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Has Open-Source sold out?

Posted on 3 Sep 2008 at 12:16

Stallman continues to insist he doesn't do open source, even if open-source software is the same software as free software - Linux, Firefox, OpenOffice and so on. He says: "Open source is a development methodology; free software is a social movement."

That may be true, but it's certainly not why capitalist corporations such as IBM and Apple are using open source, and it's not why businesses are adopting it. They are using it as a competitive weapon. Which is, of course, exactly what permissive BSD-style licences and the Open Source Initiative invited them to do.

Is that a problem? Glyn Moody, author of a GNU/Linux history called Rebel Code, doesn't have an issue with people such as Oracle co-founder Larry Ellison and Apple's Steve Jobs "ripping off" the community. "As a programmer, you want as many people as possible to use your code," he replied. "Even if nasty people use your code, or people you may not get on with, they can make it better. At the extreme, either companies follow open-source principles or all the programmers leave, so does it really matter?"

Red hat rules

You are allowed to charge for free software: the problem is making users pay for it. No matter how little you charge for your version of Linux, someone else can always charge less, so the price is rapidly driven down to zero. As Sun's Simon Phipps said: "Gratis is actually a side-effect of libre."

However, Red Hat has shown you can build a substantial commercial business out of distributing free code. In the year to February 2008, Red Hat had a turnover of $523 million and profits of $76.7 million. But as European vice president Werner Knoblich explained: "The business model is more focused on added value around the technology, not technology itself. We charge a subscription, but the bits and bytes are free."

Red Hat helps companies to deploy, integrate, update and manage their IT systems, and it also offers training and round-the-clock support - exactly like companies that sell proprietary software. The difference is that "we have to constantly prove to the customer that we have added value", said Knoblich, "because we have no lock-in. Companies such as SAP, Microsoft and Oracle can afford to provide okay support, because in the end, the customer has no choice."

Still, the basic business remains the same. As Sun's Phipps puts it: "You can perfectly well charge for everything that you used to charge for, except the right to use the code." And if you look at the total cost of running a company such as Amazon or Google, or a bank or stock exchange, the "right to use" charge is small beer anyway.

The problem is that with open source, there's nothing to stop anyone from taking your code, removing any logos and selling it for less. This is what Oracle did to Red Hat in October 2006 when it announced its Unbreakable Linux. It couldn't have done that to Apple, IBM or Microsoft. "Well, you can just take our code, rebrand it and re-sell it, but then you don't have Red Hat Linux any more," said Knoblich. "The value is not in the bits, it's in the complete ecosystem, and in the support of ISVs [independent software vendors] who certify their code for Red Hat Linux. There are more than 3,000 programs certified against our technology, and it's expensive for an ISV to certify a new distribution and support it over many years. That's why if you look at commercial Linux, there's only two out there: Red Hat and SUSE Linux."

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