FLOSS, The Right Way to do IT, Even for Business

I am often told businesses have a duty/right/imperative to keep source code hidden for business reasons, to maximize profits. That’s not so. The benefits of sharing the code are real and large for businesses:

  • sharing the cost of development of code,
  • tapping a larger pool of users and bug-reports,
  • selling services rather than licences, and
  • having better input/feedback from users.

We have seen major examples of business choosing to convert their source code to GPL or other FLOSS licences before:

  • Sun Microsystems and StarOffice evolving into OpenOffice.org,
  • MySQL database management system,
  • Netscape web browser became FireFox, and lately
  • Citrix bought Cloud.com and released the source code to Apache Foundation.

It’s clear that selling licences only limits a business’ opportunities in the market. To really be a partner with the users is a huge advantage for business. Look at Google and Android/Linux. Google makes little or no money from distributing the source code but hundreds of millions of people love Google for providing great software for smart thingies and Google’s paying customers, advertisers, know that and give Google tons of business because of that cozy relationship. It would be irrational for Google to hide the source code and break the spell… OEMs love/trust Google because they can see the code and know Google is not messing with them. Consumers can buy great products at great prices because of that trust between Google and OEMs. Sharing is good for business.

H-online reviews some of the reasons business open the source code:

“If the UNIX companies had learnt anything from the UNIX wars, it was that proprietary operating systems, even if they are your own, cost money and create hurdles for other parts of your business. The arrival of GNU/Linux opened up new possibilities. There was an obligation to share, and a mutual advantage to be gained. The release of core chunks of corporate code accelerated the development of Linux and ensured its success in the enterprise, enhanced by its scalability across a wide range of hardware.”

see Giving the code away – The H Open: News and Features.

About Robert Pogson

I am a retired teacher in Canada. I taught in the subject areas where I have worked for almost forty years: maths, physics, chemistry and computers. I love hunting, fishing, picking berries and mushrooms, too.
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25 Responses to FLOSS, The Right Way to do IT, Even for Business

  1. Clarence Moon says:

    Walmart’s best-sellers

    At first glance, that seems like a valid “proof” of your claim, namey that Walmart sells more Linux than Windows. But your enumeration of models offered evokes some questions.

    For one, does Walmart actually stock that many models of Linux computers? Or Windows computers for that matter? It seems to me that this is not a “retail shelf” sort of thing in any case, merely a litany of ID numbers. It boggles the mind to contemplate walking into a store and seeing 500+ units on display.

    With so many models on offer, though, it is not at all clear just how significant it is to be the most popular. That could be only a small number since whatever is being sold is prorated over such a large number of choices.

    Even so, the preponderance of the evidence is that Walmart does sell more Linux in Brazil, at least on-line, than Windows, but it is not terribly evident as to how much. Also, no evidence that Walmart is a major distributor of computers in Brazil. They are not such a big deal in North America, so it is hard to draw conclusions.

  2. oldman wrote, ” this is just a count of the number of systems listed. It says nothing about sales.”

    Huh? They sell more types of GNU/Linux systems than that other OS and their top sellers are not that other OS. There’s no surprise in that. The top few best sellers are GNU/Linux systems if you visit their site by clicking the link.

  3. oldman says:

    “Walmart’s best-sellers”

    Pog, this is just a count of the number of systems listed. It says nothing about sales.

  4. Clarence Moon wrote, “Can you actually prove that with some sort of credible cite? Or are you just projecting some ratio of hits on Google or similar?”

    Walmart’s best-sellers

    The top 3 are “Linux”. 5,6,7 are “Linux”. Do the maths.

    Here’s their break-out:
    “Operating System
    Windows 7 Starter Edition (71)
    Windows 7 Home Basic (80)
    Windows 7 Home Premium (25)
    Linux (384)”

  5. kozmcrae says:

    Clarence wrote:

    “Can you actually prove that with some sort of credible cite?”

    When has “proving” something made any difference to you?

  6. Clarence Moon says:

    Walmart in Brazil sells more GNU/Linux boxes than that other OS, for instance.

    Can you actually prove that with some sort of credible cite? Or are you just projecting some ratio of hits on Google or similar?

  7. Clarence Moon says:

    Therefor it is a lie to suggest or imply that all retailers don’t sell GNU/Linux

    Well, you continue to miss (or evade) the point, Mr. Pogson. You say that the problem is that retailers do not think that it would be profitable to sell Linux, and I say that no one is doing anything to change that situation. If you now want to say that enough is being done and it is a lie to say that it is not being done, then you are simply retracting your original complaint.

  8. ch says:

    Prices have come down somewhat: These days, Office Home and Student for three PCs can be had for €113 (less than €40 per machine). A single license (if you don’t have more than two machines) would be €88. Windows Home Premium is €83 if bought separetely, OEM prices should be lower. (German retail prices, taxes included. Usually, European prices in € are very similar to US prices in $.) MSE is free. For most of us who can afford to pay €1000 for hardware, adding less than €200 for software isn’t that horrible.

  9. ch wrote, “Windows is as cheap as doesn’t matter to most people”

    That’s what M$ said back in the day when the typical PC was more than $1K. Now that personal computers can be had for ~$100, using software from M$ and “partners” more than doubles the capital cost of IT. The last time I helped a consumer set up a PC, they had spent $1500 on the machine, monitor/keyboard/mouse, printer, anti-malware, an office suite and a printer. The bill for software was nearly $500 (including ~$100 for the OS). So, the consumer could have had the same hardware and used FLOSS for ~$1000. That matters. The performance of many PCs is abysmal, because they use only one hard drive. Investing in multiple hard drives instead of a licence for that other OS makes much more sense.

  10. ch says:

    “Are you saying … ?”

    No, I’m not. I’m just pointing out that people are perfectly willing to pay, say, $5 for a m³ of gravel. Depending on circumstances, some people will even pay $10 although there is another offer at $5 if there is an offsetting advantage: Price is _one_ factor, but it’s not everything.

    And how horrendous are the costs for “raw materials” in Windowsland, anyway? Windows is as cheap as doesn’t matter to most people, and it comes with a pretty darn good framework (.Net). If you’re an amateur programmer, VS Express will probably be all you need. The pros just get VS and a MSDN subscrition and be done with it – yes, it costs money (gasp!), but to them, it’s worth it.

  11. Clarence Moon wrote, “you jump up and say it is a “lie” that “retailers do not sell them.”

    Retailers in my town don’t sell GNU/Linux largely but many in other parts of the world do. Therefor it is a lie to suggest or imply that all retailers don’t sell GNU/Linux. It would be correct to say some or many retailers don’t sell GNU/Linux. Walmart in Brazil sells more GNU/Linux boxes than that other OS, for instance.

  12. Clarence Moon says:

    Clarence Moon repeats his lie that OEMs and retailers do not sell GNU/Linux

    Do they sell them or not, Mr. Pogson?” them. You yourself were complaining that “The major bottleneck at the moment is that retailers have been mesmerized to believe only that other OS sells.” When I agree with that and say, further, that the situation is going to remain that way, you jump up and say it is a “lie” that “retailers do not sell them.

    I think that you are just desperate to believe that Microsoft is somehow being damaged daily in the market place and that is just plain not true. They continue to rake in the shekels and smile as they wend their way to the world’s banks. That clearly offends you, but that is the way that it is.

  13. Clarence Moon repeats his lie that OEMs and retailers do not sell GNU/Linux, “They do not follow your advice, year after year”.

    Lenovo just sold a ton of GNU/Linux PCs to India. Several distros have a bunch of OEMs pre-installing GNU/Linux. Several countries have OEMs that do produce millions of GNU/Linux PCs. Retailers in Brazil, India, China, and Malaysia have no problem selling GNU/Linux PCs. I can even find a few in Canada who do. They don’t sell much at a loss. The OEMs are not as much a problem for FLOSS as the retailers whom M$ has trained as pets.

    On the matter of retailers, consider Walmart, a huge chain. In USA, the home of M$, Walmart does sell 18 books about Ubuntu GNU/Linux and 121 books about GNU/Linux but not one Ubuntu GNU/Linux PC. They sell hundreds of computer-related products certified for GNU/Linux but not one PC. What’s with that? They know there is a market but they do not serve it because of pressure from M$. They do sell a ton of Android/Linux products. That makes no business sense whatsoever. In Canada, walmart.ca returns 0 results for “ubuntu” or “linux”. Why do they serve the market for Ubuntu books in USA but not in Canada, which is far closer to UK/Europe in outlook than USA? That makes no business sense. Walmart in Brazil sells tons of GNU/Linux PCs.

  14. Clarence Moon says:

    Question your assumptions, Clarence.

    Question yours, Mr. Pogson. Microsoft “gives away”
    license fees to schools and charaties as well, but they mostly charge for their wares, just like Kris Kristofferson does.

    The major bottleneck at the moment is that retailers have been mesmerized to believe only that other OS sells. M$ has spread that lie.

    You repeat this thesis over and over, Mr. Pogson, but it seems to me that you, who are not in the retail PC business in any way, are being rather arrogant to suggest that those who do have such businesses are too stupid to know how to run them effectively. They do not follow your advice, year after year, thus you say they are mismanaging them.

    Retailers should be giving retail space to GNU/Linux and advertising the fact. Some do now and it pays them well to do that.

    Those are just empty words, Mr. Pogson. I have never seen that happen in any significant way anywhere and you cannot offer any proof that those who might have done so have been well paid for the effort. Go ahead and cite some web pages from on-line sellers in Timbuktu if you wish, but it is not very compelling. Plus even those sources also feature gobs of Windows computer adds.

  15. ch wrote the nonsense, “Nobody minds paying for raw material, as long as the resulting product can be sold for a price reasonably above that for raw materials.”

    Are you saying that given a pile of gravel selling for $10/m3 and another selling for $5/m3 no one will buy the less expensive gravel or other commodity? That happens all the time in a free market. The problem is M$ and “partners” have set up a non-free market to maximize their profits. There’s no reason the world has to buy from M$ and “partners” except that there are still many who do not realize they have a choice. This blog is partly to make sure that information is found.

  16. Clarence Moon wrote, “a concert singer will not show up to entertain a crowd without being paid”.

    Hmmm. I guess this was just a figment of someone’s imagination:
    Legendary Singer Songwriter Kris Kristofferson To Donate Six Concerts In Celebration Of The United Farm Workers 50th Anniversary

    Question your assumptions, Clarence. People do things to make the world a better place all the time.

    Clarence Moon wrote, “Ask yourself why so few use Linux. The answer is that there is no reason to do so that the users know about. Maybe there is one, maybe not. Next to no one is trying to tell anyone about it.”

    The major bottleneck at the moment is that retailers have been mesmerized to believe only that other OS sells. M$ has spread that lie. Retailers should be giving retail space to GNU/Linux and advertising the fact. Some do now and it pays them well to do that. Others will follow sooner or later. Individual users rarely install an OS, so that is not as large a channel as retail sales. ASUS and other motherboard makers only sell a tiny percentage of motherboards to do-it-yourselfers.

  17. Clarence Moon says:

    The world does not owe M$ nor any software developer a living

    Conversely, the developer does not owe the world any software that they are not willing to pay for, just as a concert singer will not show up to entertain a crowd without being paid or a financial adviser will not tell you what stocks to buy without taking a commission. Sure there are freebie versions of all of that, but you get what you pay for.

    If people do not want to buy Windows, then they can try to figure out how to use Linux on their own for free or else they can find someone who is willing to help them learn without charging them. Or they can weigh the costs of using Windows against the costs of having someone show them how to use Linux. It’s a free country and Microsoft has no monopoly on knowledge.

    Ask yourself why so few use Linux. The answer is that there is no reason to do so that the users know about. Maybe there is one, maybe not. Next to no one is trying to tell anyone about it.

  18. ch says:

    > The reason software should be given away is so that the raw materials for the business can similarly be obtained for $0.

    Why? Nobody minds paying for raw material, as long as the resulting product can be sold for a price reasonably above that for raw materials.

    > The business that creates the software has the inside track on lots of customization work, support work and new versions.

    How exactly do you make money from customization? How many people would pay for that? Yes, for some types of applications (SAP comes to mind) that actually works, but for a lot of others, it doesn’t.

    Similarly with support. Not only can others learn to do support for my code at a lesser cost than I have _producing_ said code, but mostly only businesses are willing to pay for support at all. Rule of thump: If a consumer applications requires support, it’s broken.

    And how exactly does a new version turn into money for me if I don’t sell licenses?

    > By ch’s logic my son is a fool for “giving away” his code.

    He gives the code away for a salary, nothing wrong with that. I earned my money for several years exactly that way. However, how does his employer make his money?

  19. ch wrote, “A company producing software _lives_ from developing code. It’s what they are good at, it’s their area of competence, and they _want_ to do that. Why in the world would they even _want_ to give that work – and the money they make from it – away to others?”

    The reason software should be given away is so that the raw materials for the business can similarly be obtained for $0. Writing software is often importing libraries and exporting a few data structures and user-interfaces. The amount of code a business has to write to create an application is much less that way. Selling licences is only one way to make money from software. The business that creates the software has the inside track on lots of customization work, support work and new versions.

    I have a son who writes software for a living. He does not own the software he writes. It’s all owned by the employer but he saves the business a ton of money by using FLOSS for lots of the inputs. By ch’s logic my son is a fool for “giving away” his code. In fact my son has a good living supporting the code, installing it and designing new uses for old code. Actually writing stuff is now only a fraction of what he does. He’s even on call 24×7 because his employer values all the things he does so much. Last weekend I was with him when he got a call to walk another employee through a process, so he does lots of work that results from writing code but which is not writing code.

  20. ch says:

    > sharing the cost of development of code,

    A company producing software _lives_ from developing code. It’s what they are good at, it’s their area of competence, and they _want_ to do that. Why in the world would they even _want_ to give that work – and the money they make from it – away to others? That’s like telling a plumber that he should let others – not employees but totally independent strangers – do the plumbing. No advantage.

    > tapping a larger pool of users and bug-reports,

    Please explain why the mere fact that something is FLOSS automatically creates a “larger pool of users”. Real world numbers indicate no such linkage (desktop Windows still has more users than desktop Linux, MSO > OOo + LO, etc.). No advantage.

    > selling services rather than licences,

    And what services would that be? Howe many people are willing to pay for those services anything remotely like they pay for licenses today? How much have _you_ paid for such services in the past?

    Besides, with FLOSS everybody else could offer those services, too, and at a cheaper price because they wouldn’t have to figure the development cost into their prices.

    > having better input/feedback from users

    Please explain why the mere fact that something is FLOSS automatically creates “better input/feedback from users”. Do you have any idea about the input/feedback that Microsoft, for example, gets from users? Take a look:

    http://blogs.msdn.com/b/jensenh/archive/2006/04/05/568947.aspx

    Quote: “… particularly, we get so much Word and Outlook data that 70% of it is thrown away.”

    (The series is continued here:
    http://blogs.msdn.com/b/jensenh/archive/2006/04/07/570798.aspx )

    So once again no advantage in going FLOSS.

    > Sun Microsystems and StarOffice evolving into OpenOffice.org,

    and Sun evolved into … ? Not a good example, I’ld say.

    > Netscape web browser became FireFox

    And Netscape became … ? That’s weird: Two of your own examples pretty much destroy your whole case (and it’s no coincidence that the other two examples relate to server stuff), and still you don’t get it.

  21. oldman says:

    “The people are not willingly paying for the OS. It’s bundled and the price is hidden because the price could not stand the scrutiny of comparison.”

    But since people purchase computers to ruin applications to do certain things. So long as the cost of the application execution environment (i.e. OS) is not onerous, the cost is moot.

  22. Clarence Moon wrote, “The OEMs price their products based on what people are willing to pay, just like any other product.”

    No, they don’t. M$ tells them what a licence will cost and they do the maths. An OEM would be foolish to charge $20 for an OS that M$ charges them $50 for, but $20 is much closer to the actual cost of making an OS and distributing it to the world hundreds of millions of times. The fact is the OEMs do not reveal to the consumer the price of the OS. The consumer goes to the cashier knowing only the turkey and the butter together will cost $17 when they get to the cashier. The consumer does not know that butter bundled that way costs twice what butter alone would cost if they cannot buy an unbundled turkey. The people are not willingly paying for the OS. It’s bundled and the price is hidden because the price could not stand the scrutiny of comparison.

  23. Clarence Moon wrote, “If you are a proprietary seller of OS software, such as Microsoft, releasing your source puts and agreeing to FLOSS terms puts you out of business.”

    Certainly not true. All it would require is a change in business approach. For example, M$ could open training/support centres all over the globe in use of their OS. Would the margin be as high? Probably not, but they would still be in business. Businesses that have changed mode are many although not in the OS business much (necessarily so, since an OS can host a huge number of applications and libraries and drivers). SUN did open Solaris, though.

    A normal business accepts working for a living but bastards like M$ insist on a monopoly so they can overcharge (above cost of replacement) for their product. The world does not owe M$ nor any software developer a living. Certainly the world can make its own OS for less than monopoly prices.

  24. Clarence Moon says:

    The benefits of sharing the code are real and large for businesses

    I really think you are out to lunch on this issue, Mr. Pogson, and maybe it is time to air out the obvious myths of the FLOSS fantasy.

    Start with the obvious. If you are a proprietary seller of OS software, such as Microsoft, releasing your source puts and agreeing to FLOSS terms puts you out of business. That is very bad for Microsoft, who wants to keep on getting their many billions of profits from Windows each year.

    How about the users? If Microsoft released the Windows code and some legions of developers took it upon themselves to keep the ball rolling, per the myths of FLOSS, then the users might benefit from the now-zero price. Would the OEMs cut them any slack, though? I think the answer is no. The OEMs price their products based on what people are willing to pay, just like any other product. Very popular products, for example Viagra, make lots of money because people will pay more to get them. Just look at Apple, if you must have an electronics example.

    So maybe the OEMs would make a little higher profit, but they are not likely to pass it along. It would be stupid to do that.

    You have a sort of odd idea that companies would somehow keep a staff of developers about to do things that the company might need to enhance their business use of some product, say Linux. That is crazy. Maybe Google has such staff to handle internal needs, and Red Hat has such staff to keep their customers satisfied, but Google doesn’t really release their good stuff, they consume it internally, and Red Hat puts logos and such on things to make it illegal to copy everything that they do.

    For the rest of the world, that is not directly in the software business, it is the old story of whether to buy milk or keep a cow. Most of the time, a company of any size will see the benefits of buying the milk from a reliable vendor. In the software world, that has been a case of businesses buying computer software from Microsoft.

    This is not going to change.

  25. kozmcrae says:

    Open source is like Moore’s Law for software. Lock the code up in a proprietary license and it loses a free and potentially vast resource of man-hours.

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