Will OSS/FS destroy the software industry? Won’t programmers starve if many

programs become OSS/FS? No. It’s certainly possible that many OSS/FS products

will eliminate their proprietary competition, but that’s the nature of competition. If OSS/FS approaches pose a significant threat to proprietary development approaches, then proprietary vendors must either find ways to compete or join the OSS/FS movement. No one mourns the loss of buggy whip manufacturers, who were driven out of business by a superior approach to transportation (cars). Heinlein noted that no one is guaranteed protection against change in Life-Line (1939): “There has grown up in the minds of certain groups in this country the notion that because a man or a corporation has made a profit out of the public for a number of years, the government and the courts are charged with the duty of guaranteeing such profit in the future,

even in the face of changing circumstances and contrary public interest. This strange doctrine is not supported by statute nor common law. Neither individuals nor corporations have any right to come into court and ask that the clock of history be stopped, or turned back, for their private benefit. “

Eric Raymond’s “The Magic Cauldron” describes many ways to make money with OSS/FS. One particularly interesting note is that there is evidence that 95% of all software is not developed for sale. For the vast majority of software, organizations must pay developers to create it anyway. Thus, even if OSS/FS eliminated all shrink- wrapped programs, it would only eliminate 5% of the existing software development jobs. And, since the OSS/FS programs would be less expensive, other tasks could employ developers that are currently too expensive, so widespread OSS/FS development would not harm the ability of developers to make a living. OSS/FS doesn’t require that software developers work for free; many OSS/FS products are developed or improved by employees (whose job is to do so) and/or by contract work (who contract to make specific improvements in OSS/FS products). If an organization must have a new capability added to an OSS/FS program, they must find someone to add it... and generally, that will mean paying a developer to develop the addition. The difference is that, in this model, the cost is paid for development of those specific changes to the software, and not for making copies of the software. Since copying bits is essentially a zero-cost operation today, this means that this model of payment more accurately reflects the actual costs (since in software almost all costs are in development, not in copying).

Indeed, there has been a recent shift in OSS/FS away from volunteer programmers and towards paid development by experienced developers. Again, see Ganesh Prasad’s article for more information. Brian Elliott Finley’s article “Corporate Open Source Collaboration?” stated that “Now corporate America is getting involved in the development process. This seems to be a common trend amongst individuals, and now corporations, as they move into the Open Source world. That is that they start out as a user, but when their needs outstrip existing software, they migrate from being mere users to being developers. This is a good thing, but it makes for a slightly different slant on some of the dynamics of the process.” AOL decided to spin off the Mozilla project as a separate organization; not only does the separate organization employ several full-time employees, but other organizations have worked to hire Mozilla workers. Fundamentally, paying sotware developers is similar to paying for proprietary licenses, except you only have to pay for improvements (instead of paying for each copy), so many organizations appear to have found that it’s worthwhile. The Boston Consulting Group/OSDN Hacker Survey (January 31, 2002) surveyed users of SourceForge and found that 33.8% of the OSS/FS developers were writing OSS code for “work functionality” (i.e., it was something they did as part of their employment). It also provided quantitative evidence that OSS/FS developers are experienced; it found that OSS/FS developers had an average age of 30 and that they averaged 11 years of programming experience.

In 2004, Government Computer News reported in July 2004 on a presentation by Andrew Morton, who leads maintenance of the the Linux kernel in its stable form, and confirmed the trend towards paid OSS/FS developers. Morton spoke at a meeting sponsored by the Forum on Technology and Innovation, to address technology- related issues, held by Sen. John Ensign (R-Nev.), Sen. Ron Wyden (D- Ore.) and the Council on Competitiveness. Morton noted that “People’s stereotype [of the typical Linux developer] is of a male computer geek working in his basement writing code in his spare time, purely for the love of his craft. Such people were a significant force up

until about five years ago ...” but contributions from such enthusiasts, “is waning... Instead, most Linux kernel code is now generated by corporate programmers.” Morton noted that “About 1,000 developers contribute changes to Linux on a regular basis... Of those 1,000 developers, about 100 are paid to work on Linux by their employers. And those 100 have contributed about 37,000 of the last 38,000 changes made to the operating system.” The article later notes “Even though anyone can submit changes, rarely does good code come from just anyone. Morton noted that it is rare that a significant change would be submitted from someone who is completely unknown to the core developers. And all submitted code is inspected by other members of the group, so it is unlikely some malicious function may be secretly embedded in Linux... Far from being a project with a vast numbers of contributors, about half of those 37,000 changes are made by core developer team of about 20 individuals, Morton said.” The September 3, 2004 article Peace, love and paychecks gives one of many examples of this trend. Network Appliance (NetApp) pays significant money to one of the Linux lieutenants (Myklebust), as well as developing code for Linux, for a very simple reason: money. “What’s in it for [NetApp] is sales; it can sell into the Linux market. This is not about philanthropy. There is plenty of mutual benefit going on here,” says Peter Honeyman. The article notes that “Big companies pick up the tab for Linux development because the system helps them sell hardware and consulting services. HP claims $2.5 billion in Linux-related revenue in 2003, while IBM claims $2 billion. Red Hat, which distributes a version of the Linux operating system, generated $125 million in revenues last fiscal year and carries a market value of $2.3 billion. Last year sales of Linux servers grew 48% to $3.3 billion, and by 2008 Linux server sales could approach $10 billion, according to market researcher IDC.” NetApp earned $152 million on sales of $1.2 billion, its Linux payoff is significant. Linux now contains bits of code written by NetApp’s programmers, so that NetApp works particularly well with Linux. As a result, “it has won business it wouldn’t have otherwise at Oracle, Pixar, Southwest Airlines, ConocoPhillips and Weta Digital, the effects studio behind Lord of the Rings.” Corporate support of OSS/FS projects is not a new phenomenon. The X window system began in 1984 as a cooperative effort between MIT and Digital Equipment Corporation (DEC), and by 1988 a non-profit vendor consortium had been established to support it. The Apache web server began in 1995, based on previous NCSA work) were developed by consortias of companies from their very beginnings, and other popular OSS/FS projects like MySQL, Zope, and Qt have had strong backing from a specific commercial company for years. But now there is more corporate acceptance in using OSS/FS processes to gain results, and more understanding of how to do so. And as more OSS/FS projects gain in maturity, it is more likely that some project will intersect with a given company’s needs.

It seems unlikely that so many developers would choose to support an approach that would destroy their own industry, and there are a large number of OSS/FS

developers. On January 28, 2003, Sourceforge.net all by itself reported that it had 555,314 registered users on its OSS/FS development site, and many of the largest OSS/FS projects are not hosted by Sourceforge.net (including the Linux kernel, the gcc compilation system, the X-Windows GUI system, the Apache web server, the Mozilla web browser, and the Open Office document management suite).

Unfortunately, there seems to be no data to determine the number of OSS/FS developers worldwide, but it is likely to be at least a million people and possibly many, many more.

OSS/FS enables inexperienced developers to gain experience and credibility, while enabling organizations to find the developers they need (and will then pay to develop

more software). Often organizations will find the developers they need by looking at the OSS/FS projects they depend on (or on related projects). Thus, lead developers of an OSS/FS project are more likely to be hired by organizations when those

organizations need an extension or support for that project’s program. This gives both hope and incentive to inexperienced developers; if they start a new project, or visibly contribute to a project, they’re more likely to be hired to do additional work. Other developers can more easily evaluate that developer’s work (since the code is available for all to see), and the inexperienced developer gains experience by interacting with other developers. This isn’t just speculation; one of Netscape’s presenters at

FOSDEM 2002 was originally a volunteer contributor to Netscape’s Mozilla project; his contributions led Netscape to offer him a job (which he accepted).

Of course, OSS/FS certainly has an impact on the software industry, but in many ways it appears quite positive, especially for customers. Since customers are the ones directly funding the specific improvements they actually want (using money and/or developer time), market forces push OSS/FS developers directly towards making the improvements users actually want. Proprietary vendors try to identify customer needs using marketing departments, but there’s little evidence that marketing departments are as effective as customers themselves at identifying customer needs. In OSS/FS development, customers demonstrate which capabilities are most important to them, directly, by determining what they’ll fund. Another contrast is that proprietary developers’ funding motivations are not always aligned with customers’ motivations. Proprietary development has strong financial incentives to prevent the use of

competing products, to prevent interoperation with competing products, and to prevent access to copies (unless specifically authorized by the vendor). Thus, once a proprietary product becomes widely used, its vendor sometimees devotes increasing efforts to prevent use, interoperation, and copying, instead of improving capabilities actually desired by customers and even if those mechanisms interfere with customer needs. This trend is obvious over the decades of the software industry; dongles, undocumented and constantly changing data protocols and data formats, copy-

protected media, and software registration mechanisms which interfere with customer needs are all symptoms of this difference in motivation. Note that an OSS/FS

developer loses nothing if their customer later switches to a competing product (whether OSS/FS or proprietary), so an OSS/FS developer has no incentive to insert such mechanisms.

Karen Shaeffer has written an interesting piece, Prospering in the Open Source Software Era, which discusses what she views to be the effects of OSS/FS. For example, OSS/fS has the disruptive effect of commoditizing what used to be proprietary property and it invites innovation (as compared to proprietary software which constrained creativity). She thinks the big winners will be end users and the software developers, because “the value of software no longer resides in the code base - it resides in the developers who can quickly adapt and extend the existing open source code to enable businesses to realize their objectives concerned with emerging opportunities. This commoditization of source code represents a quantum step forward in business process efficiency - bringing the developers with the expertise into the business groups who have the innovating ideas.”

9. Is OSS/FS compatible with Capitalism? Yes. Years ago some tried to label OSS/FS as “communistic” or “socialistic” (i.e., anti-capitalist), but that rhetoric has failed. One article explaining why OSS/FS and capitalism are compatible is Ganesh Prasad’s

How Does the Capitalist View Open Source?. This paper shows that OSS/FS is quite consistent with capitalism: it increases wealth without violating principles of property ownership or free will. The developer of the Linux kernel, Linus Torvalds, noted that

U.S. copyright law specifically notes the exchange of copyrighted material as financial gain. US Code, Title 17 (copyrights), Chapter 1, Section 101: “Definitions” says that, “The term ‘financial gain’ includes receipt, or expectation of receipt, of anything of value, including the receipt of other copyrighted works.” He notes that this is part of the very fundamentals of copyright law. What’s more, he notes that the GPL license (the most popular OSS/FS license) “is designed so that people receive the value of other people’s copyrighted works in return [for] their own contributions. That is the fundamental idea of the whole license - everything else is just legal fluff... the notion that the GPL has, of ‘exchange of receipt of copyrighted works,’ is actually explicitly encoded in U.S. copyright law. It’s not just a crazy idea that some lefty Commie hippie dreamed up...” See also the previous information on economic viability and starving programmers for more.