Friday, December 03, 2004

Software2005: Open and Loosely Joined

Software2005: Open and Loosely Joined
In the near future, what trends can we anticipate within the software sector? It seems that you can’t read the table of contents in a technology-related trade magazine these days and not find an article about the growing open-source software phenomenon. So why is there a for-profit interest in a topic that’s most often associated with the word FREE?

Applying logic might suggest to us that there's zero-profit likely to be made in free software. On the surface, the open-source movement appears to defy basic economic principles. But, perhaps that flawed notion is where much of the confusion about this evolving commercial ecosystem might originate. As an example, using the source code might not require a purchase, but the creation and ongoing development certainly wasn't free of costs that someone, somewhere, absorbed either directly or indirectly in the process.

Also, contrary to popular belief, those costs can be significant and in some cases relatively easy to quantify. A case in point, IBM knows that the company invested $40 million in the development of Eclipse before it turned the software project over -- as open-source -- to the Eclipse Foundation. You think that's a big number? This year IBM agreed to take it's lightweight database technology called Cloudscape, which has been renamed to Derby, and contribute it as open-source to the Apache Software Foundation. IBM's, and other previous owners, estimated total investment in Cloudscape development, about $85 million.

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