Ludwig Siegele's latest piece for the Economist starts out:
How can you compete with something given away free? That has been the question dogging big software firms, above all Microsoft, ever since free ("open-source") programs made it into the mainstream — notably Linux, which is now a serious rival to costly proprietary operating systems such as Microsoft's Windows."
The article goes on to talk about the struggles of Jonathan Schwartz, Sun’s head of software. Sun’s past fortunes have relied upon the costly sale of a proprietary operating system on high end equipment. Now faced with low cost, high performance hardware powered by Intel processors, Sun is attempting to have it both ways — Sun still sells costly hardware running on Solaris but also sells inexpensive Intel boxes that run on Linux. But Sun’s bread and butter is still the expensive stuff. And Schwartz’s main message to that end is that so called “free” open source software comes at a cost — as he puts it, “Linux is like a puppy — in the beginning it’s great, but you also have to take care of it.”
Meanwhile, Microsoft may be taking a different approach to counteracting the open source movement. In a New York Times article yesterday (Monday), John Markoff describes Microsoft’s commitment to greatly expand the amount of free software it will give away to nonprofit organizations (Microsoft gave away $207 million worth of software last year and intends to at least double that number this year). While at first blush this appears a good thing for Microsoft to be doing, many in the open source world view it as a ploy to squash alternatives to Microsoft’s software. Open source developers view cash-strapped nonprofits as a key market for the fruits of their labor and view Microsoft’s efforts to give its own software away free to those nonprofits as an effort to undermine the spread of open source software. As Mitch Kapor is quoted in the article, “Microsoft’s culture is about unfair competitions.” Therefore Kapor concludes that while “within limits, it is good for Microsoft to give away software to nonprofits that can’t afford it,” at the levels Microsoft is promoting it becomes anticompetitive and “a problem.” Yet, as Microsoft points out, even if the nonprofit software program is wildly successful, it will represent no more than 2 or 3 percent of the value of Microsoft’s total sales, which perhaps makes it harder to argue that it is anti-competitive.
What is most striking to me about the themes of these two articles (and many others I’ve read in recent months) is the powerful impact open source software is having on commercial hardware and software businesses. While those businesses that sought to directly exploit the open source movement for profit did not ultimately fare well as commercial endeavors, I would venture to guess that we have not seen the last of them. There can be little doubt that the influence of the open source movement on the overall high tech landscape will continue to grow and leave some bodies in its wake.