Business/E-Business
Commentary
1/27/2009
09:48 PM
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'Creative Destruction' Puts Open Source On Top

Cynics have always dismissed Open Source by claiming that you get what you pay for. There must be a lot of cynics collecting unemployment checks these days.

Cynics have always dismissed Open Source by claiming that you get what you pay for. There must be a lot of cynics collecting unemployment checks these days.This week, the New York Times delivered a pithy summary of the changes currently shaking the IT industry. The tech industry may be standing on shaky ground right now, but that doesn't mean it's unfamiliar territory: Indeed, Silicon Valley may be one of the few places where businesses are still aware of the ideas of Joseph Schumpeter, an Austrian economist who wrote about business cycles during the first half of the last century. He said the lifeblood of capitalism was creative destruction. Companies rising and falling would unleash innovation and in the end make the economy stronger.

Recessions can cause people to think more about the effective use of their assets, said Craig R. Barrett, the retiring chairman of Intel, who has seen 10 such downturns in his long career. In the good times, you can get a bit careless or not focused as much on efficiency. In bad times, youre forced to see if there is a technology that will help. As the Times article suggests, open-source software is the engine driving many of today's tech-industry success stories. Linux might not dominate the netbook market, but it has forced Microsoft to adjust its pricing and its Windows product lineup to stay competitive. Sun Microsystems says users now download 65,000 copies of its open-source MySQL database per day. And cloud-computing services based on open Internet standards, such as Google's email and document-editing products, are seizing the limelight from old-school sotware vendors.

One start-up firm, Arista Networks, told the Times that thanks to these and similar tools, it spends just one-fifth of what it would cost to use traditional IT products and services. Arista, by the way, is a tech-savvy company in the heart of Silicon Valley, not a desperate SOHO setup or a bunch of dewy-eyed business novices.

A decade ago, any company that cut its IT budget by 80 percent was hell-bent on doing itself in. Today, the companies that don't take low-cost or no-cost IT options -- including open-source options -- seriously will be the ones flirting with economic suicide.

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