Will Open Source Companies Disrupt the Traditional Proprietary Software Model?

Traditionally software platforms such as databases and operating systems were developed by corporations like Microsoft and Oracle. They made their money on licensing proprietary software and left it to partners to implement and maintain the systems. This model seems to be turned on its head with many new companies based on open source technologies.

During the last couple of decades open source development has grown steadily. The most well known is probably Linux. Open source development has traditionally been viewed as a geeky hobby thing, for a small number of ideological developers.

This is changing fast now. Walking around the stands at the goto conference there seems to be more companies based on open source software than proprietary software. What is more important is that they are enterprise class products. Let us look at a few examples

Open source companies
Most NoSQL databases are open source projects. Datastax is promoting and participating in developing Cassandra, which is used by Netflix and Spotify. Datastax is especially useful for large amounts of data in mulitiple datacenters. Basho’s Riak is similarly an open source project and a NoSQL type of database and has many of the same properties as Cassandra.

Erlang Solutions is promoting the open source language Erlang (which is the language used for Riak incidentally) and messaging platform MongooseIM (which is used by GetApp). The company’s business model is centred around consulting and support.

Elastic Search is an open source search engine. It allows you to build your own search function for example for e-commerce sites. It is also frequently used for logs and is integrated with an analytics tool called Kibana. The company lives from training and support.

Red Hat is perhaps the biggest and most well known company based on open source technology. They supply training, consulting implementation and a lot of other services to enterprise customers. They are already a multi billion dollar success story for the open source business model.

A new way of business
What is common among these is the different business model. Most of them are based on training, consulting, support and maintenance and the license is free. They typically offer some sort of service level, so companies using the system will pay them to keep it running just like they paid other companies to keep Microsoft’s products running. The  development is done on a free basis by interested developers, but also in a high degree by the companies working with the open source products.

This business model is interesting because it makes it possible to harness massive collaboration. When we orchestrate collaboration in the right way it unlocks the true potential of humanity. Could this be a new model for business in the future? We can all collaborate to make the platforms and we have specialists living from affiliated services like support and expertise? This business model might just disrupt the traditional proprietary platform provider model.

About anderslisdorf

My company is called Sensor Six and we help companies make better decisions. I am interested in technology, psychology, sociology, history and anything that can lead to better conditions for humanity...
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