Section 7.6. Conclusion

7.6. Conclusion

Open source propels software toward Commodity Land, a happy place where customers pay for real value and vendors compete on that value, not intellectual property lock-in. Each of the open source business models detailed in this chapter will help to further this trend, making open source mainstream and possibly displacing the traditional, IP-based model as the default.

We are thus on the cusp of a Kuhnian paradigm shift, one that will fundamentally alter the way IT vendors create, sell, and distribute software. Once apparently stymied by the restrictions that open source licensing places on traditional business practices by IT vendors, open source vendors are now finding that open source licensing creates as many opportunities as it closes, changing the nature of software competition for decades to come. This means that incumbent and emerging IT vendors must understand the new rules of engagement to compete effectively. Whether they like to admit it or not, open source will force every software vendor to come to grips with omnipresent, ravenous commodification.

Some may opt for technical innovation over business model innovation, with varying degrees of success. However, such innovators should recognize that while copyright and patent provide potent protections, they also put the vendor in an adversarial relationship with the customer. As such, these traditional intellectual property tools hurt customers as much as (or more than) they do competitors, and will put them at a disadvantage against open source competitors who offer customers choice and value at lower prices. Open source, then, allows vendors to lay waste to their competitors' profit margins by lowering their own costs of distribution, sales, marketing, and development, while simultaneously blessing their customers with increased IT flexibility and a more finely tailored approach to solving their business problems.

Open source, then, offers a new way to innovate, a new way to compete, and a new way to win.