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Businesses The Almighty Buck

How Open Source Drives Down Startup Costs 134

Posted by timothy from the various-ways dept.
prostoalex writes "Reuters Plugged In article (usually syndicated to your local paper's Technology section) talks about the real impact of open source in the technology world -- cutting down startup costs for other developers. New ventures are coming out, where the startup costs range in five-digit numbers, not seven-digit figures, where venture capital financing would be required. The article talks about Project for Open Source Media, Blogger.com, Odeo and Asterisk telephone system."
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How Open Source Drives Down Startup Costs More

How Open Source Drives Down Startup Costs

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  • duh (Score:5, Funny)

    by PunkOfLinux ( 870955 ) <mewshi@mewshi.com> on Sunday April 03, 2005 @07:00PM (#12129428) Homepage
    of course it does. Free = lower cost than money >.>
    • and I just used my last moderation point. isnt this a duh kinda article. Im not starting up my own business but in all my school projects I choose OSS first.

      • Re:duh (Score:2, Interesting)

        by Anonymous Coward
        You should. Even starting a business that fails ultimately is a great learning experience and makes you *way* more attractive to employers. Being in school is a great time as well. Look for something that won't take *too* much time away, that doesn't have much overhead, and could let you pocket some decent spending money.

    • Re:duh (Score:2, Insightful)

      by dshaw858 ( 828072 )
      A lot of people (*cough*microsoft*cough*) would have you know that OSS software "costs more in the end" or something. I personally disagree, but yes- it's a duh type of thing that "free is less money than costly".

      - dshaw
    • You are lucky that Uncle RMS doesn't read /. ;-)
    • The tools need to be the best you can get for the price. Sometimes that may mean foregoing open source software, at others it means using it. What I'd like to see is a survey which compares the effectiveness of well-designed open source and closed source IT systems in business use. Take the top 5% of them that can be found and then see which is the most reliable, how much they cost and what is involved in keeping them working.

      • Re:Ummm yeah, but... (Score:3, Insightful)

        by dnoyeb ( 547705 )
        Flawed study. You would really be studying the quality of the particular organizations you pick to represent open source and proprietary softwares.

        You really need to study to find any statistical correlation between open source, close source, and relaibility and cost.
        • Researchers have recently released a study demonsrating that free ingredients make baking cakes cheaper.

          Conflicting studies from think tanks sponsored by flour industry leaders MakesitSoft are disputing the conclusions, but are not really taken seriously.
    • I think that's a rather naive interpretation of the article. As another poster mentioned, Microsoft is a big an of the "total cost of ownership" argument, and while I find the argument to not be in Microsoft's favor, there is something to be said for considering the time involved in making FOSS work the way you would like it to (and with sufficient stability). Time does equal money, and they both need to be evaluated when making claims about the burden imposed by software on business.

  • very true (Score:5, Insightful)

    by appleLaserWriter ( 91994 ) on Sunday April 03, 2005 @07:04PM (#12129455)
    I have been involved in several early-stage ventures since the bust and completely agree with the article. With open source software and equipment from ebay, $50k goes a very long way.

    Actually making money with your product is still as hard as ever, but the financial risk associated with technology ventures has been greatly reduced.

    • Starting a business... (Score:5, Insightful)

      by ImaLamer ( 260199 ) <john.lamar@g m a i l . com> on Sunday April 03, 2005 @07:23PM (#12129561) Homepage Journal
      One thing I've learned over the years is that when you start any type of business you can't just go out and get desks, chairs and other equipment you'll never use if you aren't profitable.

      It's almost always a good idea to start a business on a shoestring. Most businesses who fail before they start do so because they spent all of their capital on things you don't need or things you can rent or borrow.

      Open source makes sense in this repect. Instead of starting with MS SQL server for example, start with PostgreSQL or your preferred free alternative. Migrate if you must later; but why spend top dollar on something that may never get paid for?

      • Re:Starting a business... (Score:5, Insightful)

        by glinden ( 56181 ) * on Sunday April 03, 2005 @08:03PM (#12129784) Homepage Journal
        • It's almost always a good idea to start a business on a shoestring.
        Absolutely. Another important thing is to launch early and often. If your idea is stupid, you want to find out fast and change it if you can.

        If you've spent a couple months working on it, no problem if your users hate it. Take in their feedback and improve it.

        If you've spent a year working on it, you're dead if your users hate it. No money left to make changes. You just bet the farm and lost.
        • Let me also add to this whole discussion that a great idea is to just do what your competitor is doing.

          If you've got a business idea, and someone else is already doing it - copy them. People want options just as much as they want something "new".
      • ...entirely for PHB reasons. After all, what does MS SQL...
        1. do that PostgreSQL doesn't... [sample incorrect answers: "scale", "replicate", "have support"]
        2. that you'll actually need and successfully use... [sample incorrect answers: "MS-Blaster", "a VB interface", "indemnification"]
        3. badly enough to be lumbered with MS Windows, per-seat licences and MCSEs in order to get it?

    • Better for long-term sustainability too (Score:5, Interesting)

      by EmbeddedJanitor ( 597831 ) on Sunday April 03, 2005 @07:42PM (#12129658)
      Obviously open source reduces the barrier to entry, but what many don't see is that open source makes for a much more sustainable business too.

      Closed source software tends to get the "crown jewel" treatment. It starts of with a high value - often being a company's strategic advantage. But, because it is isolated and cost a lot to originally develop it tends to stagnate. Pretty soon your cutting-edge best-in-the-world software falls behind and the company hurts.

      Open source software, on the other hand, tends to stay fresher. Because more people are involved, the boundaries are being pushed a lot harder instead of being hampered by internal corporate politics.

      • But, because it is isolated and cost a lot to originally develop it tends to stagnate. Pretty soon your cutting-edge best-in-the-world software falls behind and the company hurts.

        Open source software, on the other hand, tends to stay fresher. Because more people are involved, the boundaries are being pushed a lot harder instead of being hampered by internal corporate politics.

        The road to good OSS programs is paved with projects that have withered and died. Just because you're using a piece of OSS softwar

  • And another trend... (Score:5, Interesting)

    by Noryungi ( 70322 ) on Sunday April 03, 2005 @07:07PM (#12129479) Homepage Journal
    Is that open-source usually works well with cheap commodity machines, like the ubiquitous PC.

    True story: I once did an interview with a very interesting start-up, who designed custom chips for high-speed routers.

    During that interview, one of the founders of the company mentioned they were moving all their engineers from Sun machines to 4 CPUs Intel machines running Linux.

    He said Linux was already good enough to do 90% of the job, for less than 10% of the cost of a Sun machine. The move, of course, saved '000s of dollars for the company.

    • Re:And another trend... (Score:5, Interesting)

      by buckhead_buddy ( 186384 ) on Sunday April 03, 2005 @07:25PM (#12129577)
      Noryungi wrote:
      And Another Trend Is that open-source usually works well with cheap commodity machines, like the ubiquitous PC.
      I work with many trendy (and wanna-be trendy) artists, writers, and other creative types. Their strong inclination is to purchase iBooks and Powerbooks for their needs.

      What's even better about Open-Source software from my perspective is that I can get the software to work on their trendy hardware or on their less trendy accountant's generic desktop. In the world of commercial, closed-source products this always creates controversy because of ports that don't exist on the other platform, or inadequacies in the port. The fact that there's a robust amount of open source software that's largely platform independent helps me to help them.

  • No startup cost possible! (Score:5, Interesting)

    by Cruithne ( 658153 ) on Sunday April 03, 2005 @07:09PM (#12129487)
    Except of course, the opportunity cost of your time. I am working on two different business plans at this moment that have NO startup costs because of open source software. Granted, they are both development projects, however they are both quite viable businesses, and all they require is the spare time of a few dedicated developers after they get home from their "Real" jobs.

  • But are things better? (Score:5, Interesting)

    by GGardner ( 97375 ) on Sunday April 03, 2005 @07:11PM (#12129490)
    For my first "real" job, I had a DECstation 5000 on my desk. This 25 Mhz machine, which cost something like $20k, was useless without even more expensive server, and software costs would make your head spin. However, with this kind of necessary investment, my bosses though nothing of spending several thousand dollars a year sending me to Usenix conferences, and other related training.

    Now that a useful machine is less than a thousand dollars, it seems much harder to get training, conferences or other ancillary spending approved.

    • Re:But are things better? (Score:4, Insightful)

      by QuantumG ( 50515 ) <qg@biodome.org> on Sunday April 03, 2005 @07:26PM (#12129581) Homepage Journal
      Wow, maybe the training should be inheriently valuable in and of itself. Then your employer will see it as an investment. I always found that funny. Consider admin people vs development people. Admin dudes are sent to every course under the sun to get certified. It's just considered standard practice. Oh, we want to use Cisco routers? Gunna need at least 2 admins with Cisco certification. Now think about programmers. Each one is expected to have his own specialties which he brings to the job with him. There's no sending them off to be trained as the need arises. Oh, the customer has required that we develop this next application in Java. Damn, better hire some more Java people and lay off some of the C# coders.

      • Now think about programmers. Each one is expected to have his own specialties which he brings to the job with him. There's no sending them off to be trained as the need arises. Oh, the customer has required that we develop this next application in Java. Damn, better hire some more Java people and lay off some of the C# coders.

        There should be a happy medium somewhere. Learning a new language and API set is a big piece of work, and trying to learn it while working on a project you're intending to sell, or

        • I think you're confusing cause and effect. Java is so different to Ada because no-one who is experienced in Ada is trained to program in Java -- they just move onto another Ada job. The result is that anything good in Ada never makes it into Java and visa-versa.
      • Never noticed that myself. My experience has been "we'd rather you take the time to learn it than hire someone else because we trust you" Doesn't get me free school I don't want, but getting pay, money for the technical library and a longer schedule is better than an education in my book.

        Don't see as much of it now, but now I build the cost of my training into my fees... still not going to classes, but I've got a nice library shaping up and free time to expand my skillset.

        Course, I've always steered cle
    • While the cost of hardware and software are coming down, people are becoming more important than ever. Great people set one company apart from another. If a business is too cheap on people they will get what they pay for.

  • Cost for startup (Score:3, Insightful)

    by mcrbids ( 148650 ) on Sunday April 03, 2005 @07:11PM (#12129495) Journal
    1) Programmer willing to work for percentage.

    2) Midrange server on Ebay - $2000.

    3) Apache/PHP/PostgreSQL - free

    4) Electricity - Damn cheap...

    5) Promotion expenses - $XX,000

    Yep. I'd agree that startups now can be mighty cheap!
    • The expensive or difficult thing, item #0 is the IDEA, the thing that makes the startup actually worth something...

      • Re:Cost for startup (Score:5, Interesting)

        by mcrbids ( 148650 ) on Sunday April 03, 2005 @07:27PM (#12129589) Journal
        The expensive or difficult thing, item #0 is the IDEA, the thing that makes the startup actually worth something...

        Phaw. Ideas are cheap. There are a million of them, and a good, healthy percentage of them can be quite profitable.

        It's the combination of idea, product delivery, legal stability, financial competence, and (most especially) marketing that makes a startup fly.

        I remember reading a while back about the "card table" test. The idea goes something like this:

        When looking at a startup to invest in, visit their main offices. If they have nice, leather seats and elaborate furniture, take your investment capital elsewhere. They aren't prioritizing their investments on delivery.

        On the other hand, if they are using cheap, Costco furniture and/or card tables, they are putting their money where it matters, and are much more likely to succeed.

    • Re:Cost for startup (Score:4, Funny)

      by northcat ( 827059 ) on Sunday April 03, 2005 @07:47PM (#12129681) Journal
      You forgot the hot secretary and the expensive out of court settlement for the sexual harrasment suit.

    • Re:Cost for startup (Score:5, Informative)

      by glinden ( 56181 ) * on Sunday April 03, 2005 @07:59PM (#12129754) Homepage Journal
      • 1) Programmer willing to work for percentage.
      This is one of the biggest challenges. Not everyone can work for no or minimal salary for a year or two, but it's a huge win if you can.

      Salaries are really expensive. Fully loaded costs (including benefits, etc.) are $10k/month. A few salaries and you'll have burned through all your cash before you know it.

      Burn rate is like a ticking clock on your startup. When you hit 0, it's game over, man. Keeping the burn low is key.
    • 6) Ability to work on what you are passionate about, and on a platform that brings joy to coding - priceless.

  • 5 figures? (Score:4, Informative)

    by sfcat ( 872532 ) on Sunday April 03, 2005 @07:22PM (#12129556)
    If you can get a company going for five figures, you have my respect. I am trying to get a startup going and after doing alot of analysis, the cheapest I think I can do it is for just over 7. Each business if different but getting one running for 90K is just about impossible. That won't even cover two people for six months. I guess you would need a product already written and a customer already signed up to even think about this. But FOSS does make running a software business alot cheaper. If you have five developers, it would save probably 5K a year at least and that is assuming you don't need anything special that can be replaced with a FOSS alternative. Good luck.
    • I'd agree that the largest part of a startup's expenditure is paychecks for a minimum amount of time. Cheap office, ebay machines and OSS software arent a big fraction, paychecks and marketing costs are.

      For this reason, if you can start it up alone, or with a relative/friend, costs will be minimum, or else do a partnership. Another option is to have customers already lined up, in case youre splitting from a company and stealing their customers, or you know a company in need of such services/products. Diffe
      • I won't venture to say "No, you can run a business with 5 figures or less".. because it is likely that the business you have in mind requires fairly heavy investment in equipment (if you are into manufacturing, for instance).

        But having started two companies, I can advise you to try and lower the entry cost a bit by leasing/hiring equipment and space instead of going for outright purchase.

        Ofcourse there is stuff you cannot lease (for instance, you may not be able to lease an offset printer - if printing is

    • Each business if different but getting one running for 90K is just about impossible. That won't even cover two people for six months.

      In Soviet Russia, real men don't take salaries from their startups - they burn through their life's savings.

      And when their life savings are spent, they max out all their credit cards.

      And when they've maxed out all their credit cards, they auction off their mint condition copy of Amazing Fantasy #15.

    • Re:5 figures? (Score:5, Insightful)

      by mcrbids ( 148650 ) on Sunday April 03, 2005 @07:42PM (#12129657) Journal
      If you can get a company going for five figures, you have my respect. I am trying to get a startup going and after doing alot of analysis, the cheapest I think I can do it is for just over 7.

      Then maybe:

      1) You have a sucky idea. The best ideas are actually little more than a logical culmination of pre-existing forces, and really don't require the loss of a kidney to bring to fruition.

      2) You have lousy marketing. You should be able to cover much of your initial cost in the first sale or two. If you can't, you might see #1 above, or maybe #5 below.

      3) You lost the idea of a "partnership". Typically, you have at least two guys: a guy with the marketing skills, and a guy with the tech delivery skills. There may be a third/fourth partner depending on the situation. These people get together and get paid with a percentage of the company. It's typical to moonlight to provide food money during the startup phase. If you're lucky, your "day job" complements your new business.

      4) You are fatally unrealistic in your cost analysis, see my earlier post about card tables. I just commented on managing costs a few minutes ago... [slashdot.org]

      5) Lastly, maybe your idea is too big in scope. Start with something a bit smaller, or maybe just part of your idea, and get it working and profitable before biting the whole banana.

      I've started a number of businesses - some I've run quite well, some have run straight into the ground. Be cheap, work hard, and focus on turning a profit ASAP. If it takes very long to get to profitability, from where I stand, you're walking the wrong road.

      • Re:5 figures? (Score:3, Insightful)

        by aldoman ( 670791 )
        Look at Google though.

        It must of took, what, 3 years at least to even start making money with them. Now they have a market cap of over $40billion.

        But yes, your advise is sound, but don't forget some of the best companies have been a complete gamble. Keeping costs low is always very important and if you can save $800 on your server setup with OSS, that could be the extra week than you need to survive in business and get that big contract.
    • Each business if different but getting one running for 90K is just about impossible. That won't even cover two people for six months.

      Then you don't want success badly enough. How about not taking any salary for the first year or two?

      I've done several startups and had guys who wanted their full corporate salary and a big chunk of equity.

      Quite simply it doesn't work that way. If there's no risk, then there's no equity.

      If you don't believe enough in your idea that you're willing to sacrifice everything
    • one time costs:
      - 2 nice computers - 2x1000 euros
      - furniture & extra - 1000 euros

      per month:
      - 1 nice apartment - 200 euros/month
      - 3 programmers - 3x1000 euros/month

      6 months product development plus 6 months for product adoption results in:

      3000 + 12x3200 = 41.400 euros that's around 54k USD

      of course those prices are for a country like Romania and you get to be the 4th programmer BUT it can be done with 5 figures and bare in mind that for 1000 euros you get pretty good programmers here.
    • >Each business if different but getting one running
      >for 90K is just about impossible. That won't even
      >cover two people for six months.

      Have you considered the possibility of doing your startup part-time for a while, and having another job to pay the bills? This would of course take longer to get things going, but could help with the money situation a bit.

      A friend of mine and I are working on an idea, and we're doing this part-time. He's left his job to do self-employed contracting work to pay his

  • Proven in technology companies (Score:5, Insightful)

    by kbahey ( 102895 ) on Sunday April 03, 2005 @07:24PM (#12129567) Homepage

    If you think of Google, their infrastructure runs on top of Linux on cheap commodity hardware. How much would it cost them to do what they do if they were forced to run on proprietary hardware and software? For example Sun on HP in 80s or early 90s? Not to mention how much Windows server licenses they would have needed if they went that route.

    Another instance is Yahoo. They use a hodge podge of languages and databases for various parts of their online empire. There seems to be a trend towards open source solutions laterly, for example PHP and MySQL.

    Yes, open source does save a lot. Not only now, but ever since the GNU C compiler system came out.

    • Lower costs don't mean shit - they just lower the entry barrier (if anything, that means more competition = harder to make money for new startups).

      With UNIX (for example), an average startup would have to shell out 500K on equipment, now with Linux they need 100K. What does that mean? Nothing, because EVERYONE does the same thing, so it doesn't actually help anyone involved break even faster (as their costs are lower, their selling prices are lower, and as I said above there's more competition).

      Right now

      • Two points:

        • Only those who have bought into the Open Source 'paradigm' benefit from it. Many PHBs are still scared of Open Source because of FUD, liability, TCO and other BS from Microsoft and others. Many still develop and deploy on Windows only, or on proprietary UNIX.
          This is fine in itself, but to those who have seen the alternative, they do have an advantage.
        • Needing less money makes courting the Venture Capital that much easier. Instead of asking for several millions, you ask for just one or two. Wh
        • Needing less money makes courting the Venture Capital that much easier. Instead of asking for several millions, you ask for just one or two. Which is easier?

          I don't know about asking, but I would bet that it is easier to get twenty million than it is to get 1 million. Most VCs don't care about companies with a valuation of 2-6 million, it isn't worth their time. See this http://www.paulgraham.com/venturecapital.html [paulgraham.com] from Paul Graham (creator of Yahoo stores). Since they have to manage each deal, venture c
  • Linux over Windows will greatly reduce your startup costs, not just for your PCs but for your development kits as well.

    But if you're a software technology shop, it's not easy to base your company on a foundation that may be ripped out from under you and developed by a competitor who takes your source and repackages it under their brand.

    Surely there are many companies that are using the open source code out there, putting it into their systems and then not releasing the fixes/changes back into the open dom
    • > Surely there are many companies that are using
      > the open source code out there, putting it
      > into their systems and then not releasing
      > the fixes/changes back into the open domain.
      > (I know of several companies doing that). So
      > yeah, you can make money that way.. but it's
      > not exactly following the GPL.

      you only have to release your changes IF you re-distribute the GPL code in any way. if you only use it internally on your own machines, there is no requirement to release your changes.
      • Linux over Windows will greatly reduce your startup costs, not just for your PCs but for your development kits as well. [...] But if you're a software technology shop, it's not easy to base your company on a foundation that may be ripped out from under you and developed by a competitor who takes your source and repackages it under their brand.

      What does this have to do with Linux versus Windows? You can write a closed-source app that runs on Linux, and it doesn't violate the GPL.

      Or did you mean open-sour

      • bcrowell said: Or did you mean open-source versus closed-source? But if you want your app to be closed-source, then of course you wouldn't use GPL'd libraries -- you'd use closed-source ones, or open-source ones that were released under LGPL or BSD. Otherwise you'd be the one ripping something out from under someone else. Not quite true. While there is admittedly some controversy over this, if the application merely links to a library, then there is no need to provide the source so long as they don't dist
      • I meant Linux vs. Windows in the "which operating system do you run as a company". In that case "open source" definitely saves you money for almost the same functionality (unless, y'know you gotta run Clippy or something...)

        I'm well aware you can write a closed-source app on Linux and an open source app on Windows. Open source is great up to the point where you want to SELL your software. For something like game software, this is certain death. Especially if I have to release my game engine back into t

  • Lower Startup Cost, yes. May cost you on the exit (Score:3, Insightful)

    by Anonymous Coward on Sunday April 03, 2005 @07:32PM (#12129611)
    One thing you need to watch out for is that you really own your own IP when you are working with GPL code. GPL is great, but it can make any code you create on top of it open source if you are not careful. If you are a CEO of a software startup that is looking to sell to a larger company and make your millions, then the IP issues around the GPL can literally be the difference between taking home millions and having a company with zero defensible IP. GPL code use can be the king of all deal killers if you are not VERY careful about how you use it. The GPL does a great job of what is designed to do, making sure that everyone who extends GPL code gives everyone else access to their code too. Just make sure that this is really what you want to do when you start.

    • maybe, maybe not. (Score:4, Interesting)

      by bluGill ( 862 ) on Sunday April 03, 2005 @07:55PM (#12129738)

      The GPL is not evil, it is just something else to watch for. However if you are careful you can manage the GPL just fine. Just make sure you can send out the source code when someone asks. (Which doesn't happen often, most customers won't care) Then make sure that you keep GPL stuff separate from your stuff. We ship a GPL pdf2txt program where I work, not a problem, we just call it as an external program and read the result.

      In some cases we will even release source code. pdf is not our core ability, so if we find a bug in pdf2txt we are likely to send it in so everyone can use our fix. We won't let you see the parts where we have added value, but those parts are carefully not GPL, and they are what you pay for. (Though admitidly you could do everything we do yourself given a year)

      The above assumes that you are a developer trying to sell a product. In many cases you are selling your services to setup GPL software to someone else. In that case you don't care about IP and GPL because anything you write is paid for already by the customer.

    • This is a load of lies (Score:3, Interesting)

      by spitzak ( 4019 )
      Your "IP" is not threatened. If you use GPL code in your program and then sell it without releasing the source, you are guilty of copyright violation. There is no precedence for somebody being guilty of copyright violation having to give up the rights to their own work.

      What will happen is you will be required to cease distribution and pay a monetary fine, if anybody catches you and sues you. If you wish to redistribute the work you will have to remove the GPL portions and replace them with other code that
    • Mostly irrelevant. Whether your sell widgets or software, you can use FOSS software to do stuff like have a website, track bugs and feedback, etc for free (more or less) - instead of spending money on Win2k3 Server, MS SQL, VS.Net 2k3, etc. Using GPL'd software wont encumber your product.
    • Exactly the same with closed software. You can buy compilers that have, deep in the 5th layer of the EULA, a clause that states you don't own the software you produce, or can't distribute it, or have to pay patent licensing fees or something.

      I guarentee you that extending GPL code is no different than extending microsoft's code. You have to contact the copyright holder (e.g. trolltech in the case of QT, Microsoft in the case of whatever they make) and they decide if they want to sell you a license or not.
    • GPL is great, but it can make any code you create on top of it open source if you are not careful.

      Then you need to form your software development strategy in a way that people pay you to get to get the software you make up and running on their systems. Explain your potentential customers that "Open Source" will mean added benefits for them, other people and companies might add or improve features, source is always available, etc.

      Be the best to implement your software in other businesses.

  • Time to market is (nearly) everything (Score:5, Interesting)

    by Anonymous Coward on Sunday April 03, 2005 @07:41PM (#12129652)
    The startup costs are one thing; but time-to-market is another huge factor. And what the article missed was the time-to-market factor.

    I've done a number of successful embedded projects, and you just can't beat the time-to-market involved with Open Source. I can beat any closed source project hands down if you're talking about new hardware.

    What I commonly see is that something unforeseen will arise. With commercial closed-source solutions, I'd be stuck waiting on the Vendor to provide a solution. Often that same solution either already exists, or is easy to implement, in an Open Source implementation.

    Recently I saw this on a new motherboard. The ROM BIOS guys (at the mobo company, and at the well-known ROM BIOS company) had lots of problems when we were bringing up new hardware. So we just grabbed LinuxBIOS, and we could diagnose the problem quicker than they could. But I've seen this theme time and time again.

    When someone tries to recruit me, I write them off now if they are using something like VxWorks. I really view it as a red flag that they don't know what they are doing.

    The bottom line is that I need solutions, not problems. And Open Source either solves it immediately, or allows me to solve it faster than Closed Source. That's why Open Source products are now becoming prevalent.
    • I write them off now if they are using something like VxWorks
      And what Open Source alternative to VxWorks would you recommend? I'm currently in a team developing educational content voor a Realtime course and the lecturers want to base it on VxWorks as they say it's the market leader.

  • It's more than the price (Score:3, Insightful)

    by HangingChad ( 677530 ) on Sunday April 03, 2005 @07:42PM (#12129660) Homepage
    Price isn't the main consideration but it does give you a lot of functionality. With Linux I can do all the regular paperwork and office work I need to. The ads that come off my printer look just as good as people using MSFT and Photoshop.

    It's more than just price, it's also the functionality you get. Open source fuels new businesses.

  • A really cool tool for small businesses is SSL Explorer [3sp.com]. It's a free SSL VPN.

    A member of our LUG wrote an article on SSL Explorer [sblug.org] that I contributed to about how to set it up.
  • This is very true. Our startup, Findory [findory.com], runs on a cluster of commodity hardware running open source software (Fedora, Apache, mysql, perl, etc.).

    Our burn rate is very low, improving our chances of survival and reducing our risk.

    Open source is a huge help to startups. It's provided a tremendous boost to innovation.

  • Is it really the money? (Score:3, Interesting)

    by ramblin billy ( 856838 ) <defaultaddy@yahoo.com> on Sunday April 03, 2005 @07:49PM (#12129691)

    My understanding of the lofty side of the Open Source Movement is a little more esoteric. I may be missing the point. Is the real upside to 'free software' all about the money? I thought the point was the transparency of the information handling method. The obvious benefit is the access to other designers conceptual products. This allows for integration from various sources to facilitate the optimization of each system component. It is the basis of the 'standing on the shoulders' and the ever popular 'don't reinvent the wheel' philosophies. Even more important is the publics access to the code. In an open information society it is fundamental to be able to determine the source, path, and handling methods for data delivery. It's the only way to keep the rascals honest. I love my computer, but I don't want to just take its word that some Bush descendent has once again pulled out a squeaker in Florida. I've developed a sneaky suspicion that it harbors a Republican kernel. I've always thought of Open Source sort of as 'The Great Equalizer' which would finally break through the bullshit barrier of the powers that be. So am I giving the OS evangelists too much credit? Maybe most of them DO just like free stuff.

    billy - say it ain't so Linus

  • Why this is good for the economy (Score:1, Insightful)

    by Anonymous Coward
    Being able to try things with little risk means that more things will get tried. This means more innovation and this is good for the economy. Innovation leads to growth and we all get a little richer.

    This is not to say that large, well funded, companies do not innovate. They do. It's just that their innovations don't tend to be as radical as those of smaller, hungrier organizations. The small guys tend to specialize in disruptive innovations. It's those innovations that turn industry on its ear and i

  • Small Business (Score:2, Interesting)

    by ToAllPointsWest ( 801684 )
    As I've been researching opening my own small business, the cost of implementing a Linux solution is significantly lower than implementing a Windows solution. First, no CAL's to deal with, I can perform multiple installs of the OS, and the Opensource versions of the applications I need off all the functionality and reliablity to accomplish my mission. In laymens terms, it was a "no-brainer"
  • I'm thinking... "by not costing any money?" Startling!

  • I'm starting a company (Score:5, Interesting)

    by prisoner ( 133137 ) on Sunday April 03, 2005 @08:21PM (#12129915)
    right now and open source has saved us untold thousands. We needed a real phone system so that we would have voice mail and "sound" bigger than we were: Asterisk to the rescue. For a couple of $39 cards and an old pc we've got a pbx. Instead of using Oracle or Sql Server we're going with mysql and php. We need to print bar codes. $800 active X library? Nope, a php library I found on the web for zero.

    However, I think it really depends on the kind of company you're going to start. In our case, we're developing software for our own use. I can't imagine trying to bundle some of these pieces and sell them. Surely it would work with some things but, imho, no the majority of OSS projects. I don't say this to belittle the efforts of those who have done so much for me. The reason I say it is because the mindset of the vast majority of users runs completely counter to that necessary to effectively utilize much of the open source software available.

    Take Asterisk for example. I had to reboot my phone 4 times on Friday to fix various problems. I'm not crying, just pointing out that the first time you tell a user to reboot his/her phone, they are going to look at you like you have 2 heads.
  • I would theorize that lower startup costs mean more jobs, which is so straightforward it is almost not worth pointing out. Except for those who say the open source destroy jobs.

    • Well, all in all, OSS means more jobs indeed. In most settings, it also means more qualified jobs too, especially when it comes to development and/or administration jobs (yup, using OSS tools usually requires more skills). Which, in turn, means higher salaries. So, less jobs. I'd just venture that it's hard to claim one way or the other, here.

      For now, what I know for sure is that OSS allows many small businesses to make business. Simple as that. And that's already something big.

  • I remember 1995 (Score:2, Interesting)

    by ylikone ( 589264 )
    Me and a bunch of friends started up an ISP on nothing more than a few Slackware Linux 100MHz Linux boxes and about 16 14.4K modems. Our starting budget was about a few grand. Talk about shoe-string. We had no employees, completely run by the owners, doing work mostly for free on a promise of getting a big pay-off in the future. Later, after about 4 years and around 1000 customers, we sold the whole operation to a larger ISP. Although, we didn't get that much for our efforts... live and learn.
  • Whoever said Windows has a lower TCO than Linux was muttering utter bullsh*t.

    I think the Open Source community, including individuals, who can donate a few dollars, small businesses, who can donate a few hundred dollars, and large businesses, who can donate thousands of dollars, should get together and produce ads very similar to the Microsoft TCO ads found in magazines that show examples of companies that saved money by switching from Linux to Windows, with very specific settings picked out so that the Lin

    • You have an excellent point, and I agree completely with the example you give about everybody jumping and screaming that Bush lied when he didn't. But at the same time, the example itself probably proves your point, because you're stuck with a rating of 2, probably because either people see that you aren't a Bush-basher and mod you down, or you don't get modded up in the first place. It's a shame.
      • Bush didn't lie about what? If you're claiming that there exists a politician in the national arena who doesn't lie, then power to you. Very hard to prove, but I encourage you to try. If you're claiming he didn't lie about Iraq, fine. But to suggest someone get modded up because he thinks Bush didn't lie about something? I was under the impression that most Bush supporters know that he lied, but just don't care, like O.J. supporters. I could be wrong... but then, I'm never wrong :)
        • Quick question. If I hear about a LAN party and tell you it will take place on April 19, but for whatever the reason, (whether I am being dishonest or simply misunderstood what I read or was told) it actually takes place on April 18. If you then tell all your friends there's a LAN party at X location on April 19, and they all show up and there isn't one, did you lie to them? Of course not. You simply repeated information you thought was accurate that really wasn't.

          Now, if you're the President of the United
        • There is a lot of evidence from higher ups in the national security establishment that says otherwise. This is unprecedented, isn't it? There are contradictory statements on video. About impeachment: Reagan wasn't impeached for Iran-Contra, even though I, as a silly kid, honestly expected it. The media didn't even suggest it might happen. The spineless Democrats didn't have the guts to impeach such a popular president. Everyone knows Reagan lied-- how can you claim you don't remember whether you comm

  • A counterexample (Score:5, Interesting)

    by Bob Hearn ( 61879 ) on Sunday April 03, 2005 @08:52PM (#12130094) Homepage
    ClarisWorks was developed with a four-figure startup cost, starting in 1989, and became a top-selling product with millions of users. It's true that that success was not achieved until the program was sold to Claris, and additional development resources were added.

    But from the point of view of the original developers - myself and Scott Holdaway - our startup costs were very small. We bought two computers, rented a house together, and hacked. Details here:

    http://www.swiss.ai.mit.edu/~bob/clarisworks.php [mit.edu]

    I should add that from my personal point of view, the open source meme has made it much harder to figure out how to make a buck selling software. In the old days it was simple. OK, call me clueless. I gave up and went back to school.
    • Hey, that's a great story. Thanks for sharing it.

      But I have to point out, the 4-figure startup cost you cite is only the capital expense of your alpha phase. If you figure in what it cost you to live until Claris bought you, the value of Guy's contributions, and what Claris put in to make the product saleable, the number might seem more typical (that is the number required to bring the product to market). And let's give your wife credit for being a significant investor!
  • We are a startup company. I have a client which is also a startup. Their product is propietary software that is installed inside a cellular provider network. By using open source (Linux, PostgreSQL, Asterisk, JBoss, and a bunch of open source java libraries), I've saved them a lot of money; probably $20K USD per deployment, and there are about 6 deployments due this year.
  • That's absolutely true. Look at the makers of CherryPC... it's so easy to take code from open source projects like PearPC, bundle it up as your own and not even remotely give credit to the PearPC team... Heck, you could make thousands before people notice...

  • Who gains most from open source? Not US. (Score:2, Insightful)

    by Anonymous Coward
    Nobody has gained more from open source than startups in India, China, and Brazil. With less available venture capital than in the US, they needed more than just low wages to launch a new venture, since M$ Windows and Office cost a *lot* there. Their software expenses used to compose a very big part of a startup's overhead, probably to the extent of prohibiting a lot of ventures from getting off the ground.

    Open source to the rescue. Now with zero cost for software, overseas startups do not have to match

  • Flexibility (Score:3, Insightful)

    by LittleBigScript ( 618162 ) on Monday April 04, 2005 @12:35AM (#12131144) Homepage Journal
    Someone once said OSS was more about "code sharing" than "free software" But this obviously focuses on the secondary aspect of Open Source.

    Also, this shows the maturity of a lot of Open Source projects. I wonder if any of the projects end up contributing back.
  • when you're a small company and you can use off the shelf hardware to creat your own pbx instead of spending thousands, it is of benefit...

    what will be interesting is if there is a new generation of companies that continue to use and help develop these tools that benefit them as they grow, or just move on to proprietary software and hardware solutions...
  • I'd say that most open source solutions only save money for tech companies. Why? Tech companies have the massive technical expertise needed to handle open source solutions. For my startup, it wouldn't cost us many thousands more to go with open source for our various software packages because we don't have a tech expert on staff (besides myself). Other companies that have nothing to do with tehcnology (the vast majority of all companies) shouldn't be wasting valuable time and money to implement open sou
  • All of the startup workstation and supercomputer companies used UNIX since 1980 for the same reason. UNIX was a known commodity to customers, it had been ported many times so it was realtively portable. Developing a new OS would double the effort and costs of a startup. Apollo, DEC, Cray, and the early microcomputers were the last companies before this trend to roll their own OS's.

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