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O'Reilly on the Commoditization of Software 285

Iorek writes "International Data Group/Sverige has a great interview with Tim O'Reilly, CEO of O'Reilly & Associates Inc. From predictions of eBay's purchase of Oracle to discussions of the failings of open source licenses, O'Reilly's certainly not reserved. I couldn't help but be reminded of the rise of this site and slashcode."
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O'Reilly on the Commoditization of Software

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  • by saitoh ( 589746 ) on Friday July 04, 2003 @11:47PM (#6370719) Homepage
    The best/greatest standing part about open source isnt GNOME or KDE, or that we all have free speach software, its what we are DOING with that software. Amazon is built on perl, and look what it has accomplished.

    Later in the artical he comments on Debian, and how the creator and his company Progeny dont view linux as a product, but "a set of commodity software components he can put together for different purposes."

    What he's getting at is that if the OSS community wanted to push forward, you need an idea and then use linux as the tools for that idea, suhc as automated backup, or something snazy like amazon (where it is a tool, and not the product). Trying to market it as a free desktop platform (in which case linux is the product) just wont cut it. I've done projects for my university, and its worked before, and it will work again.

    Disclaimer: Do I beleive that linux cant be a product? No, I'm just saying that *ONE OF* (and not limited to) the best ways is to use it as a tool, not a product.

  • by dreadlord76 ( 562584 ) on Friday July 04, 2003 @11:56PM (#6370756)
    I just finished attending a Molecular Biology Training class, and I couldn't help drawing parallels between Open Source and the public Research that is on-going, such as the Human Genome Project.

    Like open source software, public research labs publish the data they found, such as mouse or yeast genome, into the public domain (Humor me, I know that Open Source is not public domain, but it's darn close in terms of availability and cost). In addition, when a lab creates a new genomic library, they are supposed to make it available to anyone who asks. Sounds a lot like Open Source.

    However, privately funded research usually do not have such policy, and use patents, trade secrets, and Copyrights to protect the IP. This has some effect in slowly down advancement in science in many ways. Such research also lead to imporant, and profitable advances for the companies involved.

    But, due to limited public funding, not all worthwhile projects are funded in a timely fashion. A grant request to the NIH may take years before approved. A private company, seizing an oppertunity, may choose to invest and jump start a new field of research.

    It seems that both models can co exist, and maybe it's time to have a publicly funded, or even an industry funded, organization, the supports Open Source development. The group should focus on open standards, common tools and platforms, and anything else someone can make a good case for. Something that will advance our knowledge, and make life easier. Something that we all cooperate on, rather than having blackmails or mighty pissing contests.

    Maybe we should begin to treat Computer Science like Science, and really advance it methodically, rather than "My code is faster than your code..."
  • by astrashe ( 7452 ) * on Saturday July 05, 2003 @12:01AM (#6370773) Journal
    I think that a lot of the dyanamics he's talking about hold true -- obviously, O'Reilley is a very smart guy.

    But it seems to me that he's looking at service industries, and calling them software companies. In order to do that, he has to change the definition of a software company, and as a result he's able to announce this as a shift in the software industry.

    My problem with what he says is mostly aesthetic. It's that same old silicon valley rich guy entrepeneur guru bs.

    He's making a lot of points that most people know -- web applications are more exciting, in many respects, than desktop applications now. Web applications are being built out of commodity pieces. The data in eBay and the customer good will is worth more than the code. All of those are good points, if not exactly earth shaking.

    But the way he's stiched them together is mostly a semantic trick, and he's out there like he's been given stone tablets on some moutaintop.

    It's not evil or anything, just a little icky.

  • by LibertineR ( 591918 ) on Saturday July 05, 2003 @12:30AM (#6370849)
    For at least the last 5 years, Microsoft has understood that nobody buys 'Windows or Office or Exchange'. Corporation buy Networking, Information Management and Messaging instead, and the winners are those who provide the TOOLS for these business missions better than the next guy.

    Linux vs Windows was never the proper battle, it was always a battle over what you DO with these things, and how you do them more effieciently than the other guy. Lots of companies NEED something like Exchange, so they by an Active Directory and Windows by default, and so on and so on.

    O'Reilly is dead on right. All this shit is just commodity for the applications built upon it that actually generate income. Superiority of one platform over another is a moot point. No one decides to buy a book at Amazon because of Linux, instead of Barnes and Noble because they run on IIS, so get over it.

    Windows against Linux is now like Goodyear versus Michelin. Who gives a shit? Only tire makers, not CAR makers. So, it is time to focus on building shit that rides on these things, instead of so much focus on the things themselves. No side has an advantage right now, but that could change overnight. Suppose Microsoft buys Amazon, or EBay buys Oracle? Same players, whole new battle, and all this crap over which OS is better doesnt mean a thing.

    What if Microsoft buys Macromedia; takes Flash and does interesting remoting stuff with Web Services tied only to .NET? What is the competing solution from IBM going to look like?

    I've got no answers, but I agree with O'Reilly that things are going to get very interesting over the next few years, and things are never going to be the same.

  • Hmmm.... (Score:5, Insightful)

    by Delphix ( 571159 ) * on Saturday July 05, 2003 @12:36AM (#6370868)
    Having read the article twice I'm not qutie sure I get O'Reilly's point.

    What he's saying is correct, but it's not exactly earthshattering in anyway. Amazon puts together some services that rock. They patent them. And then they sell the service to others. That just seems logical.

    How that ties into driving Open Source I'm not sure. If they're only devleoping proprietary things (services) on top of an open source backbone, they're not really driving Open Source devlopment. Just because I compile my program with gcc or use a perl script doesn't mean I'm driving open source development in anyway. They're just using it as the foundation to build on.

    Open Source is by definition controlled by anyone who wants it to be. Maybe I'm missing something here, but it seems like he's just stating the obvious and it has little to do with Open Source.
  • Economic drivers (Score:5, Insightful)

    by Pettifogger ( 651170 ) on Saturday July 05, 2003 @12:48AM (#6370900)
    What O'Reilly has to say is pretty much on target, but I'm not sure if open source will be entirely subsumed by corporations looking to profit. Perhaps for industrial applications, but not on the home level.

    What's going to happen on the home level is what's already happened to the hardware market. Everyone is looking for the lowest price. When the PC first came out, a lot of people were concerned about the brand/reputation, et al., and were willing to pay a premium for an AT&T, IBM, or other high-line product. That's where the software market is right now. The high-end hardware makers got slaughtered by price. And now the high-end software market is about to get slaughtered. Microsoft (and lots of others) are going to have to compete against the software equivalent of incredibly cheap clone hardware... and they are going to lose.

  • Yes, But... (Score:5, Insightful)

    by LibertineR ( 591918 ) on Saturday July 05, 2003 @12:53AM (#6370916)
    True that the market for Developers(the new mechanics) will shrink. But other markets for those skills will open up, as long as developers keep a business focus to what they do. There is nothing left to innovate in software itself, but much to innovate in the use and application of same to solve or streamline a business process or customer's service.

    I'm happy for the change, so we can get over these stupid platform wars, and focus on things that actually do something besides send bits back and forth. Now we get to focus more on the value of those bits, and I think that is a good thing.

  • I disagree (Score:4, Insightful)

    by poptones ( 653660 ) on Saturday July 05, 2003 @12:57AM (#6370927) Journal
    I don't think he was saying they were failures at all. And I'm pretty sure the reason he didn't offer "solutions or alternatives" is because there are none - and there need be none. To "fix" this (were it broken) would set a precedent pretty much like the one so many of us lambasted corporations for a decade ago - that is, if you use our tools to create a product then you have to abide by our terms, including paying us a license to distribute code made with our compiler. I mean, wasn't this one of the driving forces behind making new compilers and a new OS? One that would be free of this stuff?

    Amazon and all the others are free to build and deploy using the same tools everyone else uses, and playing by the same rules. They are not to blame for being successful enough that their data being manipulated by those tools is more valuable than someone elses. Or for having the money and foresight to employ programmers to use those tools to create new tools for the company's own personal use.

    There's nothing to "fix" here because nothing is broken. Should you have to license hammers from Black & Decker because you build houses for a living?

  • by Delphix ( 571159 ) * on Saturday July 05, 2003 @01:01AM (#6370936)
    I think a good example of this is Mac OS X.

    Apple used FreeBSD as the platform on which to build the Mac OS X. However O'Reilly is right on in this case. Besides the modifications to the core kernal / toolset the Open Source community doesn't get much back.

    It's not so much a case of them not distributing, but they don't distribute anything that was originally open source other than the core OS. Aqua, Quartz, Carbon, the Classic Environment and all the great apps (iTunes, Safari, iMovie, iPhoto, iDVD, etc, etc) are all proprietary.

    So Apple gets the core of their OS devleoped for them by Open Source community. I'm not saying they don't give back, but they do get quite a bit out of the deal. And get to sell their software (&hardware) to boot.

    In the end I guess Open Source is just a two edge sword.
  • by mikeophile ( 647318 ) on Saturday July 05, 2003 @01:08AM (#6370957)
    I'm not sure what kind of point you're trying to make, but making a living in my basement home office coding applications while high sounds a lot better than writing TPS workflow scripts for a faceless corporation in a partitioned rat maze.
  • by Anonymous Coward on Saturday July 05, 2003 @01:22AM (#6370994)
    Few people seem to realize how much a post can be spruced up with judicious use of bold and italics.
  • by that _evil _gleek ( 598545 ) on Saturday July 05, 2003 @01:33AM (#6371024)
    O'Reilly is WRONG about the license thing. He seems to think it was an oversight, or mistake, that allowed Amazon, Google, etc to work the way they do. As IF.
    It was no oversight at all. It was design. Seems liked he's been believing OpenSource as described by its opponents, like it's communism or something, as opposed to what it is. Those are successes, not failures!
    Actually, I'm a little surprised -- I mean where is that on the 5 stages of understanding the GPL? ("OH its NOT communism, it /is/ possible to make money with it"). I think I was there for like 5 minutes sometime in '96.

    Plenty of companies have been screwed by not getting the source, and getting straight-jacketed into dealing w/ only 1 company.. not just individuals. I see that as the point of opensource, take away the power to abuse that the software industry has, but not to be anti-industry in general. More of a return to the pleasant past, before PC's tookover.
  • by Feztaa ( 633745 ) on Saturday July 05, 2003 @01:41AM (#6371051) Homepage
    it's time to have a publicly funded, or even an industry funded, organization, the supports Open Source development.

    We have that, and they call themselves "International Business Machines." As I understand it, they sell so-called "business solutions" based on Linux, and they bankroll some of the kernel developers. In fact, from what I can tell, it's fairly common (sort of) to see companies who use Linux in some way and fund people to develop it for them (Hans Reiser is probably the best example of this). I would say that those kinds of people are living the dream, so to speak :)

    There's also the OSDL, where Torvalds now works. I don't know much about them, though; sounds sort of like a company who pays people to develop linux and then makes money doing... something?
  • by Anonymous Coward on Saturday July 05, 2003 @01:44AM (#6371060)
    Safari? Ever heard of KHTML?
  • by mindstrm ( 20013 ) on Saturday July 05, 2003 @02:02AM (#6371109)
    regarding an open source gui...

    (agree with everything you said, btw)

    As a long time hardcore technical guy, and let me back that up by saying I'm a unix nut, I've been using linux heavily for 10 years now, solaris before that, and I get right into the guts.. I like assembly, circuit boards, and whatnot. I like a command prompt and I don't like microsoft.... anyway....
    as a hardcore technical guy, open source liker, and a recent convert to OS-X... the comment about a gui got me thinking.

    I like open source. I like open everything. I don't like being told what to do with my computer. Yet, I LOVE OSX, and I recognize that the one strength MacOS really has is that apple controls the desktop. It's not that you can't skin it, ,or change it's behavior.. but, in general, it's built to behave a certain way, and you can go around to macs everywhere, and the machine behave the way you expect them to. The developer knows what the user expects, and doesn't have to account for a dozen different ways to interface with things. More importantly, he has somewhre to start.. look how many windows applications have varied interfaces. To really understand this, in case anyone is doubting it, just sit down with a fresh mac and mac user for a few hours and learn how to install software, work with files, etc... you'll get it.

    So.. we want an open source gui. Here's the thing... the only reason the mac has the "world class gui" feel to it is BECAUSE of a certain lack of openness.. we're talking about a benevolent dictator here. Apple developers know what to expect on the desktop, know how the mac user expects it to behave... and that's the main attraction. If you don't want that, you might as well go use linux.

    Yes, we can do stuff in linux that OSX can't do. Yes, open is good, no argument here...I'm just tossing out the thought that, when it comes to providing a rock solid user experience, for a general purpose computer... a lack of choice is sometimes what's needed.. to get people thinking and doing the same thing.
    You can sit someone down and show them windows -vs- mac.. and invariably, the mac people get more done, and are more comfortable with their gui.. and it's not because one is more customizable, or more flexible.. in fact it's the opposite.
  • by thegoldenear ( 323630 ) on Saturday July 05, 2003 @02:17AM (#6371152) Homepage
    and conversly I've met plenty of people who will use GNU/Linux precisely because for them it is an effective work around to the problem of the domination of capitalist software. its not just in OSS' image, its in its reality aswell
  • by cant_get_a_good_nick ( 172131 ) on Saturday July 05, 2003 @02:22AM (#6371160)
    ...Apple. Look at what Apple did with OS X. Apple took an Open Source OS and pinned it up with a proprietary front-end. The system benefits from all of the Open Source advancements in hardware control, while at the same time, the user has all the benefits of a modern, easy-to-use interface.

    The FreeBSD folks get some benefit as well. Besides having another big company using their code, testing it (and supplying patches) they kind of avoid the tug of war that part of Linux is going through - the whole "is it for geeks or the masses?" The coders who are good at one tend not to be as good in the other. So the FreeBSD coders can concentrate on the lower level bits, and have the Apple folks worry about getting the real fancy GUI on top of it.
  • by yuvtob ( 533399 ) on Saturday July 05, 2003 @02:32AM (#6371183)
    I think O'Reilly is right, but it points to a very disturbing trend, especially if you are someone who makes a living writing code.

    That was my first thought as well - will someone like me who wants to be the 'Chef' will be reduced to a person selling rice by the ton ?

    However, I realized that the 'coders' workplace will be one of two:
    1. Traditional software companies: until ASPs really catch on, although people will use more open-source software (like the google/yahoo/amazon exmples), the software that will sell more will still be taht traditional software making companies (like Microsoft). The fact that everybody is using air, doesn't mean that the the guys making the air ballons for divers doesn't exist - in fact, you could say they own 99% of the air market.
    But, in case that ASPs do catch on -

    2. The ASP companies will need us coders, and for us it doesn't really matter if we are coding for Windows or for a browser. And as for the creating-products-from-existing-components argument - we do it all the time...
  • by Arandir ( 19206 ) on Saturday July 05, 2003 @02:39AM (#6371202) Homepage Journal
    First, Apple has given back to every Open Source project it's borrowed from. The two main examples are FreeBSD and KDE. Why aren't they giving back Aqua? Because they didn't borrow Aqua from the community!

    Second, according to the Tim philosophy of Open Source, Apple is the equivalent of Compaq. It's taking commodity software and "improving" it with proprietary additions. This works great (it worked great for Compaq), but eventually the paradigm shift will occur, and people are going to say "why am I paying proprietary prices for what should be commodity goods?"
  • Re:Yes, But... (Score:5, Insightful)

    by GrayArea ( 69302 ) * < minus bsd> on Saturday July 05, 2003 @03:00AM (#6371288) Homepage
    There is nothing left to innovate in software itself...

    Nothing left to innovate in software? We've been at this for, let me see, about thirty years now, and you think we've done all that can be done? That sounds like saying we've seen the end of history. I'd say we'll be seeing a whole lot of different ways to build software, and fifty years from now, people won't even notice that's what they are doing. Just look at them using spreadsheets today.

  • by Ogerman ( 136333 ) on Saturday July 05, 2003 @03:01AM (#6371297)
    My problem with what he says is mostly aesthetic. It's that same old silicon valley rich guy entrepeneur guru bs. He's making a lot of points that most people know -- web applications are more exciting, in many respects, than desktop applications now. Web applications are being built out of commodity pieces. The data in eBay and the customer good will is worth more than the code. All of those are good points, if not exactly earth shaking.

    I think you're right on. In the buzz that Mr. O'Reilly is caught up in, it's easy to forget that that vast majority of computer users spend their days in MS Office, MS Outlook/Exchange, and XYZ customized core business application used by their workplace -- NOT Amazon and Ebay. Ordinary boring business applications are where the Open Source movement has enormous room to grow and conquer. While the core software 'stack' (OS,GUI,etc.) may be commoditized by this point, the rest isn't.

    It is not uncommon for a medium sized business to spend literally millions USD on software licenses. Part of that is the M$ tax (OS, Servers, Office) and the other part is custom software that only runs on M$ platforms (accounting, ERP/CRM, etc.) Then, tack on all the support / training services needed to keep said software working. If anyone thinks there's no room for Open Source on the business desktop, they're pretty blind to reality. The issue is more how to coordinate developer-consultants such that they can collectively meet needs of their clients. (ie. free software / non-free services & customization)

    But is there a market for an alternative? I challenge anyone who doesn't believe so to investigate what ordinary businesses are currently paying out for their IT needs -- both software licenses and services related.

    Bad economy or not, there is always a market for better product at a better price. We don't need more eBay's and Amazon's; we need more Open Source entrepreneurs.
  • by cruachan ( 113813 ) on Saturday July 05, 2003 @03:42AM (#6371403)
    No, I don't think you've any reason to worry. I've seen something similar before - it never works.

    Back in the late 80's/early 90's there was a real buzz about software that would write software. It came in many different forms - Oracle had SSADM software that would generate applications once you put the system design as high level description, various IBM mainframe systems that would generate CICS systems from bolt-together components (very like O'Reilly dicusses in fact) - there was even a PC system called 'the last one' which was supposed to generate any application you needed from a high-level description. All of them had the common theme that you were going to need no, or many fewer, coders.

    That didn't happen.

    The flaw in the argument is assuming the whole world is predicatable and regular enough that solutions can be build from a set of predefined blocks. In practice this never happens because
    1. All business and business processes are *always* much more messy than this
    2. There's always something else to be done - any business system is a compromise between what can be built and what the customer would like. As filling the basics becomes easier the idiosyncratic tweaks that you need special code for become larger.
    3. Technology changes drive systems requirements. 'The Last One' was so named because it was the last softwre system you were ever supposed to purchase because it then generate systems to do all you needed. Problem was 'the last one' ran on DOS.

    In the future we may spend more time assembling systems from OpenSource commodity chunks, but because the world is messy those chuncks will never fit exactly as required or cover all the requiments needed for each unique business. In fact I expect they'll be more work rather than less.
  • by Anonymous Coward on Saturday July 05, 2003 @03:54AM (#6371431)
    Computer scientists do treat CS as a science. The thing is, CS has almost nothing to do with actual programming.

    Computer scientists are to programmers what physicists are to engineers (though, admittedly, there are far more individuals who do both CS and progamming than there are physicists who are also engineers).
  • Re:Tim O is right (Score:4, Insightful)

    by sheldon ( 2322 ) on Saturday July 05, 2003 @04:03AM (#6371451)
    I have a cousin working for a company that sells, among other things, a mainframe based spreadsheet app. He claims that the market for applications is drying up, and I have to agree.

    I agree as well. The market for applications running on mainframes is drying up.

    Your attempt to extend this point further is rather absurd.
  • Re:Tim O is right (Score:3, Insightful)

    by fanatic ( 86657 ) on Saturday July 05, 2003 @04:51AM (#6371553) is good enough that anyone who knows better won't buy MS Office.

    Espcially when 'knows better' includes understanding what proprietary file fiormats that change on the whim of the software seller mean to data "owners".

  • by RevMike ( 632002 ) <revMike@gm[ ].com ['ail' in gap]> on Saturday July 05, 2003 @07:26AM (#6371818) Journal
    I don't see any difference between creating a new app or integrating many parts together into an application (or for that matter into a "system", for me they mean the same thing.)

    The difference isn't always clear. I use these factors...

    Integrations are much lighter weight than applications.

    Integrations are very specific to a particular environment, whereas an application is more generally useful.

    Integrations tend to use higher level languages, frequently interpretted. They rarely use C.

    Code that triggers an application to generate a TPS report, then opens the TPS coversheet template in a wordprocessor, then bundles the whole thing and uses the email app to ship it off is an integration.

    There are plenty of the places where the line is very ambiguous. The most important fact is that the center of gravity in the programming world is moving away from commercial software producers and writing big generally useful apps to customizers working directly for the users building small narrowly focused solutions.

    That is a profound change. Imagine, if you would, that groups of volunteers around the world collaborated to design and build a car - then gave the cars away free. Instead of going to your local car dealership, you instead visit your local Users Group, where they hand you the keys no questions asked. The auto manufacturing business would be in big trouble, but some of the assembly line workers might find new work doing custom configurations - new paint jobs, engine enhancement, installing moon roofs, etc.

    That is what is going on now. For a long time, OSs and applications were written by larger and larger organizations. Like physical commodities, mass production was used to spread the capital and R&D cost over a larger and larger market. OSS changed that, however, because it effectively made the those costs zero. The industrial production model is no longer valid. IT is changing back to a craft production model with local producers and local consumers meeting face-to-face. The economics of that model work again because the producers aren't being asked to write new applications requiring tens of thousands of hours, but to customize an existing application, at a cost of tens of hours.

  • by reallocate ( 142797 ) on Saturday July 05, 2003 @10:42AM (#6372232)
    But, the individual consumer buying an Apple product really doesn't care about licenses. Apple's relationship with open source is, almost certainly, unknown to that consumer. It is relevant only because it allows Apple to market an attractive product.

    O'Reilly noted that keying a license to distribution rights and obligations loses impact when the application is something like Amazon ot Yahoo, i.e. an app that won't be distributed. That applies, too, to millions of consumers of open source code who will never modify or distribute any code.

    The GPL and other open source licenses assume that code consumers are also code producers, i.e., developers. That is no longer the case.
  • Re:Tim O is right (Score:3, Insightful)

    by bigdavex ( 155746 ) on Saturday July 05, 2003 @12:22PM (#6372558)

    I have a cousin working for a company that sells, among other things, a mainframe based spreadsheet app. He claims that the market for applications is drying up, and I have to agree.

    The fact of the matter is that the various open source or free products are good enough. As the software consumers become better educated, the market for traditional applications shrinks. is good enough that anyone who knows better won't buy MS Office. Opera is as good as any browser out there and can be run free of charge - with only a minor banner ad. One by one any major "shrink wrap" product will feel the pinch.

    I don't think the application market is dead. It's just that a software company can't make money recreating applications with decades-old functionality. The spreadsheet is solved. Move along. People will still pay for software -- just not the same software over and over.

  • by PolR ( 645007 ) on Saturday July 05, 2003 @01:13PM (#6372748)
    Yes, but given back very little in comparison to what they've got. The projects Apple has "borrowed" from would exist without apple, OS X most likely would not without them.
    The rule for contribution is you give the output of your brain(s) and you receive the output of all contributing brains. Open Source contributors are bound to receive way more than they give no matter how much they contribute. There would be a problem if Apple were a leech, but as long as they contribute something, it is OK.
    But then again, they've chosen their licenses so that they allow this, and it's entirely okay if Apple takes everything and never gives anything back.
    The distribution of derivative works is not the only way to contribute. Ethically, the fact a license allows a proprietary derivative work does not dispense them from contributing otherwise.
  • by slux ( 632202 ) on Saturday July 05, 2003 @02:22PM (#6372980)
    I know, but the current copyright law still touches everyone. The one thing they do know is that you cannot copy Windows (even IE?) to your friends. Most do it nevertheless, but they know it is illegal.

    They also are bound to notice notice that the latest version of Windows costs a lot of money.

    The latter may be true for GNU/Linux as well, in some cases but the former makes it irrelevant.

    Granted, this is only a very small part of the way the GPL works, but it's a start. The hard part is convincing people about the rest of them as well. The FSF has been trying to do that for a long time now.
  • by Radical Rad ( 138892 ) on Saturday July 05, 2003 @02:24PM (#6372994) Homepage
    Let me give you an example of what I would consider a paradigm failure that happens all the time in the open source community. The critic of open source says, "Open source is just not very good at building easy-to-use software." And the open source defender says, "Oh, you haven't seen the latest version of Gnome (GNU Object Model Environment). It's really getting pretty good."

    Tim touches on something here that I have noticed too. Open source does not have a reputation for being easy to use. But why is that so? Some projects are very user friendly but in general the profit motive works against Open Source here. Consulting, Support, and Customization is the main business model in the Open Source world, but if a software is extremely easy for the end users to set up then there is less of a reason for consultants to be brought in.

"Even if you're on the right track, you'll get run over if you just sit there." -- Will Rogers