A few years back, a host of open-source businesses raised hundreds of millions of dollars on the promise that they would commoditize old, dying markets, and make a bundle of money in the process. Missing from this thesis, however, was its logical conclusion: winning in a fading market is tantamount to losing, as the …
I really REALLY hate the phrase du-jour "back in the day"!
Ce n'est pas une phrase de jour, c'est une cliche.
I will translate for you what Mr. Matt Asay just said:
You may be the most innovative company on our solar system and you can invade any market you might please but you will not have the slightest chance of success if you don't find a way to lock-in your customers, twist their arms and squeeze their wallets into a (I love these words) sustained revenue stream. Trumpeting the words Open Source (or at least Open) whenever you describe the objectives/products of your company can be a valuable tactic to divert the attention of your potential customers while you're preparing to lock them in. The reference to Red Hat here in this context works as a smoke screen.
There, Mr. Asay, you didn't have to waste all those heavy marketing-speak words.
Let me try
I'll attempt to translate from what Asay said, to what Asay should have said if he only knew the words:
You can be the best open-source coat tails surfer in all of the inter tubes, but unless you've got the business nous to set the road between the new users you've acquired and the inevitable and required investment in research and development... then what you've done is commodised the market to a standstill.
It's your business's choice if it wants to pass money from over charging support services to the programmers (al la Red Hat), or if it wants to simply advertise and accept development jobs directly (Most smaller foss businesses), but the point is clear that you can't just have an eternal 'tin of beans' in software that you keep on re-selling.
Not just lazy writing - lazy thinking too
To state what *should* be bloody obvious, there's nothing wrong with open sourcing an old market provided :
1) You have your fingers in more than one pie, or use your income to exploit another dying market, as eventually the old market will die
2) Money is made from the services associated with the open source, customisation, etc.
It's business. If you can make money at it - why not? Don't sniff at CA because they're picking up products in decline. If CA are consistently making money with that strategy, than even if it's not sexy and new is it sensible to knock them? Really?
"It's like saying, is there money in replacing steam with electricity? It probably took a long time for electricity companies to grow as big as steam-based industries, but it was inevitable. and people make more money from electricity than they did from steam."
All the steam companies moved into elastic trickery and made their money there, in the same way petrochemical companies are moving into renewable energy, traditionally fossil fuel car manufacturers are dominating the hybrid / electric car market and so on.
It also seems quite a strange statement to suggest that "everyone" is making a fortune out of open source. Some companies in the FOSS business are doing OK, some are even doing quite well (although none are doing anything like as well as typically closed source operators Microsoft, Apple, SAP and Oracle to name a few), but they are making money out of services based around FOSS rather than FOSS itself. They could just as easily make fuck-loads of cash out of services based predominantly around closed source software - like IBM, HP/EDS, Fujitsu etc. etc. already do.
Suggesting that a secretive, closed source company (Microsoft) losing out in one, currently niche market to another secretive, closed source company (Apple) is the start of the revolution is, well, interesting, to say the least.
Apart from the obvious fact that Microsoft are in no way "dying out", should the market suddenly shift towards a services on FOSS based structure then large, cash and skills rich closed source companies like MS will be much better able to re-align their revenue streams than smaller companies. However, I think you already subconsciously know this:
"That's like saying that mammals are not successful because the largest one is not bigger than a baby Dinosaurian Sauropod"
Largest sauropod (weight, by estimate) = 120 tons
Largest Blue Whale (most definitely a fucking mammal) = 190 tonnes
You sir, fail at failing. And that is neither a double-negative nor a compliment.
As someone that spent a lot of time tilting at the M$ windmill, and misses no opportunity to push RH in our business, I have to smile at the whimsy in your post. A simple glance at http://www.microsoft.com/investor/default.aspx will show you how wrong you are, especially the bit about the $244.69bn market cap! So, M$ is "losing" on phones and "tablets" (the latter is debateable seeing as Apple have not produced a tablet PC but a media tablet), so what? M$ is still raking in massive revenues in the desktop and server arenas which us FOSSers thought we'd own by now. Meanwhile, M$ is also busy in cloud (hey, wasn't that also supposed to be a FOSS certainty?), and has just released a phone OS that is getting good reviews and reasonable sales traction. As usual, reports of the Beast's death seem a bit premature.
"not sexy and new"
If it's not sexy and new, what is there to hype? What is there to fill column inches? Never mind if it's consistently profitable (or even if it's just tried tested and proven), that's the least of a hiptrendy mediatart's concerns.
A restatement of the woeful inadequacy of OSS gaming.
Isn't everything in that article just saying that the problems of open-source gaming are applicable to all open source?
IE. You guys may be good at cloning existing software, but as most of you don't have a clue how to come up with anything new, only like 3 of you will ever amount to a hill of beans?
Have you played the humble indie bundle?
Actually regarding Gnu/linux as a platform for indie gaming there are some amazing titles on the humble indie bundle. World of goo alone is better than nearly anything big label I've seen recently.
The pay what you like model used also raised quite a lot of cash for charity and developers, and the Gnu/Linux users donations were roughly twice as much as the windows/osx users.
A restatement of the woeful inadequacy of proprietary gaming.
You've got to be kidding. Proprietary game studios are highly derivative all copying each other and trying to be the first to reach the same cliff so that they can all jump over. Generally, commercial game studios have NOTHING on Free Software when it comes to creativity. Most just redo the same tired ideas or milk the same franchise year after year.
quick is another alternative
There may not be a permanent lucrative future in a commodity market, but in the pharmaceuticals area the generics are doing fine at present.
In the IT space, CA comes to mind.
Cloud is another name for VPN
The new catch phrase, cloud computing, appears to me to just another name for VPN. Or distributive storage. Or any other technology IBM, Ingersoll-Rand, Honeywell and others had back in the days of mainframe iron. And anyone who is stupid enough to put any data out in the wild for the world to hack and steal deserves what they get.
Let's open source Solaris!
Let's open source Solaris!
Eadon - I agree (in a way)
The article appears to be answering the wrong question: How can an open source operation grow to be as big as the current proprietary tech giants?
or maybe (reading between the lines) how can I become the next Bill Gates?
or perhaps more accurately: How can I work like stink on something I hate for a short time then sit back and watch my Lear Jet fund grow.
The real point is there are people with other goals.