Why Open Source? Google, Facebook, Amazon & Netflix can tell you: makes you money.

A long comment I had to cut down in response to this post on Open Source. Highly recommended.


Very good run-down of 'Why FOSS" - standing on the Shoulders of Giants.
Where bugs become either a Shared problem or "Other People's", not a killing 'tarpit'.

Loved the Daniel Pink video:
  we're not just about Survival and Profit at any cost.

A Lawyer brother of a mate always questioned his FOSS work:
  Why give your work away? [meaning, "you could make so much more if you charged a lot for it"]

This question is based on both false assumptions and a limited model of economics and business.

Imagine if Maths, Physics, Chemistry, Biology and other Research only worked this way.
Would you pay 10cents every time you used Pythagorus?
Or would you just 'approximate' Pi to 3? (and see everything you built fall down)

The 'drag on the economy' of paying for everything would be horrendous.
If we elected to uniformly allow inventors, not the select few, to charge for their work, the global economy would fail.

Humans in groups benefit more from general co-operation than competing fiercely, in all endeavours. It's why we pay taxes - to share the costs of expensive things that provide disproportionate benefits to us collectively.
Imagine paying 'what the market would bear' for clean drinking water, even clean air. No economy could survive that.

Competition creates 'challenge' and prevents complacency and laziness - it's not a bad thing in itself.

But competition comes with significant costs & downsides:
  it's economically 'inefficient', having hundreds of people re-invent the wheel.
  In Engineering terms, everyone gets to reinvent the wheel, to make some of the same expensive mistakes
    and no one group ever learns all the 'good' things. Until they merge or are bought up...

Look at what NASA did in the 1960's - from a standing start, they went to the Moon and back, safely.
Now we have multiple private groups trying to get into space, building on a whole different technology base and changing the accepted wisdom and challenging decades of entrenched methods. They lowered the costs by a factor of ten.

NASA was never challenged and evolved into a bureaucracy, away from its roots: an innovative, daring Engineering organisation. Feynman demonstrated this in the Challenger shuttle explosion investigation.

Monopolies, or Oligopolies, actively suppress competitors, reduce diversity and multiply costs to consumers.
They may be 'private', but they are anti-competitive and economically disastrous for the markets they hold captive.
Think "Too Big to Fail" and the 2008 global financial crash to understand it's more than just goods affected.

Open Source actively prevents the worst outcomes of Capitalism (monopolies & 'captured' markets) and encourages the best that Capitalism has to offer - competition of ideas, 'frictionless' sharing of Information and knowledge and 'lifting all boats' or 'standing on the shoulders of giants'.

Open Source scales up and out, it encourages invention, diversity and novelty and rewards innovation, hard work and risk taking.
Most importantly, it actively prevents asymmetric rewards and 'winner takes all' situations.
It accepts & rewards every small contribution, refinement and step forward, without disadvantaging any competitors.

This is capitalism in action.
It's mass competition within truly free markets, not stultified & stifled by monopolies playing 'rent-seeker' & extracting a premium via their dominant market position.

It rewards Great Design and Good Customer Service and 'empowering' your customers.
It's equitable - valuing your business / services based on what you can do, how good you are and solely on your "Value Proposition" to customers, not some artificially constrained & manipulated market-place.

We've seen this before in the 1960's when Japanese industry knew it might fail and called in W. Edwards Deming. Starting in WWII, Deming had developed and proven a statistically based Quality Improvement model.
Deming's "Quality Circles" transformed Japanese manufacturing, showing up 25 years later when they came to dominate global car manufacturing. Management in the USA thought it was their use of robots, not their embedded Quality Improvement culture which delegated Authority & Responsibility for Quality and Performance to line workers, not 'management'.

Management also accepted & rewarded feedback and improvements from everywhere, not just from the top of the hierarchy.

Open Business _is_ risky: you can't slack off, be complacent or stop Putting the Customer First.
You cannot treat you customers poorly or force them to do what's against their interests, but earns you high profits.

The costs of customers changing providers, or your customers 'substituting' your product with another, are very low.
Open Source lowers the barriers of entry for new players, allowing real Free Markets to operate, encouraging micro-businesses to disrupt large, established players. It doesn't seek to trap customers somewhere, then extract onerous charges 'because we can'.

A simplistic analysis might brand Open Source "socialist", but it is the precise opposite.

Open Source underpins fierce, wide-spread competition, while allowing customers to drive innovation with their needs and to benefit from development by all competitors.
Open Source truly levels the playing field, allowing anyone to make a living based on their skills, talent and capability, not an inherited legacy, position or privilege.

Open Source is an unfamiliar model to many:
  it's fierce competition, that embraces sharing, egalitarian market access and equitable rewards for contribution and industry.

Competitive Open Source is only unappealing to those who think that inequitable rewards are desirable and "winner takes all" produces desirable economic, national and social outcomes. If you want to get rich by exploiting a market position, Open Source won't appeal to you.

Open Source allows many to share in the Digital and Real Economy, to gain the rewards of the Free Market and to be exposed to the downsides and risks of failing to create and maintain "passionate users".
It's the Epitome of Adam Smith's Free Market, not anything else.
Sharing source code removes information-based market distortions: all sellers and buyers have full market information.

Google, Facebook and Amazon got huge on the back of Open Source and actively contribute their work back.
Notable, not _all_ their work, but key parts.
Google has given away the Android O/S for the better part of a decade - as a public good to build the Industry, not force people into trade-offs and sub-optimal choices. Microsoft, via key patents, makes more than Google from Android sales.

These big Internet companies have huge turnovers, have made their shareholders rich and are known for being fiercely competitive. Their success is based on Open Source and they know this, actively supporting developers & projects and contributing back.

To characterise their commercial success as solely due to Open Source, or within the reach of every 2-person start-up is disingenuous. For every super-large Open Source business, there are tens of thousands of failed startups, thousands of short-lived businesses, hundreds of sustainable mid-scale businesses and a large community of individuals that share and benefit in the work over time.

Open sharing of Source Code, Data, Documents and Processes is driven in the short-term by profitable commercial activity or altruism funded by research grants or personal interest and exertion.

In the long-term, we know from Google, Facebook et al (and foundations like 'Apache' and 'GNU'/'FSF'), that money is the fuel for Open Source development - and that is mainly contributed 'in kind' by big corporates acting in their own commercial interests.

IBM, HP, Redhat & Canonical/ubuntu, even Intel and Microsoft, collectively spend billions each year on software & testing they seemingly 'just' give away. Each of these businesses know precisely their costs and are hard-nosed about every dollar spent. For them, this is not philanthropy, it's a marketing or engineering investment that repays itself many-fold.

If large Corporations at the heart of the US economy think Open Source makes financial, business and marketing sense, then what is everyone else missing?

In 2016, we have data on the outcomes of Open Source going back 40 years to the wide-spread sharing of Unix code & utilities.
Whilst the UCB team that delivered the BSD distribution closed down, they continued for as long as they did because of the commercial value realised elsewhere. You can trace the success of the Internet back to the TPC/IP work embodied in "BSD Sockets" and taken up and reused almost everywhere, for free, including Microsoft. That was just one DARPA grant of many.

BSD's descendants are active and still power commercial enterprises.

Money makes the world go round and Open Source generates stunningly large sales and profits for those smart enough to embrace it and realise it confers a competitive advantage. It's just good business.

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