Rather than go to bed at the proper time last night I reviewed Sun's announcement around the Open Source Release of Java. Besides the the actual release of the software there were two messages that came across very loudly about how Sun see Open Source working for their business. This is how I interpreted what they said
Volume
The more entities and people that involved in doing something then the more value it has. Examples include the Internet and the fax machine. So the more people are involved in Java, as providers or consumers, the more opportunities there for business
Success in a standards based environment brings success for all the participants
When an ecosystem is engaged in activity based around open standards then any successes become an opportunity for all members to share. There are also opportunities for synergy and incremental innovation.
The point is that commercial success requires good business sense and luck -- having your revenue stream on Open Source does not affect that basic equation. Basing your opportunities on closed, proprietary, technology and standards may not confer significant business advantage in the longer term, particularly as the world is changing. So increase the opportunities and size of your market by making your products Open Source, however you still need leadership and business acumen to be commercially successful. For companies such as RedHat this approach is clearly working -- over the years the many, many, distributions of Linux where based on RedHat's Free product, but RedHat has continued to prosper. Does this work for smaller organisations? At least one newbie Open Source corporate executive I have spoken to has voiced the fear that simpler products cannot be so open to such universal exploitation. The premise is that the complexity of the Linux operating system is what protects the intellectual property of RedHat from being buried by the "free loaders". However this argument is flawed, their are a lot ofexperienced geeks out and RedHat makes their job easier, however there are enough clever people that the complexity of Linux is not a barrier. Notice that I did not suggest that using Open Source reduces your costs. Whilst there is a beneficial affect on time to market when using freely available components and possibly some costs savings I suspect that these are less than an order of magnitude. Successful Open Source companies spent their money on funding Open Source as well as other costs in participating in the community and providing customer support.

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