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Why No Billion-Dollar Open Source Companies?

Jun 11, 2010, 12:49 (4 Talkback[s])
(Other stories by Glyn Mody)


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"His answer was a good one. He said that he did think that Red Hat could get to $5 billion in due course, but that this entailed 'replacing $50 billion of revenue' currently enjoyed by other computer companies. What he meant was that to attain that $5 billion of revenue Red Hat would have to displace software that currently costs $50 billion. Selling $50 billion-worth of software – even if it only costs $5 billion – is somewhat hard, which is why it will take a while to achieve.

"I think this is the first time I've heard someone as senior as Whitehurst admit something rather profound: that open source solutions save money for customers by doing away with the fat margins for existing computer companies – and thus shrink the overall market. Opponents of open source like to paint this as "value destruction" that takes money 'out of the economy' - as if free software went around burning down offices and warehouses."

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