Section 7.1. Introduction

7.1. Introduction

We are missing the point. Yes, open source imposes dramatic changes on the software industry, and yes, it is roiling the fortunes of many an established vendor. It will continue to do so, and at an increased pace. Yet despite the sometimes anguished, sometimes giddy reception that open source has provoked in the IT world, open source is not novel. It is not odd.

Open source is simply the software world's mechanism for becoming just like everything else.

All the world's a commodityor a service to support and distribute commodities: this book that you are reading, the chair that supports you, the restaurant you will eat at tonighteverythingincluding, increasingly, software, thanks to open source. Open source accelerates the natural progress of software toward commodification, or standardization.

It is critical that IT vendors understand this so that they can deploy (or fight, if they so choose) open source effectively, and more intelligently choose how and where to innovate. Open source does not destroy all value in software innovation; instead, it shifts the control point from the code itself to the creator of the code. In so doing, open source software will not pillage all closed source software. As in other industries, there will continue to be plenty of room for upmarket vendors (e.g., Whole Foods in grocery retailing; Starbucks in coffee; and Nordstom in retail clothing).

That said, there is no room for middling and muddling. Open source will commodify from the bottom up while "upmarket" vendors will dominate "up the stack." Everything else will be a wasteland. Just as Safeway finds itself pummeled by Wal-Mart and Whole Foods so, too, will middle-ground IT vendors find themselves grasping at a dwindling market opportunity.

Open source offers hope, but perhaps not for the reasons normally associated with it. Much has been made about the open source revolution, and with good reason. But perhaps the best reason has little to do with development of source code, and instead has much to do with distribution, marketing, and sales. In other words, what we thought was a software development methodology may have far more importance as a business strategy that undercuts competitors while driving down costs and shifting control to buyers. In such a world, those who understand and leverage open source commodification (or escape it) will thriveeveryone else will be marginalized into economic oblivion. Commodification, the highest stage of capitalism; open source, the highest stage of software.