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From Stefano Mazzocchi <stef...@apache.org>
Subject Re: AW: Infozone
Date Thu, 08 Jun 2000 14:54:32 GMT
Matthew Langham wrote:
> 
> >>>
> >
> > Just a rant... I have seen a lot of corporate OSS interest in creating
> > their own OSS projects/groups.  They get venture, want to do open source
> > and then have venture.org as their project umbrella.  IMO it is a VERY
> > bad idea.  We are already here, have a strong community, and have been
> > doing this for a while.  :)
> 
> These companies normally don't last more than two rounds of financing
> anyway :-)
> >>>
> 
> Hmm... while I agree on the subject of OSS that can be used in all markets
> (such as Linux, Cocoon etc.) - I am not sure I agree when it comes to a
> company that would provide OSS for specific industries.

No, please, don't get me wrong.

My comment was made around startup companies that to promote themselves
try to startup a new open source community around them. There are tons
of these coming up. And many of them are already failing or changing
their business models.

> Lets take eCommerce
> as an example. A week ago I read that some company is positioning its OSS
> solution against Intershop. I think this is a good idea and could be a
> success. I think that when you provide OSS for specific industries (and I
> can think of better ones than eCommerce) then the value of the services you
> provide around the software increases (because you also need knowledge of
> the industry). On the other hand the value of the software decreases
> (anyway). And more so as more of the underlying software is moved to
> Internet technologies such as XML.

Service is a highly profitable market while software is not anymore. M$
showed the world you have to play tricks (to say the least!) to keep it
profitable, while other companies are starting to sell other things like
services (IBM), hardware (Sun, Apple, VALinux) or warranties (Oracle).

The question is: is there room for packaged OSS software business?
probably to make a living, but nothing that could fuel the community
back.

And what happens if these "wrapping" companies start to loose profits?
they cut on new research, they stop pushing for projects, they stop
being nice to the community.

And the community stops being nice to them, creating lots of friction
and making managers feel unconfortable with this "uncontrollable open
source stuff". There is no steering wheel, even if you pay the checks of
the main developers (you can't stop them from working on it).

And GPL removes the ability to add proprietary value to the technology
since everything will be pushed back and no company will survive another
round of financing.

The new economy is crazy and companies like Helix make very little sense
to me but, at least, contribute to the advancement of the whole OSS
economy.

But totally different thing is providing services based on OSS software
with OSS-grown engineers. This is where the market is. If I'd create a
company, I would not package cocoon and sell it, but provide a
commercial frontend for cocoon-based development.

When I do consulting I do exactly that: the software is free, but bits
are useless without knowledge of the problems and solutions.

I foresee lots of problems for those "OSS wrapping" startups that
provide packages software. Not because of their inability to market it,
but because incredible friction will develop between the company and the
community... and 40-something-years-old experienced CTOs _hate_ when
20-something-years-old wizards tell them what's good and what's not. :)

Open source dynamics are complex and even more complex are the economy
dynamics that are built on top... but unfortunately, these are
prosperous times where venture capital is easy to get and easy to waste.

But times will change and only serious companies will survive.

While, magically enough, OSS will see a new explosion when unemployment
rates will grow, and OSS-recruiting based companies (like Collab.net)
will make the difference, removing revenue from big companies and
placing it back to talented individuals.

It's easy to plan a business model in prosper times with tons of venture
capital flowing in, but it's totally different to design a business
model that could stand up when those capitals stop flowing.

-- 
Stefano Mazzocchi      One must still have chaos in oneself to be
                          able to give birth to a dancing star.
<stefano@apache.org>                             Friedrich Nietzsche
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