Subject: Re: Opportunity lost? Challenge declined!?
From: Ian Lance Taylor <ian@airs.com>
Date: 09 May 2001 13:58:57 -0700

Glen Starchman <glen@enabledventures.com> writes:

> I was recently the CTO of a VC firm and had proposed a project that used
> several open source and free software tools. After much negotiation with the
> CEO and COO, I had finally persuaded them that OSS/FS was the way to go on the
> project... until the CEO joined a *list that shall not be named* to "see what
> this free software stuff is all about". Within a few days the project was
> cancelled due to what the CEO called "those freaks that want everything to be
> free". 
> 
> Sadly, because of some misdirected posturing on that list (and, to be honest,
> some fairly radical ideas), a project that *could* have been a posterchild for
> OSS and FS was killed and I ended up looking like a fiscal idiot. 

That's unfortunate.  But don't get confused: you wound up looking like
a fiscal idiot, but the CEO actually was a fiscal idiot.  If a product
is cheaper and better, who cares if it's made by hippies?  It's still
cheaper and better.  (If it wasn't cheaper and better, then I'm afraid
that it is you who was the fiscal idiot after all.)

> This can be very difficult. Many, many organizations see the opening up of
> their codebase to be tantamount to sleeping with the enemy... making source
> code freely available means that eventually that code will fall into the hands
> of one's competitors and give them an edge. Hence the real problem: the fiscal
> reality of OSS/FS in the software arena. 

If your only way to make money is through the sale of software as a
packaged product, then you're probably right (although you neglect the
possibility of turning your users into developers and shrinking your
development costs).

But note that even Microsoft is moving toward selling software as a
service.

> > 2.  I am unsure of the return Linus Torvalds has seen from open-sourcing
> > Linux, but it does not seem to be on the scale of Bill Gates, Larry Ellison,
> > or Scott McNealy.  Granted, pure monetary success is not neccessarily the
> > only metric, however, most developers(and people in general) want to see
> > a return beyond the feel good of altruism for their efforts.
> 
> That is also a case in point. Sure, there are people who write software for the
> love of it. But there are also people who write software to make a living. If I
> run a bakery, I am not going to give out my bread recipe. 

Not a great example, since 1) bread is not permanent, so people will
always come back to you for more; 2) the marginal cost of making and
selling another loaf of bread is significant relative to the purchase
price, unlike the marginal cost of making and selling another copy of
a typical software program.

> > Which brings me to a more focused question than my earlier challenges:
> > How does a developer that wants to invest his time developing, get compensated
> > in the open source arena?
> That's a tough question, and one that most OSS shops haven't been able to
> answer.

Cygnus made a profit for many years before being bought, and Red Hat
is close.  Exception or forerunner?

Ian