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Businesses GNU is Not Unix Software The Almighty Buck

Stanford Teaching MBAs How To Fight Open Source 430

Posted by timothy
from the then-they-fight-you dept.
mjasay writes "As if the proprietary software world needed any help, two business professors from Harvard and Stanford have combined to publish 'Divide and Conquer: Competing with Free Technology Under Network Effects,' a research paper dedicated to helping business executives fight the onslaught of open source software. The professors advise 'the commercial vendor ... to bring its product to market first, to judiciously improve its product features, to keep its product "closed" so the open source product cannot tap into the network already built by the commercial product, and to segment the market so it can take advantage of a divide-and-conquer strategy.' The professors also suggest that 'embrace and extend' is a great model for when the open source product gets to market first. Glad to see that $48,921 that Stanford MBAs pay being put to good use. Having said that, such research is perhaps a great, market-driven indication that open source is having a serious effect on proprietary technology vendors."
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Stanford Teaching MBAs How To Fight Open Source

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  • by springbox (853816) on Monday September 22, 2008 @06:48PM (#25112545)

    to bring its product to market first, to judiciously improve its product features, to keep its product "closed" so the open source product cannot tap into the network already built by the commercial product

    Reminds me of Microsoft's strategy. Except for the "judicious improvement," and it doesn't seem like it will work for them in the long term anyway.

    • by Fluffeh (1273756) on Monday September 22, 2008 @07:38PM (#25113135)
      What makes me laugh is that there is such an "Us Vs Them" tone in all of it. It's like the nice business people think that all the open source guys are just waiting to kill their babies! I mean settle down.

      Make money and make a reputation through making and marketing GOOD STABLE WORKING software. Don't try to do it by making a big bag of shit and blocking anyone trying to compete.

      Oh, hang on, yes, now I see the potential problem for the business types...
      • Re: (Score:3, Funny)

        by wellingj (1030460)
        Not the real business types, just the non-engineer business types who can't provide value any other way.
      • by exley (221867) on Monday September 22, 2008 @08:04PM (#25113467) Homepage

        What makes me laugh is that there is such an "Us Vs Them" tone in all of it.

        Right. And the discussion below won't have a similar tone... :)

      • by Repossessed (1117929) on Monday September 22, 2008 @08:14PM (#25113557)

        What makes me laugh is that there is such an "Us Vs Them" tone in all of it. It's like the nice business people think that all the open source guys are just waiting to kill their babies!

        Wait, thats not our ultimate goal? I dedicated my life to a lie!

      • by commodoresloat (172735) * on Monday September 22, 2008 @08:29PM (#25113683)

        It's like the nice business people think that all the open source guys are just waiting to kill their babies! I mean settle down.

        I agree, they really have nothing to worry about in this regard. The open source baby killing project is not even in beta yet, and there are compatibility and dependency issues that will keep it out of the linux kernel for quite some time. The closed-source world, especially Microsoft, is years ahead of OSS when it comes to infant termination software. But if there's anyone out there in slashdot-land who would like to lend a hand please grab the sources from freshmeat and pitch in!

      • by rwyoder (759998) on Monday September 22, 2008 @09:23PM (#25114387)

        It's like the nice business people think that all the open source guys are just waiting to kill their babies!

        Well, they *have* been known to kill their wives. :-(

      • Re: (Score:3, Insightful)

        by zotz (3951)

        "What makes me laugh is that there is such an "Us Vs Them" tone in all of it. It's like the nice business people think that all the open source guys are just waiting to kill their babies! I mean settle down."

        See, I think they are focusing on the wrong businessmen.

        When are the other professors in the department(s) going to offer a course teaching how businessmen can use Free Software to make profits for their company? Never mind those guys in the other course who want you to reduce your bottom line for their

      • Re: (Score:3, Funny)

        by psbrogna (611644)
        You just know somewhere in a laboratory deep underground in Seattle there's a team of scientists working on sending an advanced cybernetic assassin back in time to locate Linus Torvalds ... Coming Soon: "T4: The Redemption"
  • confusion (Score:5, Insightful)

    by QuantumG (50515) * <qg@biodome.org> on Monday September 22, 2008 @06:49PM (#25112547) Homepage Journal

    The professors advise 'the commercial vendor

    So many obviously smart people confuse proprietary with commercial. The two are orthogonal. Back in the 90s this might have been academic, but there are now many commercial open source companies. Get with the program.

    • Re: (Score:3, Insightful)

      by postbigbang (761081)

      There's hope for a balance. I see more *buntu and Macs used by CS students. In the great scheme of things, MBAs will learn that there are multiple possible models for success in development organizations.

      Proprietary software makes money. Don't confuse making money with success, however. Like other methods of making money, proprietary software is transient in nature, just as open software is.

      • Re:confusion (Score:5, Insightful)

        by jellomizer (103300) on Monday September 22, 2008 @07:34PM (#25113087)

        Umm. My MBA Program talks rather fondly of Open Source Software, for the most part. They just make you analysis the benefits in a business perspective, and try to decide when an Open Source product is worth it, or getting a closed source app may be a better overall value. About 1/3 of the MBA class are Computer Science or Engineering Majors for their Undergrad and know about Linux and open source and use them. There are also differernt classes of MBA as well.
        While the degree is the same.
        You have Ivy League Full Time MBA. These tend to make the biggest Jerks of bosses. These Kids think they are special and entitled and tend to treat people under them like dirt while they bring the company to the ground.
        Next it is the Ivy League Part TIme MBA. These guys often have real business experience and know what it feels to be the little guy. But being from such a well known school they still often get high end jobs much quicker then their experience shows and still kill the company.
        Full Time normal college MBA. Yea they are Jerks too. However companies wont put them in top positions to kill the company, until the get the real experience.
        Finnaly the Part Time Normal College MBA. These guys are not in it to be the CEO just a manager. Tend to be less of jerks and start as low managers and work they way up. Tend to be the guys you can deal with.

        • Re:confusion (Score:5, Interesting)

          by EggyToast (858951) on Monday September 22, 2008 @08:39PM (#25113759) Homepage
          I'm experiencing the same things you are in my MBA program. Many of the tech-oriented classes make a special point to illustrate uses of open source software -- as much as textbooks and older professors can, of course. They do a good job of pointing out that the main drawback of open source is that there's often little support, or the support makes it cost as much as a commercial solution, so it's not a "silver bullet" option. But that in many cases, it can be used in place of otherwise commercial apps.

          In other words, what's been taught is "evaluate the software on its own merits, and how it will affect future growth," which is pretty standard "be a good manager" ideas but is reassuring to hear in a classroom setting. I'm one of the more tech-savvy students in my classes, but it's nice that it's not all just "buy this and that and you'll have an enterprise-class system for your small business."
          • Re:confusion (Score:5, Insightful)

            by DrSkwid (118965) on Tuesday September 23, 2008 @03:23AM (#25117101) Homepage Journal

            Open Source benefits form economies of scale just like other tools and machinery. Eventually it becomes cost effective to have motor mechanics to service your fleet of vehicles rather than being done by a third party. In which case buying vehicles for which detailed schematics are available would be advantageous. I think people get too emotional regarding the open/closed software debate. Sometimes it's just easier to buy a hammer than a hammer making kit.

        • Re: (Score:3, Informative)

          You have Ivy League Full Time MBA. These tend to make the biggest Jerks of bosses. These Kids think they are special and entitled and tend to treat people under them like dirt while they bring the company to the ground.
          Next it is the Ivy League Part TIme MBA. These guys often have real business experience and know what it feels to be the little guy. But being from such a well known school they still often get high end jobs much quicker then their experience shows and still kill the company.

          Wow, someone here sure sounds a little frustrated.

          You fail to consider that what you call "Ivy League Full Time MBAs" have an average age of 27-28, meaning generally 5-6 years of business experience. Also, given the tough requirements to get in to one of the top 5-10 MBA schools (I'm sure you weren't only referring to Ivies, but also for instance Sloan, Stanford and Kellogg), these are already overachievers by the time they start their MBA. They've already climbed fast, worked their asses off, and gained

    • Re:confusion (Score:5, Informative)

      by morgan_greywolf (835522) on Monday September 22, 2008 @07:14PM (#25112861) Homepage Journal

      Not only that, but these are companies you have actually heard of. Sun Microsystems, IBM, and Google are all companies that produce open source software and actually make money from it. Not to mention pure open source companies like Zope and Zend.

      • Re: (Score:3, Insightful)

        by Anonymous Coward

        Not only that, but these are companies you have actually heard of. Sun Microsystems, IBM, and Google are all companies that produce open source software and actually make money from it.

        What the heck is Google doing in that list. They pretty much exclusively make money from AdSense and their search algorithms. Care to point me to where I can download the source for that? Nope, you don't even get to see the object code. You have to hand over your data to them to process in their super-closed system.

    • Re: (Score:3, Insightful)

      by RiffRafff (234408)

      The author also doesn't understand (or refuses to acknowledge) the different definitions of "free," and as such, misses some of the major points of why more and more people are using FOSS.

    • Re: (Score:3, Informative)

      by WarJolt (990309)

      Good point. Most people don't know that for $250 a year you can get Desktop support from Canonical, the company who owns *buntu trademarks. They'll even do engineering for you for a fee.

  • Good! (Score:4, Insightful)

    by MarkvW (1037596) on Monday September 22, 2008 @06:49PM (#25112551)

    Knowing the enemy's potential avenues of attack is a wonderful asset. It makes counter-attacking and defending much easier.

    • Read the paper here (Score:5, Informative)

      by derek_farn (689539) <derek@knosof . c o.uk> on Monday September 22, 2008 @07:17PM (#25112887) Homepage
      The paper is freely available [poms.org] for everybody to learn from, in fact the Jan-Feb 2008 issue [poms.org] is fully of very interesting article (what month are we in now?).
      • Re: (Score:3, Informative)

        by Kjella (173770)

        Uh, did you try reading what you linked to? It's the appendixes / supplements to the journal articles, and are utterly useless.

  • Jest not! (Score:5, Funny)

    by Ash-Fox (726320) on Monday September 22, 2008 @06:50PM (#25112557)

    What happened to all open source software is crap arguments?

    Surely companies likes Microsoft were not jesting!

  • by Chapter80 (926879) on Monday September 22, 2008 @06:50PM (#25112561)
    I don't see an issue with this. I know I'll get modded down to oblivion, but I see no problem with teaching people A method to compete in the market place.

    I'd actually be disappointed if information like this weren't being taught in Silicon Valley!

    • by QuantumG (50515) *

      There's a reason why people talk about fair competition.

      This is not.

      • Re: (Score:2, Interesting)

        by nomadic (141991)
        This is not.

        Why not?
        • Re: (Score:3, Interesting)

          by aweraw (557447) *

          This course isn't about how to compete in a market. It's about how to control one... if you control the market, you're in a pretty good position to be "unfair" to your competitors - and to that end, this course appears to encourage that

          Zed Shaw is right: fuck the ABG

      • No, it's comedy marketing of snake oil.

    • by Darkness404 (1287218) on Monday September 22, 2008 @07:04PM (#25112729)
      Competition is good, but bad teaching is not. Proprietary software is going downhill. Just about every major software vendor that remains proprietary is losing marketshare and money. Teaching people how to "combat" open source software is like teaching people how to "combat" C and claim that COBOL is the language of the future. Its not going to work. Open source is the future, proprietary software is dying.
      • by liquidpele (663430) on Monday September 22, 2008 @07:13PM (#25112851) Journal
        A better analogy is the RIAA combating file sharing, instead of simply adjusting to the changing market. A good businessperson will choose the strategy that makes the most for their business, not try to force their company's will on the free market.
      • Re: (Score:3, Insightful)

        by westlake (615356)
        Proprietary software is going downhill. Just about every major software vendor that remains proprietary is losing marketshare and money.
        .

        I wonder.

        Microsoft seems to be weathering the financial storms rather well - and there are others which come to mind.

        With investors fleeing from the corporate bond market, this seems an odd time for Microsoft to be borrowing money, but the software maker is planning to do just that, taking advantage of its status as one of the tech sector's bluest blue chips.

        The Micro

    • I see no problem with teaching people A method to compete in the market place.

      Competition is good, yes, but "divide and conquer"?

      I'd actually be disappointed if information like this weren't being taught in Silicon Valley!

      And I'm kind of disappointed the benefits and liabilities of cooperation isn't being taught.

      Falcon

  • by Brain Damaged Bogan (1006835) on Monday September 22, 2008 @06:54PM (#25112599)
    unless your product is targeted at such a small subset of users that noone in the OSS world would bother to create a competing product there will always be some geek out there willing to dedicate all their spare time to create something that will compete with your product... for free. What proprietry vendors need to do is charging for software as a service and provide support packages that the OSS world don't bother to do.
  • by HaeMaker (221642) on Monday September 22, 2008 @06:57PM (#25112637) Homepage

    They should have left their research closed. Now anyone can take their research, reverse engineer it, and repackage it under a Creating Commons license.

    • by bobdotorg (598873) on Monday September 22, 2008 @07:46PM (#25113249)

      They should have left their research closed. Now anyone can take their research, reverse engineer it, and repackage it under a Creating Commons license.

      Clever post, but check out this subtle fact: the authors are absolutely practicing what they preached in that very article:

      market segmentation: you get the watered down summary for free, but have to pay for a journal subscription to get the actual article

      market seeding: give this version away for free (and I suspect that they'll even send a .pdf of their related working papers) in hopes of capturing customers for the more expensive version (a.k.a. attending their b-schools, or hiring them on as consultants).

      In reality though, academic theorists are absolutely the most open source colleagues I've ever had. As long as you adequately cite them, you'll be their bestest friend if you embrace and extend their material. When tenure and promotion decisions are to be made, b-school deans might not be so savvy as to know how good your publications are, but they can easily see how often you work has been cited. Don Jacobs, former dean of Kellogg, said it best, "Maybe we can't read, but we can definitely count."

  • Awesome... (Score:5, Insightful)

    by JustinOpinion (1246824) on Monday September 22, 2008 @07:00PM (#25112665)

    I'm happy to see that the suggested strategies are ones which carry significant drawbacks. Segmenting markets and keeping everything closed does indeed give you control, but it also slows the very network growth that makes products become successful. And it frequently leads to user frustration (because of, for example, DRM, or the lack of support groups, or the inability to find or construct fixes/hacks as needed).

    This is good news in the sense that any strategy to fight open-source means that you emphasize the gap between open-source and closed-source products: the open-source product's advantage is the openness, the community, the ease of distribution, the non-naginess, the network effects, the hackability... and the more closed the closed-source products try to be, the more these items become product differentiators, which the open-source product can point to as big advantages.

    So, I do hope closed-source projects go ahead and implement those user-hostile strategies. It will only serve to make open-source products look that much better by comparison. As other posters have pointed out, there is no fundamental divide between "open-source" and "commercial". So I would think the better strategy for MBAs thinking about open-source is "if you can't beat 'em--join 'em". Or in other words, why get involved in closed-source business ventures when an open-sourced equivalent inherently leverages network effects?

    • Re: (Score:2, Troll)

      by David Gerard (12369)

      These guys are basically selling snake oil to the gullible end of the obsessive control addict market.

  • by SkullOne (150150) on Monday September 22, 2008 @07:01PM (#25112693) Homepage

    Stanford, the birthplace of SUN, one of the renowned distributors of a once true and mighty closed and proprietary Unix, that almost fell off the face of the planet in part of it starting to become irrelevant compared to open sourced OS's and systems (Linux, BSD, etc).

    The SAME Sun, which has now open sourced almost their ENTIRE IP portfolio in the Open Solaris project, thereby bringing relevancy BACK to Solaris and it's suite of products.
    The same Sun which utilizes hundreds of code donors to it's projects, and big communities around storage, ZFS, etc.

    Closed, commercial systems have a place, and many of them do well, but when markets change, can they change quickly enough? Lessons show us that they cannot change quickly enough. Or do the closed proprietary systems try and change the market the suit their needs?

    Look at IBM, HP, Sun, and even Dell now relying on open *nix systems driving huge sales numbers.

    The markets have changed, its those who do not follow trends, or fight the trends who become irrelevent.

    The open source model will probably change in a decade, or a century and it too will have to change.

    The paper is just a way to appeal to stiffley business suit class of people afraid of change.

  • It would be nice... (Score:4, Interesting)

    by tool462 (677306) on Monday September 22, 2008 @07:04PM (#25112737)

    if they also taught a course on open-source economics. I.e., how you can make a successful business through the selling of services. It would be useful, since I get the impression that a lot of the folks who are open-source advocates really don't have much business sense. That's not meant as an insult--I know my business skills are mostly lacking. It's a big part of why I wouldn't start a business myself. It might have the added benefit of giving some of the commercial==closed-source people some ideas on where it can make sense to use open-source in their own businesses. I work with a guy who can't understand why anybody would ever contribute to open source. He sees it as people giving away valuable brain juice for free.

  • by Sockatume (732728) on Monday September 22, 2008 @07:04PM (#25112743)
    From the press release that this guy links to (the paper is actually here [atypon-link.com]):

    A recent paper on this topic by Mendelson, coauthored with Deishin Lee, PhD â(TM)04, now a faculty member at Harvard Business School, is not a how-to manual for hard-pressed executives. Rather the researchers have built a theoretical model explaining the choices open to commercial firms. âoeAlthough open source is the lead example of our work, the principles certainly apply to other businesses, including, for example, the media business,â says Mendelson.

    Heaven forbid that somebody actually study how businesses choose between free and proprietary software! That's of no good whatsoever! And of course free-as-in-speech definitely does not extend to a university allowing its academics to publish material which might be bad for open source. Clearly Stanford should've had these two men killed and fed to rabid, pestulent chipmunks, rather than allow this affront to reach the press.
  • natural order (Score:4, Interesting)

    by khellendros1984 (792761) on Monday September 22, 2008 @07:06PM (#25112775) Journal
    âoeFirst they ignore you, then they laugh at you, then they fight you, then you win.â

    I think we've been in that penultimate step for a while now. Here's hoping Ghandi was right =)

    • Re:natural order (Score:5, Insightful)

      by Kjella (173770) on Monday September 22, 2008 @08:02PM (#25113437) Homepage

      The only thing I don't like about that quote is that it only predicts the sequence under the assumption that you'll win.

      First they ignore you, and many simply remain ignored.
      If not they laugh at you, and many are still ridiculed.
      If not they fight you, and many are fighting or losing.
      If not, then and only then will you win.

      Honestly it's not much of a progress meter. What I think is the real progress meter is that open source software is becoming more and more usable and it's not something you can "undo". You can't drive it bankrupt, you can't buy it up, you can fight the distros and the outer layers but you can't stop the underlying OSS development. Even though it feels glacier-slow at times I've seen how far it's come in the last ten years - ten more years like those and it'll be slowly rolling in almost anywhere. No huge splashes, no revolutionary releases, no "year of the Linux desktop" just slowly pushing the others out.

  • by salesgeek (263995) on Monday September 22, 2008 @07:08PM (#25112791) Homepage

    The two strategies presented are not strategies against software.

    The first, embrace and extend is a play against already established standards, and usually is applied to protocols and APIs but not to package software. Most successful E&E campaigns have been against standards implemented in closed source systems. Most of MS success was before the rise of Open Source as a viable model. Generally E&E fails against open source competition (see firefox, Apache, Linux v Unix, etc...).

    The second was just a trashcan "make a better product" and "hide it from the competition" kind of suggestion. Oh, and segment your market better... problem is that it's assuming that your open competitors can't make better products or segment better.

  • by bobdotorg (598873) on Monday September 22, 2008 @07:21PM (#25112929)

    The slashdot summary author (mjasay) appears to see the world through a lens which makes the developers of open source software victims of some nasty MBA conspiracy.

    The academics who wrote the underlying article go out of their way to say that their writings are not a 'how to' manual for MBAs, and that open source software is only one example.

    The article is simply a recent take on 'How to compete with free,' an important MBA marketing topic for decades. 'How to compete with free' can be considered a subset of how to compete in general, and the gist of any marketing solution to 'how to compete' will be based on building value in the product.

    One method to build value is to increase switching cost through lock-in. Even free / advertising supported services do this: my.yahoo, iTunes, gmail, hotmail and countless others.

    If you read the underlying academic article, you just might notice that most of the tools presented now are analogous to the tools presented at Sanford in the early nineties to the MBAs who eventually went on to Coke and Pepsi to fight the scourge of FOSW (Free Open Source Water).

    Open source water survived just fine. As long as open source software continues to offer value, it will continue to thrive.

    Marketing is marketing. MBA courses are MBA courses. Same shit, different year.

  • Hmmm (Score:3, Interesting)

    by jav1231 (539129) on Monday September 22, 2008 @07:24PM (#25112971)
    I'd rather get my MBA from someone who gives me the tools to actually compete in the market place. Not teach me ways to circumvent competition and leverage market share through these tactics. There's already a university for this. It's called the street. I'm surprised these guys aren't named Guido and Mugsy.
    • Re: (Score:3, Interesting)

      by Kjella (173770)

      I'd rather get my MBA from someone who gives me the tools to actually compete in the market place.

      What like better products, lower prices and such? I'm sorry, but then you're trying to become a product/process engineer. MBAs are all about seeing business opportunities - how can they take the skills we have and make profitable products out of it. It's all about finding markets or niches where margins are high and competition is low and keeping it that way so you can turn a tidy profit. OSS is nothing special in this context, the next article can just as easily be on how to break in and capture a market s

      • capitalism (Score:3, Insightful)

        by falconwolf (725481)

        it's capitalism - as long as iot's within the bounds of the law it's all about competition and squeezing your competitors out

        That's not what capitalism is about, capitalism encourages competition. What you're proposing, monopolies [deoxy.org], is what what Adam Smith the Father of capitalism was opposed to. He didn't even like patents calling them a necessary evil [adamsmithslostlegacy.com]. To Adams capitalism provided a fair or equitable and optimum outcome for everyone.

        Falcon

  • by jfruhlinger (470035) on Monday September 22, 2008 @07:41PM (#25113165) Homepage

    The headline is misleading. The MBA students aren't learning how to fight open source as an abstract concept; they're learning what to do when your business produces a piece of proprietary software that competes with an open source product.

    I'm all for open source and use a lot of open source apps, but I don't believe that such a dilemma is always most profitably answered with "embrace open source yourself."

  • by CopaceticOpus (965603) on Monday September 22, 2008 @08:31PM (#25113695)

    Before deciding to fight open source and to lock your customers into dependence on your company so that they cannot escape, step back and ask yourself a question. Do I want to make money by doing good for people, or by deceiving and manipulating them?

    There are basically two different ways to run a company. One is to make your customers happy and strive to serve them as best you can, trusting that they will reward you for it with loyalty. The other is to trick people somehow, by being dishonest, selling them something they don't need, locking them in to your service, or sticking them with extra fees. Both approaches can be profitable, but only one can actually make the world a better place.

    I love companies that take the former approach. For example: NewEgg.com (Low prices, honest customer reviews posted even if they are negative, excellent customer service.) Monoprice.com (For the same reasons.) Netflix (Fast service, easy to use website, honest communication and refunds for rare service outages.) My local coffee shop (High quality drinks that are much better than the chains, friendly staff, good food with custom menu items that change frequently.)

    On the other hand, there is no shortage of examples of the latter approach. Best Buy (Selling HDMI cables for $50-75 which can be purchased for $5-8 on Monoprice.com.) Most places that sell glasses (for excessive markups. An online market for glasses at vastly reduced prices is now springing up.) Most cell phone providers (for charging excessive fees, making it difficult to switch providers or move phones to other plans, and designing their plans to overcharge customers who don't guess correctly how many minutes they will talk and at what time.) I could go on.

    It's probably easier to make money going the evil route, or at least it requires less originality. But I hope that at least a fraction of MBA students would be interested in something more than the bottom line of profit.

    • Re: (Score:3, Interesting)

      I perfectly understand.

      I work at Starbucks, that corporate coffee chain. You know, they spend more on medical insurance on us 20+hr a week employees than they do on beans?

      But aside that, we're told at sbux one major rule on how we conduct our business: "Just Say Yes". No matter what. As an example, we've had a dog show going on during the weekend. A judge came on by and ordered a venti (large) coffee with 1 inch of steamed 2%. Cool. Rule says charge for only =>4 oz. milk. One of our 17 yr old partners st

  • by FilterMapReduce (1296509) on Monday September 22, 2008 @08:32PM (#25113699)
    You see, this is clearly a calculated move in the epic power struggle otherwise known as the Cal/Stanford rivalry. Do you really think it's a coincidence that the world's leading institution in the field of hating Stanford also happens to be the 'B' in BSD? You can soon expect a ferocious counterattack of Unix hacking, liberal politics, and lateral passes.
  • by bhmit1 (2270) on Monday September 22, 2008 @10:22PM (#25115089) Homepage

    In the spirit of http://xkcd.com/463/ [xkcd.com], commercial software that competes like this will slowly lose the battle.

    Instead of fighting for the same turf as open source, they should be finding markets that aren't served by open source. Niche markets and new markets are great places for commercial vendors. Generic applications used by everyone that are constantly reinventing the same wheel will be open sourced and the market will shift.

    Don't try to make a better web browser or office application. Instead, focus on the pace maker control system or credit card fraud detection system. Focus on things that are worth money to a narrow market and don't have a lot of competition from open source because their isn't demand for bored developers to build a cheaper mouse trap.

    Stop doing it wrong.

  • by RKBA (622932) on Tuesday September 23, 2008 @01:23AM (#25116467)

    Prostitutes always forgo morality in favor of money, and there's not much money in free open-source software.

  • by hey! (33014) on Tuesday September 23, 2008 @12:22PM (#25123421) Homepage Journal

    Lesson #1: Pick your battles

    Lesson #2, method dealing with the enemy while occupying a strategically disadvantageous position: see lesson #1.

    Does anybody believe that the proprietary/free clock will be rolled back to the late 1980s, when printing licenses was like printing currency? Of course not. Open source is here to stay. That doesn't mean there aren't opportunities to make money in software, both in competition with and by using free software. It seems to me the smart business leader chooses the mix of competition and cooperation. Google hasn't done too bad, after all.

    Where it's tough is when you have a company with a cash cow. Microsoft. ESRI. Oracle. The cash cow may be doomed, but ever year it is kept alive represents money, a great deal of money.

    So it makes sense to position your product, say Windows, against the open source "competition". It really boils down to one thing: compete. Give your customers reasons to keep buying your product and cut prices to keep them from moving away from your products. There are now free as in beer versions of Oracle and SQL Server, just to establish a bulwark on the low end of the product position.

You see but you do not observe. Sir Arthur Conan Doyle, in "The Memoirs of Sherlock Holmes"

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