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4/14/2005
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Hungry Minds

I was glad to see the prospect of closer cooperation between Chinese and Indian technology firms get so much coverage this week. These two nations are the future of the world's IT industry, both as markets and as competitors. It's a future in which open-source software will set the rules: Whatever other surprises these giant economies have in store, you can bet one of them won't be a deal to put Longhorn and Microso

I was glad to see the prospect of closer cooperation between Chinese and Indian technology firms get so much coverage this week. These two nations are the future of the world's IT industry, both as markets and as competitors. It's a future in which open-source software will set the rules: Whatever other surprises these giant economies have in store, you can bet one of them won't be a deal to put Longhorn and Microsoft Office on hundreds of millions of brand-new Pentium 4 boxes.

If either of these countries ever considered paying millions for something they already create themselves for free, that time is long past. IT analysts in the United States and Europe will continue to argue the finer points of the Great Linux Debate for as long as someone pays them to keep talking. But none of this stuff matters in places where the poverty line is a buck per day, starvation remains a bigger problem than ROI, and the idea of trading free, reliable, good-enough software for anything that isn't all of these things is light-years beyond stupid.

As these economies, and others like it, grow into their full potential, what are the chances they're going to call up Michael Dell for some honest American-made hardware and order a few million copies of Longhorn so the kids can play a better breed of first-person shooters?

Here's the more likely outcome: the proprietary operating system market, worldwide and in every market segment, is on life support in 10 years and a zero-margin stiff in 15. In less time than that, Microsoft Office--arguably the most profitably piece of software the world has ever seen or ever will see--will open peoples' wallets only because they'd rather pay shipping on the free CDs than waste time on the free download.

I'm not going out on a limb with this prediction; both the Chinese and Indian governments already encourage the use of Linux and other open-source software, either by directly endorsing open-source products or by promoting the use of local software and hardware vendors. When one adds Japan and Korea to the mix, as well as Brazil's thriving open-source movement, close to half the world's population live in nations where open-source is already the favored development paradigm and where there's no good reason to change that fact.

Companies that simply complain about the unfairness of it all will get more sympathy and more press than they deserve. Proprietary software--the right kind of proprietary software--will prosper in East Asia, as it will everywhere else in the world. The companies selling these successful products, however, will also embrace open-source development, accept open-source software as an integral part of their business models, and learn how to parlay this balancing act into sustainable profits.

Who gets it? Red Hat and Novell get it, as do IBM and Intel. Sun and Oracle both get it, too. These companies will all find ways to make money, big honkin' piles of money, when China is cranking out 80 or 100 million Linux PCs a year a decade from now.

Who doesn't get it? Any software company that can't find a way to make money in a market where 100 million Linux PCs are rolling off the lines every year. It's a short list.

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