Subject: Re: Successful FSBs
From: "David Kaufman" <david@gigawatt.com>
Date: Mon, 23 Sep 2002 00:38:24 -0400

Adam Turoff <ziggy@panix.com> wrote:
>
> Rich's conclusion is that there is no such thing as an FSB.

there *can* be no such thing as a Free Software Business if you define
Business so narrowly (and i might add radically) as to exclude business
which own and/or license any intellectual property :-)  or violate,
somewhere in someone's opinion, the spirit of the GPL, or the feel-good
information wants to be free doctrine, even though that may be mine, or
yours or Open-Source's Altruistic Values.  businesses are about Value,
and who can deliver it to a Market, not about Values, and who believes
in whose.

> Zope Corp and MySQL AB disprove that conclusion, even if you
> completely discount the lifestyle FSB.
>
> If I understand your point, Simon, then "para-Open Source"
> organizations like Oxford, UC Berkeley, CMU, MIT, O'Reilly,
> ActiveState, Apple, IBM and Sun are more important to the long-term
> health and viability of Open Source.

if we exclude relevant participants like ActiveState, Apple and O'Reilly
from membership in the "Open Software Businesses" club, then all we do
is exclude ourselves from the Business aspects of Open Source software.
if we don't the define term "Free Software" (as used in the term "Free
Software Business") a bit more broadly to, say... "of or pertaining to
the entire open source industry", rather than "living and breathing the
rules of a particular software IP belief system, moral code, or licensed
behavior", then to be a successful free software business we'll
eventually have to forgo owning or selling anything!

IMO you only need to *participate* in the Free Software Industry, and
succeed in that business to be a Successful Free Software Business.
succeeding at business just means finding and keeping customers, selling
something of value, making a profit, and surviving to make they payroll
another day.  therefore succeeding in the Free Software Business could
be defined as "profitably participating in the Free Software Industry".

by that definition, i don't know whether ActiveState (for instance) is a
*Successful* FSB.  they are a Free Software Business since they
participate in the industry, but if you want to exclude their profits
from sale of their proprietary software from consideration in measuring
the "profitability" of their participation in the FS Industry, then no,
they may not be participating "profitably".  OTOH if you reasonably
consider even those proprietary tools "participation" because, though
some tools are not open source, they are *dependent* on the open-source
industry to the extent that they couldn't exist without it.

how can AS's proprietary IDE for debugging Open-Source-perl-language
code, *not* be considered at least "participation" in the open source
industry?  it may not be "good" participation in someone's opinion.  it
may not be "good for" the open source movement in someone else's, but it
*is* participation and it is business, is it not?  if it's a popular
visual debugger or a successful (?) product, that's because it's a good
tool, designed and developed for, and marketed exclusively to, perl
programmers, because perl is popular, and perl is popular because it's
free-as-in-freedom, *and* free-as-in-beer, and cool, and the not-free
debuuger wouldn't exist without it.  until another business builds a
better or "freer" or otherwise more Value-able visual debugger for perl
on Win32... i guess it will continue to be a Potentially Successful Free
Software Industry tool that is Not Free (in either sense of the term)
and if that's not a Free Software Business story, what is?

clinging blindly to the GPL like a bible and trying to apply it's theory
of freedom to the business of software development, distribution and
support is like trying to apply textbook child psychology to actually
raising a kid.  there are a lot of good ideas in there, and they may
look good on paper, but where the rubber meets the road each kid is
different, each business is different, each piece of software attracts
different a diffent group of users.  and just like each parent must
figure out for themselves what works with their kids, each free software
business must find it's own opportunities to create and sell value to
it's unique market.

even a free software businesses cannot concern itself nearly as much
with whether it's activities are "important" or even compatible, with
the "long-term health and viability" of it's community.  obviously a
business is not going to do things that it knows could even be
*apparently" harmful or completely counter to the goals of the industry
it is in, if only because a business's reputation is critical to finding
and keeping customers.  any business might take the position that it's
industry's health and viability *is* important to it's own success, but
if it chooses to do so, the goals being met are the self-serving ones of
survival and profitability -- it's own business success, not the
industry's success.  and if it chooses to do something apparently
counter to the "ideals" that are common in its' industry, then it's
taking the risk that it's customers will find more value in buying and
using it's closed source tool, than in avoiding proprietary software at
all costs, even in the case where there *is* no suitable open source
alternative, no competition.  ActiveState takes that risk fairly boldly
because, one would assume, that it's customers, developers, are going to
be for the most part, more interested in the tools than the ideals.

the term free software, in terms of it's use in for-profit businesses,
cannot be limited to single software package, a particular license, a
specific versioned tarball, or even an entire class of software with
similar licensing terms.  there are just too many angles.  O'Reilly &
Associates sells information (some restrictively licensed, some not)
packaged into slacks of tree slices, while Covalent forks the apache
code, adds their own value, and resells the result, contributing (only
some?) of that value back to the community.  companies use open tools to
produce closed products, and vice versa.  these are all valid business
practices, realistic strategies, and Necessary Experiments.  the open
source "community" can be, and is, very picky about what *software* it
accepts into the fold, but i'd suggest that the open source "business
community" does not have that luxury with respect to businesses, lest it
find itself devoid of any company. (pun intended)

it is most definitely cannot saddle it's "membership" with the
altruistic goals of the "community".  just ask anyone in the
not-for-profit fund-raising industry.  if "membership" in that industry
were dependent on the "purity" of the businesses' individual goals, and
that were defined as the business placing the industry's goals equal or
higher than it's own single simple goal of success in terms of
profitable survival... well, there'd be no not-for-profit fund-raising
industry!  there is in fact more than enough profit in the
not-for-profit fund-raising industry to support an entire, well
industry... of products and service bureaus, vendors and suppliers to
assist these foundations and funds in their goal of raising massive
funds for "good" causes, without turning a "profit".  the fact that such
and industry exists simply proves that only when a business can meet
it's profitability goals while *simultaneously* supporting (or at least
appearing to support) the altruistic goals of the larger industry, can
it survive and succeed.

when we consider Free Software more broadly as an entire industry, then
we see that while Apple, for instance, is not "in" that industry, in the
sense that they would not exist without it, they are most definitely
"in" the industry in the sense that they participate in it, and have in
fact become a quite important factor in the Free Software industry, of
late.  what's the difference?  is Apple a Free Software Business even
though they primarily build sell and service Non-Free Software?  ...even
though they build, sell and service hardware, too?

take the auto industry as an example.  some companies in that industry
do research, the researchers support companies that do engineering work;
GM employs the engineering firms, acquires materials and builds
automobiles, others buy those automobiles in bulk, market them, sell
them and service them.  others finance the sale and lease of cars.
still others sell add-ons and third-party automotive "plug ins"  :-)
more businesses exist solely to repaint, clean and refuel automobiles,
to rent them, buy them, resell them, refurbish them, drag them around
town when thy break, and crush them into cubes for recycling when they
can no longer be repaired.  are any of these companies not in the
automobile industry?  are any not "automotive" businesses?  isn't Honda
an Automobile Business even though they also make motorcycles?  isn't
Suzuki in the industry too, even though their cars
are but a relatively recent (and somewhat pathetic) addition to a
product line traditionally consisting of motorcycles, recreational
Jet-ski's and ATV's?  of course they are.  they each participate in
multiple industries, to varying degrees, and with varying degrees of
success in each.

> Lifestyle FSBs are still an open issue, given their mixed history
> and short life (c.f. Cyclic, Cygnus, and countless others).

balderdash, i say :-)

continuing with the Free-Software-as-an-Industry-not-a-Religion theme,
every industry has lifestyle businesses;  should the guy who owns and
operates his own auto repair shop *not* be considered a member of the
automotive industry, not an "automobile business", simply because he is
a tiny player, whose business may cease to exist the day he retires?  i
think he *should* be a member since, after all, he and thousands of
others just like him constitute 90% of the national automotive third
party parts market.  without them, TRW, a *huge* third party
after-market parts manufacturer (who also participates in the credit
reporting industry in no small way, yet is not denied to be an
automotive parts business, too) would not be participating in the
Automotive industry at all.  TRW's automotive parts business is
dedicated to providing support to lifestyle businesses like this.

if, for argument's sake, some large proportion (like 30%) of all the
perl CGI scripts ever written happen to be written by self-employed
freelance programmers working as independent contractors for the
websites of small businesses' in their local cities and towns, how can
these small businesses *not* be considered Open Source businesses, even
given their "mixed history and short life"?

ActiveState is the TRW of this Open Source market.  they've make a
successful business out of selling software (some free, some
proprietary) to programmers who use open source languages to sell their
programming services to anyone who'll pay for it.  they add value to the
open source industry by enriching it with more tools, more activity,
more demand, and thus more business opportunities in the Open Source
market.  while these self-employed "lifestyle business" developers
aren't major players *individually*, in our "Free Software Industry",
they do consider theirs open source businesses, and ActiveState treats
them as such, listens to their business needs, and the needs of *their*
customers, because these programmers are using open source for it's
value, are adding value, and are profitably selling the resulting
services and products.  is there an IPO in their future?  probably not.
a Fortune Magazine cover?  i don't think so.  but they are businesses
nonetheless.  are they Free Software Businesses?  many would tell you
that they are.  are they *Successful* Free Software Businesses?

well, of course that depends on your definition of success.

but please, if you want to limit your definition (or the discussion) of
"successful free software businesses" to Pre-IPO Free Software
Businesses, or Venture-Capital-Funded Free Software Businesses, Free
Software Businesses
That-Offer-Major-Medical-Insurance-Benefits,-Can-Afford-The-Salary-I-Wan
t,-And-Can-And-Will-Topple-Microsoft's-Monopoly-One-Fine-Day, by all
means do so, but call a spade a spade.

-dave