By Dwight Johnson
The Ziff-Davis Open Source Forum opened this morning in Austin,
Texas.
Designed to help enterprise IT management assess the real
potential of Linux and other open source software as a solution for
business, the conference is the only event of its kind to focus on
the business and technical pros and cons of Linux and the open
source software model.
Eric S. Raymond gave the opening keynote on “The Magic Cauldron:
Economics and Business Models for Open Source Computing,” which was
based on his recently published writing on the same subject.
Speaking to an audience of industry and business leaders, Eric
asked the fundamental question “How do we make money at this?”
According to Eric, it is first necessary to dynamite the myth of
software production dynamics that the sale value of software
governs production. We must distinguish between the use value and
the sale value of software. The use value is the economic value you
derive from using the software. The sale value is, of course, its
value when you sell it to businesses or individuals.
Eric pointed out that it is easy to verify that the use value is
dominant in production by looking in the classified section of any
newspaper for programming jobs — 19 of 20 programmer jobs are for
in-house only applications.
After exploding the myth of software sale value, Eric made the
important point that the assumption that sale value is the
predominant source of software value has lead to serious problems
in the software industry in which software companies attempt to
recover the entire cost of software production in the initial sale
price, thus neglectiing later service and support. This leads to a
single product dominating its market category and the spiral of
continual upgrades.
Since software is really a service industry, the best solution
turns out to be open source. Eric outlined the business models that
have been successful for making money with open source software as
well as several hypothetical models, using as real-world examples
companies like Netscape, Red Hat, Cygnus, Digital Creations and
O’Reilly.
For more information on Eric Raymond’s ‘The Magic Cauldron’, see
http://www.tuxedo.org/~esr/writings/magic-cauldron/.
Other keynotes for this morning are by Caldera CEO Ransom Love
and Linux International Director Jon ‘maddog’ Hall.
The Ziff-Davis Open Source Forum will continue today and
tomorrow with technical sessions.
Slated for tomorrow are keynotes by Red Hat President Matthew
Szulik and Tim O’Reilly, President of O’Reilly and Associates.
Linux Today is a sponsor of the Ziff-Davis Open Source Forum.
Other sponsors are: Red Hat, Caldera, LinuxMall, Dell, Sendmail,
Cobalt, VA Linux Systems, SuSE, SCO, Hewlett Packard and Atipa.