Open source code, innovation and financial value

Open source is and always has been associated with open access to source code (and rightfully so, I might add). So questions raised about how much value source code in its open form has might be a bit misleading. Savio Rodrigues alludes to the fact that the benefits of having the source code are minimal in the majority of situations, and I agree. However, in my opinion open source code never did benefit end-users and customers by simply being open. Rather, the openness of software source code, as a manifestation of an open approach to building, maintaining and interacting with those involved with it, is most beneficial by providing a fertile ground for direct participation. Environments where feedback cycles are shorter, there are fewer barriers-to-entry and transparency is prized, are a haven for the production of choice software. Simply put, open source code is the common bond which attracts a community which is at the core of the headlining open source products and companies built around them.

Likewise, since open source code is at the heart of what an open source community makes, it is also a driver of what is fast becoming a key export: innovation. Jeff Jaffe, Novell's CTO, categorized open source as the fourth and current generation of innovation. I'll buy that. Open source is emergent as a vehicle for innovation in today's world, even if it hasn't been generally recognized as one just yet. Jeff also mentioned that:

With Open Source, the innovation happens in the open – simultaneous with the standards process - driving down cost and ensuring innovation.

The contributing role Rod Johnson took with the Java EE 6 proposal is exemplary of how open source organically aligns with the standards process. I talked with Rod some time after he authored a blog post on how Java EE 6 is a significant step forward for enterprise Java and immediately recognized the connection between the Spring Framework as a de-facto standard courtesy of an open source model and the standards process. Rod and Juergen Hoeller, both from Interface21, were involved with the proposal based on, in addition to technical expertise, their founding roles with Spring, which is relevant in no small part due to its brand of disruptive innovation introduced to the enterprise Java development space. Open source and Spring are inexorably linked. There is plausible evidence that Spring could cut it as a proprietary offering, but this does little to disregard open source as a direct enabler of its strengths as a lightweight development framework.

More specifically, the innovation mentioned above is effectively transferred to the customers/end user in the form of financial value propositions. CIO magazine enumerates "Seven Financial Reasons to Use Linux in the Enterprise" which covers some of the basic advantages of choosing an open source driven product. Yet it isn't how source code being accessible changes so much (it is given one reason out of seven) but rather how the associated model is the actual foundation for the available benefits. By sharing the associated costs of the software development process, with a participating community in exchange for sharing ownership of the product, total TCO is actually lower for the end-user/customer/solution provider who adopts it.

Is access to source code critical to the demand side of the software equation? Not generally, but it is certainly critical to the efficiency of open source as a productive force. Open source code is indeed a fact of life for the development communities assembled around it and for those who use the software. To debate how much or how little is a matter of minor detail.

Technorati Tags: innovation |  open source software | open processes | financial value

Comments

[Abhijit Nadgouda]

I tried to discuss the same - http://ifacethoughts.net/2007/07/07/the-value-of-source-code/ - the value of source code might be minimal if it is open only for you. When you think how many other eyes and brains now have access to it, the potential increases exponentially. It is a green pasture for innovation.

[John Willis]

I think as OSS moves up the stack larger enterprises might be more interested in the source code. I am not sure modifying the OS can give a large bank a competitive advantage but forking OSS SOA initiatives might. Also, for things that might be considered commodities, for example ESM, a better ROI could possibly be made by creating federated projects. For example a federated ESM solution for the financial industry

Just my .02 cents...
johnmwillis.com

[Alex Fletcher]

John,

The thought of a federated open source solutions targeted at particular vertical industries sounds like it has potential...I know James McGovern (http://duckdown.blogspot.com) is a big proponent of industry-specific open source.

Alex