Muschamp Rd

Open source VS Commercial software

July 1st, 2011
Why?

Twice now I’ve been asked in a job interview about the merits of open source VS commercial software, or how open source software can be used by corporations, or how startups can make money leveraging open source software? What are your assets if all your company does is contribute to and work with open source software? How do you assign a value to such a company?

A brief history of open source

The first time I was asked was a long time ago, 2006 maybe. A lot has changed with open source software since GNU was founded and began their work. A lot more has changed since the Cathedral and the Bazaar was linked to from Slashdot. And a lot has changed since 2006. However despite my experience using open source software, even contributing to the world’s collection of open sourced code, both times I did not articulate or phrase my answer to the best of my ability when it counted the most. I’m not saying I lost the job because of one question regarding open source software, but I certainly can’t afford to lose any points anywhere. So after the last interview ended I vowed to do some more research and try to better phrase my thoughts on where and when open source is acceptable and successful.

All Software Should Be Free

Some people believe all code should be open source and all software should be free. I’m not in that camp. Developers need to make a living just like everyone else. Giving away all of the fruits of your labour, especially after spending considerable time and money learning to become a professional software developer is foolish. No one expects lawyers and accountants to work for free. Considering all the software piracy that still goes on, the general public has a low regard for software developers and their work. People are much more hesitant to steal from a lawyer or an accountant.

Open Source on the Server

If not all software can be free or open source, where is open source or free software acceptable? Again some people would answer anywhere, but the passage of time has just not proven them correct. Open source software has been most successful among geeks and academics. It has been very successful on the Internet. It has been very successful in the software development community. It has been less successful on the desktop/laptop whether the actual machines are located inside large corporations or homes.

The Microsoft Tax

Many people are refusing to pay the Microsoft tax or the Office tax. There are open source operating systems. The GUIs for which have come a long way, but they still offer an inferior user experience and the latest, greatest killer apps don’t seem to come out on Linux first. There are alternatives to Microsoft Office. I myself have vowed never to upgrade my version of Microsoft Office again, but that was due to the removal of VisualBasic from the Macintosh version. I don’t think a killer feature has been added to Microsoft Word since the early to mid 1990s. PowerPoint was always the buggiest and least user friendly of the bunch. No it is Excel that will be the hardest to defeat. Whether you have an open source competitor or a spreadsheet program from another corporation, too many people, have too much invested into Excel to just drop it. I know after my MBA was finished I spent 100s of hours becoming an Excel guru, even learning VBA. Hence why I’ll keep my older version of Office installed on my MacBook Pro. Note apparently Microsoft has decide to return VBA to the Mac in 2011.

Mobile Open Source

Your home or office PC is becoming less important, a lot of people including myself do a lot of mobile computing, whether it be on a laptop, a smartphone, or a tablet. I own a MacBook Pro and an iPhone so no points for guessing which technology I prefer. Some think open source software, particularly Android can win on the mobile front. I and others are not convinced. The ability to control both the hardware and the software, an advantage which Apple enjoys, has proven extremely beneficial to their mobile computing efforts. Their marketing, their finger on the pulse of consumer demand, and just their sheer audacity has propelled Apple to the forefront of mobile computing. Google, Microsoft, Nokia, Samsung, RIM, they are all playing catchup. When RIM launched its tablet the features they touted were the two that the Playbook had which the iPad did not. It didn’t matter, 95% of the tablet market in Canada is controlled by Apple.

Where is the Open Source App Store?

Why is Apple dominating mobile computing, the App store. The app store levels the playing field for small developers, allowing them to distribute their product widely and to offload a lot of marketing, distribution, and accounting issues to Apple. Apple of course takes a cut. Back in 2000 hardly anyone was programming in Objective C, it was so hard to find Obj-C coders, Apple embraced Java.  This decade Objective C is back in a big way. Outside of the Internet, mobile computing has produced the most business success stories in the last few years. People have shown a willingness to pay for software for their smart phone or tablet. The same people who steal movies, music, and video games for their PC, are willing to buy movies, music, and games for their smart phone. Very few mobile apps are open source, however some of the software development tools and libraries are.

People’s willingness to pay for mobile apps, the level playing field in mobile App distribution and aggressive courting of developers is why Apple and iOS were winning the mobile computing battle but eight years later it seems Android and cheap Chinese handsets are number one in mobile.

Where open source is successful

  • backend geek only programs
  • software development tools
  • infrastructure/glue/middleware that holds the Internet together
  • utility programs focused on a niche
  • web browsers
  • server operating systems
  • mobile operating systems
  • CMS/Web Publishing

Where open source is less successful or completely absent

  • Triple A Video Games, especially franchises
  • Any software program that deals with money, personal finances, accounting, spreadsheets, etc
  • Professional Audio and Video editing
  • Security software or anti-virus software
  • Mobile Apps

Where open source has had moderate success

  • Cloning commercial desktop software
  • Databases
  • Desktop or laptop operating systems
  • Video and Audio conversion tools

I wrote the above pretty much straight from memory.  Let me know if I missed any niches or markets where open source is successful.

Here are some links that I dug up after the fact that support or contradict my opinion:

3 Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Posts on Muskblog © Andrew "Muskie" McKay.
CFA Institute does not endorse, promote or warrant the accuracy or quality of Muskblog. CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.