NoCoward's Journal: Why Open Source Does Not Work

The High Priests of the Bazaar

This paper presents a case against the open source movement and explains why the open source model does not work economically for the vast majority of those involved in the production of commercial software. There are several arguments against the OS (open source) model.

Open Source Doesn't Make Economic Sense For Most

The open source organization has presented a few cases that supposedly explain why OS works economically. However, if you examine the cases objectively you will find that the cases are flimsy and non-specific and do not address any specific concerns. They attempt to bolster their case by pointing out a few "successes", among which Caldera and Red Hat are displayed as shining examples.

The real economic question of the OS model is how is money made, and who is making the money. Who is being rewarded financially for the enormous development effort? The open source initiative claims that there are at least four different models that allow someone to reap rewards. Oddly, it is not mentioned that it is not necessarily the people who did the development work that gain financially.

The four primary business cases mentioned by OS proponents are "Selling Support", "Loss Leader", "Widget Frosting" and "Accessorizing."

The first case proposes that money can be made via selling support for the free software product. This is by far the strongest case and is proven to work, for a few small companies. The two companies that are shown as positive examples of this business model are Red Hat and Caldera, who distribute and support the Linux operating system. What is never mentioned is that neither of these two companies has contributed significantly in relative terms to the Linux development process. Its important to note that using this business model, the people that make the money are usually not the ones who have invested in the development process. So much for the strongest case.

The second case is based on the idea that you give away a product as open source so you can make money selling a closed source program. This also can work, but it should be noted that the money is being made off the closed source product and not off of the open source. An example of this model would be Netscape, who gives away the source code of their client browser so the OS community can do development, but keeps their "cash cow" products completely closed. Obviously, this case may only work if you have a software product that lends itself to this sort of "give away the razor and make money on the blades" system. The truth is that the vast majority of software is monolithic. So much for the loss leader case.

The third case, "Widget Frosting", sounds completely practical. The premise that hardware makers produce open source software so that the OS development community will work for free to produce better drivers and interface tools for their hardware products. It sounds great on the surface, especially for the company that produces the hardware: they get free drivers and do not have to pay for expensive developers. The OS community wins by getting presumably stable drivers and tools. What is not mentioned is the reason hardware makers usually don't do this is because they do not want to reveal trade secrets regarding their hardware design. Production of efficient drivers requires an intimate knowledge of the hardware the driver is for. It is almost always the case that it is in the hardware developers' best interest to keep their hardware secrets close to home. This also brings up the question of why isn't hardware "open"? So much for the frosting case.

The final case, "Accessorizing", is similar to the first, but throws in the idea of selling books and complete systems with the open source software, and other accessories as well. It is obvious that selling books qualifies as support, and that it really belongs in the first case. The idea of selling computer systems, T-Shirts, dolls, again begs the question: "Who is making the money?" As with the first case, it is not necessarily the people who have done the development work. Additionally, the question of how much money can be made selling books, t-shirts, mugs, etc, is never answered. O'Reilly Associates is frequently used as an example to be a company who has made money using this case. The reader should notice that O'Reilly Associates are not the people doing the development work. Indeed, it is never asked why all the O'Reilly books are not available for free or at least at manufacturing cost? This also brings up the question of why isn't book production "open"? Perhaps they are waiting to see if they could sell enough O'Reilly T-Shirts to pay their bills. So much for the accessories.

Open Source Does Not Necessarily Produce Better Software

The open source proponents frequently state that OS necessarily produces better software. This statement is made without any evidence. Indeed, there is evidence to the contrary. GCC is a standard compiler produced by the GNU organization. It lags its commercial counterparts in both efficiency and features. The reason behind is illustrates the largest weakness in the OS plan. It is very hard to convince qualified engineers that they should do such boring and unglamorous work without any sort of financial reward. The idea of throwing large quantities of people at the source does not work in this case, since there are not large quantities of qualified individuals available.

Open Source Did Not Make the Internet Successful

Another statement made by the OS community is that somehow open source was responsible for the success of the Internet. The reason behind this is probably a result of the confusion between what is open source and what is an open protocol. It is easy to see that the foundation of the Internet was built on open protocols. This does not equate to open source, for the two are quite different. The vast majority of the machines on the Internet run on closed source operating systems running mostly closed source software, which communicate using open protocols.

Where Does Open Source Work?

Open source does work in certain cases. A good example of where it may work well is Netscape. The act of giving away the source to the OS community so they can work for free and produce a product that helps the sales of their server software was a stroke of genius and proved very profitable for the relatively few at Netscape. But is this truly making money off of open source? Isn't the money is made off of the closed source software?

Another example of where it does work is the aforementioned Red Hat. Red Hat has been successful making money off of the work of thousands of others who have contributed to the Linux operating system and the associated GNU programs that have shipped with the Linux distributions. The question is: do those who work at Red Hat deserve to be rewarded, or do the people who do the actual development work deserve to be rewarded? Should the money go to the few, or to the many? It seems that the High Priests of the Bazaar believe the former.

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