

Simon Phipps | Feb. 18, 2014
VCs are realising the next billion-dollar software company won't make money from software, but from what open source enables it to deliver.

In this world, people will "take" your code and use it. After all, that's the flexibility given to them by having an open source license. If you are controlling, toxic, and rule-bound — say, you require conformance to a specific social norm or completion of a legal agreement — chances are they won't send anything back to you. Rather, they will take your code the way you licensed it, and others will join them to build a living, growing community without you.

Ironically, the behaviors that VCs often demand of their "open source startups" could well drive away the very talent they need. The sort of VC thinking that expects a company to become the next Oracle is likely to put an upper bound on their growth. While some of the contributors in a community might be present for direct profit from the code, the community as a whole is actually a mesh of different participants, all with their own motivational models and all paying their own way to achieve them outside the context of the community.

Communities do not have business models — those are for businesses. If the motivational model of some participants involves business, that harms no one. But the community itself is about the liberty to align interests, not about the presence or absence of profit.

That's why the biggest new open source projects of recent years don't have a dominant company.Twitter's BootstrapFacebook's Open Compute, Square's Picasso, the OpenStack project -- each is powering a market in its own right. Each has a founding benefactor that's gaining hugely from the innovation and kudos the project is generating. None is measuring its success on a metric of becoming a billion-dollar software business.

I'd go further than Levine. It's not even "open source as a service" — the creation of platform businesses — that is at the maturity point of the open source phenomenon. The giant businesses of the future don't monetize open source; they monetize innovations made possible by open source. So the ambition to be Microsoft, Oracle, or even Red Hat is the wrong metric for success in open source. Rather, how many building blocks are you creating and influencing? How big a distributed R&D team is working for you? How many companies have a systems architecture that resonates with yours?

This, ultimately, is why the basic flexibility of open source — to use software for any purpose, to access and improve the source code and distribute and deploy any way you wish — is so fundamentally important. Limit those "four freedoms" in deference to your so-called business model and you're actually boxing in your opportunity and cutting it off from the future.

Source: InfoWorld


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