WARNING: LONG, POSSIBLY BORING READ. PROCEED WITH CAUTION. I'm glad Tim put this down on paper. I heard him give the presentation at OSCON 2003 and at Open Source Business Conference 2004 - brilliant, both times. The problem I have with it today, just as I did then, is that it provides little normative direction. It essentially says things like, "The way to succeed in the future is to build websites that everyone uses, because massive participation is a great barrier to entry." Fine. But how do I get there from here? I suppose I should architect my software/service/site such that it breeds add-ons, but this is no guarantee that anyone actually will choose to add on. In other words, good architecture doesn't in any way ensure a good product/good sales/good IPO. Maybe it makes these things more likely, but I'm not convinced. And it doesn't explain why MySQL has been so successful. They employ 100% of the code committers to MySQL - no architecture of participation (unless you count QA, and that does count). They're open source in some different sense of the word than the purists would like to use, but it's a sense that is bringing them dollars. More on this below. In trying to think through how companies can grow profitable while being good open source citizens, I've been trying to figure out how to leverage open source to get there from here. To jumpstart the brainwaves, I had breakfast with Larry Augustin a few weeks ago, where we discussed an idea that has been percolating in my wee brain for some time, and which is (mostly) captured in a recnet article I published. (See http://management.itmanagersjournal.com/management/04/06/10/1932254.shtml?tid=85.) In it, I argue that open source has less to do with source development, and more to do with open distribution. That is, open source succeeds because it drives down the costs of distribution, sales, marketing, and QA, allowing its corporate adopters to undercut established players on price, in true Clay Christensen fashion. (The data underlying this thought was that MySQL and JBoss employ most or all of the engineers contributing code to their respective code bases. Hence, they don't really benefit (much) from a global development army of engineers. The benefit lies elsewhere, in distribution.) So, while I gushed on and on about open distribution, Larry posed a troubling question: "If that's such a big deal, how is it any better than simply giving the product away for free (no cost) over the Internet?" I didn't know, and still don't. If few actually look at source (and the fact is, very few end-customers actually do - Microsoft pegs the number at 1% who expect to modify source if they had access, and I've yet to see numbers or experience that widely differ from this, especially since anyone modifying RHAT or NOVL source (or others) would immediately violate their support contracts and be left stranded. Few Fortune 1000 companies are going to take that risk), then one is left wondering what, other than low cost (as in acquisition cost), is driving open source adoption by corporate customers. If anyone has thoughts, I'd love to hear them. Again, I like Tim's ideas on this, and agree that "software" will increasingly migrate to the web. But this doesn't make it any clearer how to build a successful business on the web or elsewhere. It maybe tells me what a successful company looks like when it's all grown up, but it gives me no practical guidance on how to take one to that level. (Frankly, if one takes eBay and Amazon as marquee examples, as Tim does, it's perhaps even easier to argue that they are successful because of their first, biggest mover advantage, and not because of any architecture of participation that only flowered much later. Only Google may have immediately been better because of its architecture, and that took a long time for people to recognize and for them to capitalize on.) Matt >>>Russell Nelson <nelson@crynwr.com> 06/28 8:36 pm >>> We should be talking about this, eh? From: Tim O'Reilly <tim@oreilly.com> Date: June 26, 2004 12:57:30 PM EDT To: Dave Farber <dave@farber.net> Subject: The open source paradigm shift Dave, this may be of interest to your readers. I finally got around to writing up the talk I've been giving for the past year or so, at locations as divergent as Red Hat and Microsoft, about the way that the commoditization of software is driving value up the stack to web apps, and how these apps leverage network effects (and in particular what I've been calling "the architecture of participation") as their key tool in gaining competitive advantage. I also talk about how the "Intel Inside" positioning is being rediscovered in various software niches, and how commodity software means that assembly of custom Linux distributions (rather than added value) may be a key competency. http://tim.oreilly.com/opensource/paradigmshift_0504.html Tim O'Reilly @ O'Reilly Media, Inc. 1005 Gravenstein Highway North, Sebastopol, CA 95472 707 http://www.oreilly.com (company), http://tim.oreilly.com (personal) blog is at angry | The USA has turned into a Crynwr sells support for free software | PGPok | people that are afraid of 521 Pleasant Valley Rd. | +1 315 268 1925 voice | everything and responsible Potsdam, NY 13676 | FWD# 404529 via VOIP | for nothing. GF