Why Wall Street Hates Open Source

The reason that makes sense is that open-source software companies don’t make much money.

When you offer code on a Web site, free for the taking, people tend to take it. Most won’t pay you for using it. Some might even try to make money from it, and the costs of policing a license violation don’t come back.

Most open-source benefits don’t go to the vendor. Most go to the customer. You make money from open-source by using open-source to make something.

Take Eclipse, for example. The Eclipse Foundation organizes the code base, polices the license, and builds a community around its code. Its funding comes from members and sponsors, who are all free to extend the code base to make their own products.