This is what I sent back to the coworker that emailed me that link today.
The article/editorial is nothing new; that's essentially what the open source model is… a development model. Not a business model. In order to make money using open source as a development model (which is - in my opinion - an excellent development model) one STILL has to have a good business model.
Depending on code or development itself to make you money is not only a non-viable business model… it's a stupid one.
Lots of people point at open source and ask "BUT HOW DO YOU MAKE MONEY GIVING YOUR PRODUCT AWAY FOR FREE?".
Those are people who are looking at the development model ONLY… and not understanding that there is a business model wrapped around that.
If you don't think money can be made peddling open source product, just take a look at Red Hat's earnings for last year:
http://www.redhat.com/about/news/prarchive/2007/fiscal.html From the link:
Non-GAAP operating cash flow, as detailed in the tables below, totaled $56.4 million for the quarter and $217.5 million for the full year. At year end, the company's total deferred revenue balance was $338.6 million, an increase of 52% on a year-over-year basis and 9% sequentially. Total cash, cash equivalents, and investments as of February 28, 2007 were $1.2 billion.
That's an awful lot of money for a product anyone can download for free over the web. Anyone that doesn't understand open source can make money isn't paying attention.
That said, there are of course limitations. There will never be an open source community version of Microsoft - a single company that takes over everything - and that's part of why the open source development model as a development model is attractive to small businesses. It levels the playing field and gives even the little guys the opportunity to make really great money without having to worry about a predatory monopolist skewing the market and screwing things up for everyone.
It sort of forces businesses to play nice with each other, all while creating a product that meets peoples' and businesses' needs. In my opinion, it's the way most software is going to be, in the future. There will always be proprietary software vendors out there, but open source is where things are heading, and that's not going to change no matter how much of a tantrum people throw over it.
Needless to say, companies like Microsoft are scared, and rightly so. They have a lot to fear from this development model, and even more to fear from the business models that companies like Red Hat are creating around it.
Adapt or die.
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