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December 4, 2000

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IMHO:
The Case For Open Source

Bill Portelli is president and CEO of CollabNet. Reach him at info@collab.net.

t first glance, it seems ludicrous for a software company to give away its source code--its most precious commodity. In reality, the open-source development process, when combined with the Web, offers significant advantages for entire companies, independent software programmers, and users alike. Open source is a development model where the source code for an application or product is freely available for others to view, modify, and redistribute.

Once limited to programming hobbyists, open source now plays a starring role in the global business arena. The transformation has enhanced competition and inspired new heights of innovation. Even companies that use proprietary software and licenses are integrating the concepts of open-source development.

There are many examples of the pervasiveness of open-source development and its impact on the Internet: Linux now powers 20% of business infrastructures; the Apache Web server conveys information from more than 60% of Web sites into our homes and offices; and Netscape has leveraged Mozilla, the open-source version of its Web browser, to capture market share and rapidly add features.

Selling licenses or shrink-wrapped boxes has been a tradition for software companies. In this model, the public is routinely left waiting for more than a year before seeing a stable product; feature updates and bug fixes can take months. In the meantime, the competition can gain a foothold, and users are left frustrated.

With open-source development, companies and users bypass these delays. Using the Internet to facilitate source-code release, companies such as Hewlett-Packard, IBM, Intel, and Sun Microsystems are gaining competitive advantages, generating long-term revenue and increasing market share.

In addition, companies that have no intentions of openly releasing their code are also benefiting from the open-source development model. Key collaborative techniques from the open-source process can be successfully applied inside companies.

There are many business benefits to opening companies' source codes. Releasing code early gives a global network of passionate programmers free rein to improve it. This, in turn, accelerates the development cycle and gives companies faster market penetration and the chance to establish an industry standard.

Opening source code for global collaboration and peer review also creates a higher-quality product and a vast network of users who consult with each other. Increased customer satisfaction usually follows.

Finally, releasing code empowers programmers and gives them a sense of ownership. This builds developer loyalty. Consequently, open source transforms companies' relationships with partners, customers, and even competitors.

But let's get down to the nitty-gritty: generating revenue. Typically, companies that give away their code generate revenue through added services or related proprietary software and hardware offerings. However, new avenues for reaping profits from open source are emerging

Most obvious, companies can use open source to rapidly increase market share and then layer additional proprietary software, hardware, and integration services revenue into that increased market.

To the uninitiated, open-source practices seem like a free-for-all. Many executives don't understand how to build a business model around open-source practices and principles. Even those who recognize the value in open source have lingering concerns and confusion about what steps to take when releasing code and joining the open-source community.

This confusion has created a niche for service providers that specialize in helping companies execute on open-source initiatives.

Open source is shaking up the development and sale of software across all industries. As the open-source movement picks up, the software industry will undergo signifi-cant improvement. With superior products reaching the market faster and breakthrough customer service resulting, there's every reason to embrace the arrival of open source.

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In My Humble Opinion is an occasional column expressing the opinions of InformationWeek's readers. Submissions of up to 750 words can be sent to imho@ cmp.com. Only writers being considered for publication will be contacted.

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