RE: Tim's paradigm shift

Hi Matt,

Maybe open source is like organic food and means all things to all
people. (e.g. Tastes better, is healthier, saves the environment,
creates communities. etc.)

I do not see a need for one answer to the open source question.  In open
source I see a range.  On the one end are hobbyists building
applications (small and large) for their own pleasure and at the other
end are global services companies working on creating a standards based
infrastructure (IBM).

The hobbyists get to create something that creates value for their users
(not customers) and for them selves.  They get the pride of having
shared their software and the users get the benefits of the program and
a community in which they can participate.

IBM gets standard software, which enables their customers to buy their
products without feeling like they are locked into IBM.  

Who would want to be locked into a Novell Netware today?  If you were
you would depend on that vendor.  But being locked into Linux means you
are not beholden to any vendor.  From the customer perspective this
means better prices as suppliers will compete for your business.

When Tim talks about open source being a way to create value outside
creating a program this rings true to me.  There are millions of
programmers out there working to create programs and this will
inevitably drive the value of applications down.

Best Regards
http://www.sharewidth.com
Yonas
 

-----Original Message-----
From: Matt Asay [mailto:[email protected]] 
Sent: June 29, 2004 3:27 AM
To: [email protected]; [email protected]
Subject: Re: Tim's paradigm shift

WARNING:  LONG, POSSIBLY BORING READ.  PROCEED WITH CAUTION.

I'm glad Tim put this down on paper. I heard him give the presentation
at OSCON 2003 and at Open Source Business Conference 2004 - brilliant,
both times.

The problem I have with it today, just as I did then, is that it
provides little normative direction.  It essentially says things like,
"The way to succeed in the future is to build websites that everyone
uses, because massive participation is a great barrier to entry."  Fine.
 But how do I get there from here?

I suppose I should architect my software/service/site such that it
breeds add-ons, but this is no guarantee that anyone actually will
choose to add on.  In other words, good architecture doesn't in any way
ensure a good product/good sales/good IPO.  Maybe it makes these things
more likely, but I'm not convinced.  

And it doesn't explain why MySQL has been so successful.  They employ
100% of the code committers to MySQL - no architecture of participation
(unless you count QA, and that does count).  They're open source in some
different sense of the word than the purists would like to use, but it's
a sense that is bringing them dollars.  More on this below.

In trying to think through how companies can grow profitable while being
good open source citizens, I've been trying to figure out how to
leverage open source to get there from here.  To jumpstart the
brainwaves, I had breakfast with Larry Augustin a few weeks ago, where
we discussed an idea that has been percolating in my wee brain for some
time, and which is (mostly) captured in a recnet article I published. 
(See
http://management.itmanagersjournal.com/management/04/06/10/1932254.shtm
l?tid=85.)
 In it, I argue that open source has less to do with source development,
and more to do with open distribution.  That is, open source succeeds
because it drives down the costs of distribution, sales, marketing, and
QA, allowing its corporate adopters to undercut established players on
price, in true Clay Christensen fashion.  (The data underlying this
thought was that MySQL and JBoss employ most or all of the engineers
contributing code to their respective code bases.  Hence, they don't
really benefit (much) from a global development army of engineers.  The
benefit lies elsewhere, in distribution.)

So, while I gushed on and on about open distribution, Larry posed a
troubling question:  "If that's such a big deal, how is it any better
than simply giving the product away for free (no cost) over the
Internet?"  I didn't know, and still don't.  If few actually look at
source (and the fact is, very few end-customers actually do - Microsoft
pegs the number at 1% who expect to modify source if they had access,
and I've yet to see numbers or experience that widely differ from this,
especially since anyone modifying RHAT or NOVL source (or others) would
immediately violate their support contracts and be left stranded.  Few
Fortune 1000 companies are going to take that risk), then one is left
wondering what, other than low cost (as in acquisition cost), is driving
open source adoption by corporate customers.

If anyone has thoughts, I'd love to hear them.  Again, I like Tim's
ideas on this, and agree that "software" will increasingly migrate to
the web.  But this doesn't make it any clearer how to build a successful
business on the web or elsewhere.  It maybe tells me what a successful
company looks like when it's all grown up, but it gives me no practical
guidance on how to take one to that level.  (Frankly, if one takes eBay
and Amazon as marquee examples, as Tim does, it's perhaps even easier to
argue that they are successful because of their first, biggest mover
advantage, and not because of any architecture of participation that
only flowered much later.  Only Google may have immediately been better
because of its architecture, and that took a long time for people to
recognize and for them to capitalize on.)

Matt





  >>>Russell Nelson <[email protected]> 06/28 8:36 pm >>> We should be
talking about this, eh?  From: Tim O'Reilly <[email protected]> Date: June
26, 2004 12:57:30 PM EDT To: Dave Farber <[email protected]> Subject: The
open source paradigm shift  Dave, this may be of interest to your
readers.  I finally got around to writing up the talk I've been giving
for the past year or so, at locations as divergent as Red Hat and
Microsoft, about the way that the commoditization of software is driving
value up the stack to web apps, and how these apps leverage network
effects (and in particular what I've been calling "the architecture of
participation") as their key tool in gaining competitive advantage. I
also talk about how the "Intel Inside" positioning is being rediscovered
in various software niches, and how commodity software means that
assembly of custom Linux distributions (rather than added value) may be
a key competency. 
http://tim.oreilly.com/opensource/paradigmshift_0504.html     Tim
O'Reilly @ O'Reilly Media, Inc. 1005 Gravenstein Highway North,
Sebastopol, CA 95472 707 http://www.oreilly.com (company),
http://tim.oreilly.com (personal)   blog is at angry | The USA has
turned into a Crynwr sells support for free software | PGPok | people
that are afraid of 521 Pleasant Valley Rd. | +1 315 268 1925 voice |
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for nothing. GF