Open Source

Nice article by Umair Hacque on the shift in platform economics as the underlying technology moves from closed to open, and as the convergence / consolidation increases:

Today, platform wars ain't what they used to be. On the one hand, there's Facebook - playing a textbook game of platform strategy, but slowly suffocating the utility of its own network. On the other, there's Apple - ignoring many of the rules of platform strategy, but radically redesigning the long-suffering mobile value chain with the iPhone App Store.

I think calling Apple an "open" market is a misnomer - the iTunes end to end value chain is pretty locked down, which is Apple's traditional approach - an iConic consumer device with a locked down supply chain behind it. Nonetheless, I think Umair is directionally correct when he notes that:

Let me advance a simplifying proposition: platforms are markets. The most useful way to think about platforms today is simply as markets.

The App Store's name is revealing: it tells us that Apple doesn't see a platform to be manipulated, but a market to be made. It is that understanding that's at the heart of Apple's furious domination of the mediascape.

We have done quite a lot of work with various clients in the last year or so on how platforms can best be operated as market ecosystems, but (frustratingly) are bound by NDA's in various areas - but one can always nod vigorously (albeit raising the eyebrow to temper the Apple-o-philia) when Umair notes that:

- Markets alter the basis of competition. Apple took something terminally closed - the mobile value chain -and pried it radically open. Facebook - still thinking in yesterday's terms - took something radically open - the www - and is trying to make it a little bit more closed.

- Markets cause strategic domino effects. Markets are strategically radical: once the basis of competition has been altered, an economic tsunami is unleashed, often unstoppable. The dynamics of competition shift irrevocably.

- Markets atomize the value chain. The App Store is radical, ultimately, because it atomizes the value chain: where once a handful of scale-driven players could produce and distribute mobile apps, today, any number of players can enter. What was once monolithic is shattered into a million pieces. If the market can coordinate those millions of pieces effectively, the new value chain is hyperefficient.

(As an aside, this is also our view with approaches such as VRM - until they create new market forms, we think it will be hard for it to get traction).

[ Update - I think its necessary to make clear that market here - in my view - does not imply just a simple buy/sell relationship. More that it is open to trading, in a range of models, from a variety of players. I think the word ecosystem - where eco is also for economy - is possibly the better word, which is what I tend to use - but Umairs' phrase is more pithy]

As we also showed in our work 2 years ago on Advertising models for Telcos, the convergence also forces different business models onto hitherto safe platforms - so media ad -based models start to impinge on Telco rental models (hence Blyk, for example).

I'll let Umair end off this post with another point, which I will discuss in more detail in a later post and at the O'Reilly Web 2.0 Expo in Berlin.

This conclusion also helps us answer another critical question on the minds of today's investors, entrepreneurs, and would-be revolutionaries: when will today's crop of startups start making serious cash? The answer: when they shift from platform logic to market logic.

Quite - ending FreeConomics and charging money will create an Akerlofian revolution, and allow quality to chase crap out of so many of the digital 2.0 markets.

I was reading Confused of Calcutta's post on Open Source Leadership (or its lack), and was struck buy these paragraphs: Firstly, an excellent definition of Open Source:

Opensource is about democratised innovation, about creating value faster than via traditional models. It is about better code, about Linus’s Law, Given Enough Eyeballs All Bugs Are Shallow. It is about lowering the cost of failure by its peculiar compartmentalisation. It is about creating affordable operating systems and software for the millions, the billions, that are underconnected because of closedsource operating models and business approaches. Opensource is about choice, choice shown in the very way the community moves and adapts and forks.

But the issue was that:

As leaders [of Open Source], we allowed ourselves to be drawn into the wrong debate. As Richard Stallman said, opensource was never about free as in gratis; it was about free as in freedom. Yet supporters of opensource were quickly labelled as pinko lefty treehuggers, and we allowed that meaning to persist. Very quickly, opensource supporters were anti-capitalist idealistic utopian dreamers, while the rest of the world churned out the stuff that mattered. Apparently.

With the result that:

Yet for years we left so much of the value of opensource on the table, value that was denied everyone, from the BRIC individual to the large corporation. Those of us who call ourselves leaders have only ourselves to blame for that.

JP is correct imho when he says that this reflects badly on the movement's leaders, in that:

Leadership is about taking the risk of managing meaning

But, and with all respect to JP, I see the origin story of Open Source slightly differently - I think Andrew Orlowski of The Register was more on target when he noted that the Web 2.0 memeplex (Open Source being a big part of it) was initially largely supported by people who probably did want to believe in pinko treehugging utopias etc in that it:

makes enough sense to get past your analytical faculties, is all embracing and unspecific enough for loads of people's dreams, fantasies and so on to be projected into it

And the movement's leaders let that happen in the early days as it needed to get its core of supporters etc (and if that was the idealism that drove many people to spend their "free" time writing code, so be it). The problem then being that when it has to think about how to capture the value on the table, there is a huge amount of baggage.

If I can paraphrase this in Geoffrey Moore's "crossing the chasm" terms - its not just individual technologies that go through that painful readjustment when they have to move from Early Adopter to Early Mass market - I think philosophies and movements have to do the same.

And to JP's points on the same issues facing IPR and Identity (and Net Neutrality to boot), I think the risk is the same - the early leaders in these segments are again letting the core principles of Next Gen IPR and Identity be hijacked by the idealists who are cleaving to it in its Early Adopter phase. I've written quite a bit on the risks of getting hijacked by the "Freetard" community before ( Freetards are those who conflate Free rights and identity with Free goods - i.e. paying nothing ) - start here with this article on the Limits to Freeconomics - so there is also a risk of these ideas being hijacked by the Utopian Fringe.

The problem of course, is that many of these Utopians are the dreamers and idealists who got in early and inspired so many others to join the movement in the first place. Without these enthusiastic early adopters, these ideas would never get off the ground to be in a position where the leaders do have to grasp the nettles.

So what to do?

I think JP is right - it behooves the leaders of these communities to come clean early, learn the lessons from Open Source's travails, and start to disown, gently but firmly, the more impractical views of the utopians some time before the Chasm looms on the Event Horizon. And if the current crop of leaders won't or can't (as frequently they are too close to the Idealists) then another cadre must.

To take back the management of the meaning......

Success or failure in this task probably determines whether a movement crosses the Chasm, or crashes in the attempt.

An afterthought - maybe the largest amount of courage ever shown is by early leaders to realise they are not the people to take things forward?

From Larry Lessig's Blog, good news for the Creative Commons type of licences - the US "IP Court" has upheld open source copyright licences:

In non-technical terms, the Court has held that free licenses such as the CC licenses set conditions (rather than covenants) on the use of copyrighted work. When you violate the condition, the license disappears, meaning you're simply a copyright infringer. This is the theory of the GPL and all CC licenses. Put precisely, whether or not they are also contracts, they are copyright licenses which expire if you fail to abide by the terms of the license.

So, for those who scrape this blog and on-sell for profit..... you are now a copyright infringer and...we can sue!

Firefox wishes to set a record for number of downloads of FireFox 3 (and in the process get a large lump of users of course). Sez the Beeb:

With the release, Firefox developer Mozilla is attempting to set a record for the most downloads over 24 hours.

"It's a global effort to make history," said Paul Kim, head of marketing at Mozilla.

We use Firefox, but heed some Broadsight advice - being first is all very nice, but hold your horses unless you want a few days (weeks?) of inconvenience - the very early adopters are always a part of the Debug Crew

From Marc Andreessen, commenting on the days of the early Internet in Vanity Fair:

“When Al Gore says that he created the Internet, he means that he funded these four national supercomputing centers. Federal funding was critical. I tease my libertarian friends—they all think the Internet is the greatest thing. And I’m like, Yeah, thanks to government funding.”

Exquisite

Still trying to work out What It All Means when Vanity Fair runs a 9 pager on The Internet. The Convergence clearly goes further than I thought - I look forward to the first reviews of the Paris catwalks on TechCrunch.

Edmund Burke noted that:

“The only thing necessary for the triumph of evil is for good men to do nothing.”

There was a post on Techdirt that to my mind exemplifies how this will play out in the Open Source world - as it becomes more valuable, commercial interests are increasingly trying to subvert its precepts.

One of the recent Open Source issues was the Skype attempt to avoid the implications of having some of its code under GPL, and avoid having to release their adds to it. They have since backed down on this, as it was a fairly easily defendable direct contradiction of the terms of the GPL - see more here on Groklaw.

What interested me about the Techdirt piece is I think it shows the way the commercial interests will now try and play the game, by chipping away at the rationale for strong Open Source Licences, and trying to subvert by overt reasonability, but with a clear subtext - what I have previously called the 3-cup-shuffle tactic: I extract the following lines from the piece to show examples:

But even if the (GPL) license was invalidated, either in this case or another, there's an argument to be made that the GPL has already served its purpose...

....But today, with open source firmly established as a cultural and commercial force, the GPL's relevance may be waning...

....And an increasing number of very high profile projects, like Mozilla, Apache and Open Office, have seen fit to create their own licenses or employ the less restrictive LGPL.

If you read the original, these lines are thrown into paragraphs which sound very reasonable...but the thrust is clear - we don't need to have GPL anymore, Open Source freedom is assured etc etc, we can let up a bit, we're all reasonable people after all - and those Open Source people are such Zealots, no?.

Wikipedia lists the percentage of GPLed projects on Sourceforge.net and Freshmeat.net, two large open source software repositories, as 68% and 65%, respectively, as of November '03 and January '06. Today, the most recently available numbers show that Sourceforge's share has fallen to 65%, and Freshmeat's share has fallen to to 62%.

This is, of course, a small decline, and the GPL remains the world's most popular open source license by a considerable margin. But it does seem as though there may be a slowly decreasing appetite for the license's militant approach to copyleft ideals

I certainly don't wish Skype well in its probably-quixotic tilt at the GPL, but if they were to somehow get lucky at least they'd be doing so at a point in the open source movement's history when the GPL is decreasingly essential.

You can see the line taken - Militant? Copyleft. We're all reasonable people here chaps, right - lets see if we can reach a compromise......

At this point you hopefully wake up from the spell and go "Waiitaminute - it wasn't broken - why are we compromising here again"?

Hopefully.

Sadly, the usual outcome is that a lobby of a few organised parties can usually walk off with the spoils from under the noses of the disorganised, distracted masses.

I have written a few articles recently on the increasing commercialisation of the Open Source world (see here for example) and not everyone is happy with this

However, in my defence, its not just me commenting on the trend - Nick Carr writes about Linux today:

There's nothing particularly surprising in the shift from the volunteer to the corporate model - it tends to be what happens when lots of money enters the picture - but it does reveal that while Net-based "social production" efforts may be unprecedented in their scale and unusual in their technology-mediated structure, they are no more immune, or even resistant, to being incorporated into established market systems than any other type of labor that produces commercially valuable goods. The shift in Linux kernel development from unpaid to paid labor, from volunteers to employees, suggests that the Net doesn't necessarily weaken the hand of central management or repeal old truths about business organization.

No doubt not everyone will be happy with Nick either

It is with some regret I read of the emergence of good old Olde Worlde economics into the Open Source bubbleworld. From Computing:

Officials at Sun Microsystems Inc., which acquired MySQL in February, confirmed that new online backup capabilities now under development will be offered only to MySQL Enterprise customers — not to the much larger number of users of the free MySQL Community edition.

The plan was detailed during meetings at MySQL's annual user conference in Santa Clara, Calif., during which Sun also delayed until late June the release of a MySQL 5.1 upgrade in order to iron out some remaining bugs.

This is the second dust-up between MySQL and its users in the past eight months. Last August, an earlier decision to stop making the MySQL Enterprise source code openly available to users without paid subscriptions drew criticism from some members of the MySQL community.

In other words, so long and thanks for all the long free hours, guys, but its our toy now.......... I bet that makes all those contrbutors over the years want to really get up and help tomorrow morning.

Not that this wasn't all predictable of course (here we are predicting it for example), just sad to see it happen. The real lesson of these collaborative work projects is that too often, eventually a small cadre of people seem to grab the project, grab all the loot, and run off with it - and the dispersed, disorganised and dispossessed "community" can do little about it.

However, the risk Sun takes in messing with the LAMP architecture stack is that it misunderstands not the mood of the community, but the impact of a kickback:

....user Paul Saduauskas threatened to abandon MySQL in favor of rival open-source databases in response to the hoarding of features for the enterprise version. For instance, Saduauskas said that the PostgreSQL database is "fast enough these days" and is "much more standards-compliant" than MySQL is....

...."Free software developers (including myself) are a fickle bunch, and can jump ship or fork a project with startling speed."

A lot of those free installations out there are driven by sentimental, not contractual, value - replacing MySQL with a new OS system would be a labour of love if Sun p*ssed all these people off - or even worse, if the companies using it felt that they would have to pay for support in the future, or be held over a barrel.

And the impact is more subtle than Sun may be expecting, as there is a system dynamic going on here - if people no longer love MySQL, it means collaborative community support goes away, which means more risk for any one user, which means a need to de-risk, which, allied to (i) a righteous indignation plus (ii) an opportunity to play with cool new stuff, could lead to a -ve cycle for MySQL quite rapidly.

And once its out the LAMP stack, w(h)ither then?

Jus' Saying......

Update - it appears Slashdot's finest, me and Computerworld woz wrong re Sun's intentions, or at least Sun has clarified matters here ...and here .... and here ....457 comments later and counting

Well, one way is to write a report on it and charge $1,000 a throw for the report

"Open Source software is raising havoc throughout the software market. It is the ultimate in disruptive technology, and while to it is only 6% of estimated trillion dollars IT budgeted annually, it represents a real loss of $60 billion in annual revenues to software companies," said Jim Johnson, Chairman, The Standish Group International"

I'd have been more comfortable with a range of values though......I can't believe that at this stage this isn't a hugely SWAG game

Thanks for link to Simon Wardley

There is an article in Wired Magazine on the newly emerging trend for Open Source Millionaires.

In 2007, some 30 open source software companies were purchased for more than $1 billion — double the number of sales in 2005, according to consulting firm 451 Group. And 2008 is proving to be even more frenetic. In January alone, Sun Microsystems announced the purchase of open source pioneer MySQL for $1 billion

The key line to me, though, is at the end of the article, about how this monetisation impacts the Open Source collaboration model:

More important, software makers depend on the goodwill of outside developers, whom they rely on to keep updating their products. So the new open source billionaires might want to think twice about going 767 for 767 with the Google guys. For the coder drones, accustomed to being paid in warm feelings, such displays might make them take their coding skills elsewhere.

I'd call this the Billy Bragg Offset Economics Experience - the software creators dedicate their labour for free in the belief that they are creating a Brave New World, just to find that its Animal Farm and they're just the code-monkeys - and a very small number of people have potentially managed to get into a position to walk away with all the created common wealth at the monetisation event.

Now it can be a bit hard to follow, because the Open Source model relies not so much on the economics of "free" as the economics of "offset" (ie paying for it in some other way, including coder time subsidised by their actual employers), and, like in a game of 3-cup shuffle, the money is being moved around in new ways so that its harder to follow it - until someone walks off with it, of course.

There is, at the end of the day, no such thing as a free lunch, even in the "everything is free" internet.

And here's a tip - if you ain't eating at the table, you're doing the paying......while you maybe wait at it too,

So Caveat coder...