Subject: Re: Successful FSBs
From: Jim Menard <>
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.


> 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 Menard,,
"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