Why Open Source is Hard for Closed Source Vendors (Alpha Release)

It is difficult for many closed source software vendors to embrace open source. Why is this so? After all, over the last years we have come to understand the many business benefits of employing open source as part of a software vendor’s strategy toolbox. In this presentation, I make a first attempt at answering this question (and also include a few remedies). In a nutshell,

open source is hard for closed source vendors, (1) because they have a different risk/reward profile than startups and have a higher fear around legal uncertainties, (2) because they would have to undergo substantial and painful organizational change, easily involving lay-offs, and (3) because current sales incentives are not set up to support cross-selling open source.

This presentation is an alpha release, which is to say, I doubt I’ve nailed it all. Please tell me what you think I’ve missed or where you dis/agree with my thoughts! Because of this, I maintain full copyright of the presentation. Later revisions will hopefully include your feedback (and give proper credits) and will be released under the Creative Commons BY-SA 3.0 license.

The presentation is available as a PDF file.

12 Replies to “Why Open Source is Hard for Closed Source Vendors (Alpha Release)”

  1. Which closed source vendors do you think have problems using open source? Seems to be all of the major software vendors are big time users of open source software.

  2. @Ian: Thanks for the comment. I think using open source components in a closed offering is getting less controversial, but even there in my observation uncertainties remain around how to couple with GPL’ed code if to couple at all. I have talked with many companies, but I don’t want to give names, for obvious reasons.
    The more interesting question to me is why so many closed source companies aren’t opening up if it is for the benefit of their business. Don’t they understand or are there real obstacles? Why not choose an open source strategy? Why not support an open source project that helps your revenue? That’s what this talk is about.

  3. Love the preso, it needs more info on the solutions if you’re going to just post it on the web without any kind of video/audio of yourself presenting. I understand that in-person you cover this very well but in a web preso you lose the context.
    Not to be a bigot, but a presentation about open source that’s copyrighted? =) Try Creative Commons BY-NC-SA, it’s probably more inline with what you want to do.

  4. @rybolov
    All of FLOSS software (and documents) are copyrighted. If not, they would be in the public domain, which is a different beast entirely 🙂 And your proposed license, BY-NC-SA, is actually non-free (due to the NC clause) whereas the BY-SA that Dirk plans to use is (it’s pretty much a GPL analog).
    I’m assuming you have talking points for this, but it seems rather vague at the moment:
    page 5
    Legal: Reduce threats from patent infringement lawsuits
    page 13, Fear of Retaliation:
    how different is this from patent infringement worries? Would this be more about business retaliation by the previous suppliers, e.g. how Microsoft and Intel have been accused of strong-arming their clients into not attempting cheaper competing solutions?

  5. @Michel S. Thanks for the comments! Yes, on page 13 I talk about business (strategy) retaliation. Oracle’s support for Linux might lead Microsoft to support open source databases (if it weren’t for SQL server).

  6. @Dirk
    Well, outside the database world, we do see an alignment of Red Hat and Oracle, on one side (both standardizing on RHEL and Java, though competitors in the two segments), and Microsoft and Novell on the other hand (collaboration on .NET/Mono, interoperability agreements elsewhere).
    The database situation is rather intriguing: depending on what the regulators have to say, PostgreSQL will soon be the only major independent RDBMS, and only two tech giants (Oracle and MS) would have effective control over most of the database market.

  7. sorry to say, but i think you are looking at it from the wrong angle.
    it is not about oss or not.
    it is about making money. and then it comes down to “why would they?” rather than “why dont they?”.
    and i would say many do embrace open source. when and if it makes sense.

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