Subject: Re: Successful FSBs
From: Jim Menard <jimm@io.com>
Date: Wed, 30 Oct 2002 10:43:48 -0600

Tim O'Reilly writes:

> For that matter, OSS dynamics put competitors in a very strong position as
> well, and competition keeps prices down. (That's another way of saying it
> puts consumers in a strong position.)  You can build a huge business with
> commodity software (viz. Uunet or Earthlink in the ISP market), but it's not
> going to be anywhere near as profitable as a similarly sized proprietary
> software business.

Aren't you comparing apples and oranges? Building a business using
commodity software is not the same as being a software business. Companies
that happen to use OSS to provide a service grow independently of what
software they use. Companies that produce and sell software---proprietary
or OSS---grow based on the software they provide.

[snip]

> Back to an example from FSB.  In the case of ISPs (a business mainly built
> using commodity TCP/IP stacks), Uunet came closest.  Their strategy was to
> dominate the backbone -- to be the best connected site, with lock-in on on
> key interchanges -- and it worked pretty well for them.  So they didn't lock
> in on software but on network topology.  Meanwhile, AOL and Earthlink
> followed the strategy of customer acquisition at all costs, pumping huge
> sums of money into folks who would pay off in the future.  But even with all
> these strategies, no one became dominant in the way that Intel, or
> Microsoft, or Cisco became dominant with their respective, proprietary IP
> strategies.

Again, I see a difference between selling a proprietary thing vs. selling
an open/free thing. Earthlink uses OSS to provide a service; customers buy
the service.

Forgive me if this has all been pointed out before or is too simplistic.
I'm new to the group but I couldn't help butting in.

Jim
-- 
Jim Menard, jimm@io.com, http://www.io.com/~jimm/
"The reason why there is no good commercial Java develoment environment
is that the only folks that are good enough to write one all use EMACS."
    -- Unknown, on comp.lang.java.programmer