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O'Reilly.net: The Strange Case of the Disappearing Open Source Vendors

Jul 01, 2002, 13:00 (15 Talkback[s])
(Other stories by Tim O'Reilly)

"Back in 1998 when the term 'open source' was coined, the story was simple: 'Just because there's no vendor behind software, it doesn't mean it isn't important. The Internet runs on open source software (BIND, Sendmail, Apache, Perl), so any enterprise that depends on the Internet also depends on open source.' As in the Sherlock Holmes story, Silver Blaze, the 'curious incident' was the absence of the expected. The press, the analysts, and the computer industry as a whole ignored open source software because no one was paying for it. An industry whose measurements were focused on vendor market share had no way to come to grips with a market segment in which software could be adopted by end users without money changing hands.

"But like the misdirection that often characterizes mystery stories, the first and most obvious conclusion may lead the investigation astray. Many people rushed to the conclusion that the answer was to monetize this market segment! Over the next few years, open source boomed along with the Internet, and we saw a huge influx of venture capital (especially into Linux) and several multibillion-dollar IPOs.

"In the summer of 2002, though, the story is much more sober. The dot-com boom has ended, the VCs and the stock market are in retreat, and of all the much-hyped open source companies, only a few are left. Red Hat is still flourishing, but VA Linux Systems has taken 'Linux' out of its name; Caldera, SuSe, Turbolinux, and Connectiva [sic] are joining forces; Eazel, Great Bridge, and Lutris are out of business, among many others. (Note: In addition to Red Hat, there are some quiet successes: Zope, ActiveState, and CollabNet all have continued solid growth. Disclaimer ((or should it be bragging rights?)): O'Reilly is an investor in all three.)..."

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