I've been traveling more than usual lately, and while on the road I've been working my way through the ITConversations audio archive. It's full of gems, and one of them is Doug Kaye's interview with Philip Greenspun. While discussing the ArsDigita flameout, Greenspun offers insightful perspectives on the opportunity, and the risk, of open source as a business model.
The opportunity, he says (2 min, mp3), is:
To tackle a "novel or poorly-solved problem",
create a popular and widely-deployed solution,
customize it for businesses more cheaply than their own people can,
and charge a premium for your unique ability to roll customizations into the main release.
The risk, he says (1.5 min, mp3), is that:
Only business customers can pay well for such service,
but if you're "a day later or a dollar more" than their internal IT crews, you're toast.
Both halves of this argument are contrarian. Part one -- that open source businesses thrive on "novel or poorly-solved" problems -- seems surprising because most of the success stories revolve around commoditization of known solutions. Part two -- that open source businesses are exquisitely vulnerable to inefficiency -- likewise seems surprising because the architecture of participation can be highly efficient.
I like contrarian arguments, and these are two worth pondering.
Former URL: http://weblog.infoworld.com/udell/2004/09/22.html#a1081