Is the Open Source business model broken?
In an article in BusinessWeek with the provocative title "Open Source: The Model Is Broken", Stuart Cohen examines the role of Open Source Software (OSS) in business. He doubts whether the traditional OSS business model, which relies solely on support and service revenue streams, can survive. He reasons that the software is generally too reliable, while the added value for the customers is too small. Instead, the author suggests we should view OSS as a means to supplying customers with software.
Communities of experts use OSS to build applications because it is open and inexpensive. However, if an application fulfils its required role, it makes no difference to professional users whether they obtained the software on subscription, as a web service or under the GPL. The mechanisms within the OSS have indeed shown that collaboration and lean development can produce useful, platform-independent, high quality software that is capable of reducing costs. Companies that focus on collaboration have a bright future ahead of them, said Cohen, unlike those who remain with the traditional OSS business, whose future is likely to be bleak.
Cohen, who was CEO of Open Source Development Labs (OSDL) until the merger of the Free Standards Group into the Linux Foundation at the beginning of 2007, founded the Collaborative Software Initiative company (CSI) several months later. Not surprisingly, this company specializes in collaborative software development for vertical industries. How much of the article is PR puffery is therefore anyone's guess.