Archive for August 29th, 2008

Paul Kedrosky notices an impressive feat for Microsoft: for the first time in a long time, its stock has outperformed Google’s this week, this month, and this year.

Allowed, this is like calling Microsoft the sexiest nun in the convent, given how poor its performance has been, but it’…

Source:The Open Road

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The open-source dilemma

(Credit: Matt Asay)

At the Utah Open Source Conference yesterday I presented a dilemma. Briefly, the idea is that as open-source buyers grow comfortable with open source they will stop spending money on open source. This leads to tragedy of the commons-type problems and a difficulty in encouraging the creation of more open source.

I therefore asked the question, “Who will pay for open source in the future?” I (and the audience) suggested that the problem might resolve itself over time as enterprises come to recognize that their failure to replenish open-source communities with either cash or code might come to harm the code commons from which they derive increasing amounts of value. I also recommended that Eclipse, Mozilla, and other non-profit foundations provide an answer.

Lastly, I suggested that governments might get involved to shore up funding for open-source software development. As I noted, governments derive massive benefit from open source (and from IT spending, generally). Why not fund more of it?

Europe loves open source. Why not fund it?

(Credit: Matt Asay)

I didn’t, however, have a clear idea as to the right way for this to be done. France, as noted in InfoWorld recently, suggests a way, as does TechDirt, which recommends that military spending could create the next Silicon Valley (so why not an open-source Silicon Valley, given how much the US military is buying into open source?).

France, the second largest market for open source outside the United Says, does a range of things to promote open source, but its focus on open source for the rising generation is perhaps most important:

Source:The Open Road

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Facil, a Quebec-based open-source organization, has sued the Quebec provincial government for buying Microsoft software without considering open-source software, as CBC reports. The problem, it seems, is that Quebec has an “open markets” policy that it is supposed to follow. In practice, however, the Quebec government IT buyers have been …

Source:The Open Road

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Dave Rosenberg thought that this press release was a spoof on my affection for Red Hat. Yes, it’s true that I’m a fan of Red Hat’s - I think it does a lot of good for open source - but this goes too far…. :-)

I really …

Source:The Open Road

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Dennis Howlett writes a thought-provoking piece on proprietary maintenance revenue, challenging the value that software vendors provide or, rather, the generic way in which it is provided. Howlett proposes a way to customize maintenance fees to the actual value provided by a vendor:

In software terms, we already know that (differentiation for customers) happens through software implementation, configurations and customizations that are a core part of delivering to customer needs. There is no reason why the same principles can’t be applied to the maintenance element of the business relationship. If you stand back and put aside the notions of the last 30+ years, it is blindingly obvious.

It is obvious for example that in the early stages, customers will consume a considerable amount of resource(s) as they learn and become familiar with the product. They should therefore pay an economic price that reflects the services they consume. However, the software vendors need (to) do three things in order to soften the impact and reduce the long term burden…

I’ll leave it to you to read Howlett’s post to discover the three things, but even in the short blurb above Howlett unwittingly calls out a fundamental difficulty in open-source software revenue models, one that Savio Rodrigues has been banging on for a while, and one that NBC iVillage CTO Jon Williams has also called out:

Open-source vendors begin making money from their customer base precisely at the point that the customer base is least apt to renew.

Source:The Open Road

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