The CTO Project

A couple of people have asked me how open source companies can make money. Sometimes there’s a suspicious tone in their voice, as if the concept of folks just “giving it away” is sort of sketchy, promiscuous, slutty, if you will. When you start looking for explanations about the economy behind this phenomenon, you find articles on the “new economy” or stuff about “collective good,” which adds a sort of communist note to the already “too easy” picture.

So here’s my new explanation: software is a service; it is not a manufactured good. Okay, sure, there is some actual code that some underpaid and unappreciated soul hacked out at some point (thanks, geek!), but after the code hits the market, it has very little value. The value of the software, once purchased, is the cost it would take to switch from it. Bruce Schneier has a nice podcast about this, among other things.

So, given that the actual good has little value, but what we do with it has a lot of value, e.g. installing, migrating, developing, training, using, we see that the services around software are much more valuable than the thing itself. And so companies that compete well in the service arena will be more successful in the long term than companies which view their manufactured code as their primary product because the service-oriented companies aren’t wasting time on the stuff that has the smallest value. This is why open source companies are making money.

Of course, Microsoft wants to pwn it all–the software, the service, the updates, the data itself. If open source software is a cheap good time, then Microsoft is the high-price date who steals your car and takes off while you think she’s in the bathroom refreshing her lipstick. Then, you hitch back to your sad apartment and find she’s moved in and is now acting as if nothing ever happened. And you kind of like it that she’s there…I mean, it’s better than being alone, right? Right? Sure. Keep telling yourself that, you scared shell of a human being. Everything’s going to be all right… you like this, right? Sure you do. And then you see a cute Apple and you ever so briefly think Wow! That’s sure fine looking, man…that’s something else! But do you do anything? No. You’re such a broken shadow that you feel completely unworthy and so instead you just keep on keepin’ on while all the time you hear that cute Apple song in the place next door and the guy above you, the one bringing home a different piece of software every night, is making way too much noise and you just know he should probably shower a lot more, or is broke, or something. Sure, sure, sure he is.

What was I talking about?

Oh yeah. So, perhaps I have this all wrong. I just wish I didn’t have to keep explaining why open source software isn’t silly, or insecure, or a bad business decision. I need to have more patience with folks’ confusion because I need to get campus leaders on my side, so I have to make the business case. But shouldn’t it be obvious? I guess not.