Not too long ago, I was sitting on a panel at the Churchill Club moderated by John Markoff (of New York Times fame). Joining me on the panel were Charles Phillips, President of Oracle, and Dan Rosensweig, President of Yahoo!. The topics ranged from what it’s like working with/around founders, how we balance work/life, leadership styles, etc.
My favorite question of the evening (and I’m planning on making the session available on my inaugural podcast, stay tuned) related to the world of free and open source software. Markoff asked something to the effect, “I was just up at Microsoft, where Bill Gates equated open source with communism. How do you respond?”
That same day, Dan had posted absolutely incredible performance at Yahoo!, delivering their first billion dollar year (in earnings, not revenue, earnings). Which gave me the perfect backdrop for my answer.
“Last I checked, Yahoo! was free. But with a billion in earnings, Dan, has anyone ever accused you of being a communist?” Dan said “Nope.”
In my view, the economics of free and open source software are identical to the economics of free search, TV, radio, checking accounts or mobile phones – the money’s not in the access to the product, it’s in the services and value delivered around the product. The vendors of those products have a huge interest in eliminating the divide between them and their customers, one typically based on price – as a means of enabling higher value opportunities. It’s a basic concept, and if you’ve read this blog for any length of time, you know my views on how networks and subscriptions (whether to handsets, software updates, roadside emergency services or sell-side analyst reports), over the longer term, can change price and value equations for businesses that know how to exploit them.
Now just this morning, like me, I’m sure you got an email entitled “Know the risk. Compare the protection.” from Microsoft.
In it was embedded a link to an independent analyst’s report, provided by the Yankee Group – which I’ve provided here.
I’d encourage you to read this for a view on how “open source” is misunderstood. Reading the report, you get a sense that open source is somehow irresponsible compared to Microsoft’s products or approach. And moreover, that customers have to choose – open source, or safety.
Nothing could be farther from the truth – any more than “free checking” is more dangerous than paid checking, or free TV is more dangerous than cable. Solaris is being open sourced, under an OSI-approved open source license, and will be indemnified by Sun – customers do not have to succumb to the view that using open source is somehow less safe than closed source.
The critical point missed in the report is a simple one: the license or price under which a product is released to the world is entirely orthogonal to the indemnity for that product provided by its supplier – and the view that open source software is somehow more dangerous than closed source is just as misinformed as the view that customers don’t need indemnity (“Since IBM is not a Linux distributor, it does not offer direct indemnification,” say IBM execs.)
What I’ve seen customers wanting is open source, open standards, and an open dialog with vendors willing to stand behind their products. They’ve had enough duplicity and scare tactics.
ps. stay tuned for news on Java’s open source accessibility, too…