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What is Open Source?

Open Source Software (OSS) is a method of developing and licensing software which affords the people who have the software the right to read, redistribute, modify, and use the software freely. This means that when you download (or get from a CD) your copy of the Apache webserver (for instance) that you can read the code behind the software, edit the code (eg. fix bugs, add features), and redistribute the code to whomever you want.

That is all fine and good, but I am not a programmer or my organization does not have access to programming resources, why do I care?

While in certain parts of the world, for certain people, the low cost (meaning 0$) for OSS is certainly attractive, but if you are from most parts of the world then piracy has dropped the price of most proprietary software to near free, so the price consideration may not be important. This does not mean that OSS is not beneficial to those for whom the price consideration does not make a difference.

1. Hardware Cost: Corporations like Microsoft (MS) release bloated software packages every few years. In order to run the latest and greatest version of Windows or Office you often need to upgrade your hardware. Many OSS packages work on hardware that is years old. This is a price savings wherever you are.

2. Support Cost: Most people inevitably run into a situation where they need some technical support. While there are some companies which provide OSS technical support, there are many lively online forums where people can read about other people's experiences, post questions, etc. Although this support is sometimes inferior to professional technical support, it is always free.

3. Interoperability: When your friend upgrades their software to Office XP and e-mails you a .doc file containing their next great business idea and you're still running Office 97 you will feel the pain as Office 97 is unable to read the .doc file. OSS is developed on open standards and is reliably interoperable. While you may like to write your documents in AbiWord, your friend may use OpenOffice, this difference does not cause problems as AbiWord and OpenOffice can read each other's files.

4. Indefinite Support: If you are a small business and have all of your financial records stored in some old DOS program whose vendor has gone out of business or been acquired, then you may know that feeling of pain when the lack of support for your software package drives you towards the painful process of moving all your records from your current software to some new program. With OSS you have several options. If through some strange bout of bad luck no one else on Earth has this problem (probably a rare scenario), then you can hire some young hacker to write a program to a) write a script to transfer the data between the two programs or b) fix the bugs and add the features you need. If neither of these options is economicall viable you still have the proprietary solution of hand entering all your data. For larger businesses the comparative advantage is even larger as the cost of switching is more likely to be higher then the cost of keeping what you have.

5. Fear of Anti-Piracy Measures: So your friend has been giving you a free copy of the latest Windows software for years, or your neighborhood CD store sell hacked bootlegs of some pricey accounting software, what happens when they get their anti-piracy methods right? There may come a time in the future where Bill Gates and the folks at Intuit (makers of QuickBooks Pro) figure out how to prevent you from getting your free (or near 0$ cost) copies. This could make those "empty" price concerns a reality.

6. Native Language Support and Small Markets: Although this does not apply to everyone everywhere, it is a concern to many "small market" countries. Large software manufacturers like Microsoft or Intuit are not going to target small markets like Armenia. These markets will not have access to native language support unless people inside the country provide it. Getting permission to localize Windows for Armenia may be near impossible, but OSS is by its very nature is always available to be localized.

I'm a software manufacturer, how do I make a profit by manufacturing OSS

Even major software firms like SAP, ORACLE, and Microsoft don't make all (or in some cases even most *) of their money from software licensing. These companies make a lot of their money through services associated with their products. SAP and ORACLE customize applications with their software. Microsoft makes money through certifications, customer service, and other service oriented contracts. These are three giants in the field who have the time and energy to implement copy protection schemes and try to hunt down organizations which violate their licensing agreements. Most small organizations don't have the time or the resources to do that.

There are several different Open Source business models, each demonstrated by a combination business/software package.

Distribution and Services: RedHat software has been in the black for a little while now. Their model relies on selling server and desktop distributions of Linux (with documentation), offering certifications and training, and developing solutions on top of Linux.

Mixed Licensing: SleepyCat Software manufacturers of Berkeley DB (a small database program underlying many other software packages) uses a dual licensing scheme to make money. On the one hand they release their software under the GPL, one of the major open source licenses. They also sell their software under a closed source license which allows commercial customers to develop their software without having to follow the stipulations of the GPL.

Services Model: Zope Corporation creates a Web and Python based community system aptly called Zope. While their software is freely available for download, they turn a profit by building custom web applications, like a Content Management System for SGI.

Hardware and Support: IBM and Hewlett-Packard two of the world's largest technical firms are already making money with Linux *. They sell hardware and technical support to make their $3.5 billion in revenue.

*http://www.computerzeitung.de/index_b (sorry folks, it's in German).

*http://cin.earthweb.com/news/article.php/1574431

Well ok, the benefits to consumers are readily apparent, but what are the benefits to software suppliers?

Check out our document on Provider Benefits.

What is the difference between Open Source and Free Software?

The Open Source and Free Software use two different methods to reach very similar conclusions about software development. The difference is best summed up by saying, Open source is a development methodology; free software is a social movement.".

It is a common misconception that the Free Software movement is supported by anarchists, communists, and other anti-business people. The Free Software movement wants to treat code like a book. What use is a book if it is never read by anyone? Code can help people to learn new ideas, gain new intuitions, and even to help change their principles. They're calling card is that software should be "Free as in Speech".

The Open Source people focus on the quality of the software generated by Open Source means. They are typically considered more business friendly although both groups believe that engineers can charge for their work. They are famous for saying that software should be "Free as in Beer", after all .. consumers would like it if beer were free.

How old is the Open Source Movement?

Some might say that the Open Source Movement is as old as computing itself. During the first days of computing code was freely shared and modified. It wasn't until the late 60's and early 70's that proprietary software became the dominant model. In the mid-80's Richard Stallman left the MIT AI Lab and founded the Free Software Foundation. He and some other like minded programmers were trying to develop a Unix clone built entirely as Free Software. Although many important programs like GCC (GNU Cross Compiler) and EMACS (the world's greatest editor were developed, they never finished the GNU project. In October 91 a CIS student in Finland named Linus Torvalds posted to a Usenet group indicating that he was porting the Minix kernel to x86 hardware (post). With the creation of the World Wide Web, the release of Linux, the prior work of the GNU project, and with Microsoft's anti-competitive behaviour picking up steam, the stage was set for the return to an early computer age style of collaboration. In the 7 years that followed what was called the Open Source Movement was still identified as the Free Software Movement. It wasn't until Erik Raymond coined the term Open Source in March of 1998 and popularized the concept with the release of the paper "The Cathedral and the Bazaar" which compared Open Source and Proprietary methods of software development.