Wednesday, April 05, 2006

The 57 flavors of Open Source business models

Last month I wrote that open source isn't a monolith ... it's different things to different people. With this framework in mind, it was interesting to hear THE open source business model practitioners discuss the topic on a panel at Linux World. Included were Marten Mickos from MySQL, John Roberts from SugarCRM, Marc Fleury from JBoss and Peter Levine from Zensource.

Each of the CEO's had a different view about the key driver in an open source business model; some were focused on the increased quality assurance in the development cycle while others were focused on the distribution aspects. I had the sense that these open source companies have more elements of a traditional business model than one would first guess.

It's too early to draw any broad conclusions from the few open source business models that exist. Given the variations in their focus, though, it's clear that open source isn't a cookie cutter business model that can be wrapped around any business. As for the threat to enterprise business models? It looks like a slow death. The panel had a general belief that the Open Source business model would squeeze traditional software companies, but within some debated 5-50 year time frame.

At the end of the discussion Peter Levine said something along the lines of, "You don't invest in something because it's Open Source. You invest in it because it provides a valuable service." That is the takeaway - Open source is only important to the extent that it provides things of value to a customer & company such as low cost, adaptability, speed to innovation, etc.

note: my post was from the viewpoint of a capitalist. Things get interesting when you consider groups that deploy Open Source in its "purest" form, as a means of production without a business model but instead to fill some communal need.

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