Subject: Paul Fremantle on Open Source Business
From: "Stephen J. Turnbull" <stephen@xemacs.org>
Date: Sat, 22 May 2010 21:24:26 +0900

Federico Lucifredi writes:

 > http://www.sdtimes.com/content/article.aspx?ArticleID=34351&print=true
 > 
 > I am not sure what my take is on this.

I find it perilously close to Stallman's caricature of ESR.  You don't
have to buy into the Free Software Movement's claims of some sort of
inalienable right to copy software developed by others to take the
position that open source is more than just another "business focus".

Software is a non-rival good: once produced, you running a program
does not interfere with me running the program.  There is a social
good to broad distribution of software, at no (static) social cost
beyond the negligible cost of media.  There is a dynamic social cost,
that is, loss of incentive to produce more software.  The degree of
that loss is debatable.

What is not debatable is that those who voluntarily choose, for
whatever reason, to distribute software under an open source license
are doing a lot of additional good, *over and above* being "led by an
invisible hand to promote [the public interest]".  Adam Smith's
invisible hand is near and dear to my heart, but it can't take credit
for this additional public good done by open source software.
Developing or using open source software is more than just a way to
make a profit.  It deserves specific social approval and support.

But taken at face value, Fremantle's definition "an open source
company [is one] committed to using open source to create an ongoing
competitive advantage ... in every aspect of [its] operations" admits
the possibility that the company discovers that open source doesn't
work to create competitive advantage, and turns to something else.
Nor does it acknowledge that open source *necessarily* contributes
more to the larger society than merely the benefit to customers and
the profit of the business.

Of course, normally the word "commitment" would imply "moral"
commitment.  But after invoking Porter, it needs to be made explicit.
Porter's thesis is that excellent companies are all *committed*
companies, in the sense that they are betting their future profit,
even their existence, on their ability to continue to derive
competitive advantage from their focus.  I think that open source
companies should advocate the position that open source is a focus of
special merit.

Some companies might want to argue the "lifestyle business" position:
we do this because we're taking part of our compensation in the
satisfaction that we're contributing far beyond the small circle of
our "paying customers".  Others might say "this is what we're best at,
and that's why we're doing it, to make money -- the extra social
benefits are just our good luck," in a certain sense.  But all should
advocate open source as a *good* focus.