Bruce Perens analyzes the economic impact of the emergence, acceptance and spread of OSS. This is a must-read for IT professionals. In a very pragmatic (yet still passionate) way Mr. Perens dissects the software production process, the software industry, then after he has broken down the pieces of the puzzle, he puts them together and addresses global economic impact.
(Spoiler alert! Read the full article (new window) before preceding.)
In a nutshell the article takes the following statement which almost everyone would agree to…
Microsoft is a tool-maker, and the effect of the tool-maker on the economy is tiny next to the economic effect of all of the people who are enabled by the maker’s tools. The secondary economic effect caused by all of the people and businesses who use an enabling technology is greater than the primary economic effect of the dollars paid for that technology.
… and if the reader can believe that, they must recognize that the same can be said of Open Source software. It is tough to refute the impact Linux, Apache, and other notable F/OSS “tools”.
The section titled Enabling Technology vs. Business Differentiation illustrates that decision makers should treat software assets differently within their organization based on how much that software contributes directly to market differentiation of one’s organization. Dealing with every piece of software as a trade secret and worthy of copyrighting does not benefit the company when dealing with undifferentiating software. The key is to survey one’s technology stack and figure out which is differentiating and which is non-differentiating.
Perhaps 90% of the software in any business is non-differentiating. Much of it is referred to as infrastructure, the base upon which differentiating technology is built.
These are the commoditized products: the web server, the operating system, the database, the word processor. The parts of your software stack that bring value to the customer that should always be targeted for new licensing, upgrades, modifications, enhancements. The rest, you want to reduce risk and maintenance cycles on (remember they are commodities) so you can spend more resources on that 10% that your customer cares about. You really oughtn’t have to pay for the same word processor year after year. It’s just silly in the Emerging Economic Paradigm of Open Source (full title of Bruce’s article, although his title tag differs) to spend those resources on such a simple commodity. This does not mean do not pay attention to that 90%, it means you need to give it special attention up-front, and doing so will reduce your expenditures over time in those areas and help shift it towards the right areas of your software stack.
An important indicator of whether software is differentiating is whether or not your competitor can get the same software. Neither Microsoft software nor Linux and Open Source can help you differentiate your business for long, because they are available to everyone. They differentiate against each other, they just don’t differentiate your business.
This goes to the point of cost savings I have made before to colleagues. The money in Open Source is how much you can shift your technology costs and efforts toward other aspects of one’s business.
Thus, to make your business more desirable to customers, you should spend more on differentiating software that makes your business more desirable, and less on software that doesn’t differentiate your business. Open Source is the key to spending less on non-differentiators, by distributing cost and risk that was formerly your company’s alone across multiple collaborating companies.
Open Source is changing the industry and the world, some just haven’t realized it yet. The rest of us are enjoying witnessing the disruptive forces of the digital renaissance.