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The Cost Savings of FOSS: Business Success for the Wrong Reason

Apr 01, 2009, 19:31 (2 Talkback[s])
(Other stories by Bruce Byfield)

[ Thanks to James Maguire for this link. ]

"The increased interest in free software actually pre-dates the recession. Last spring, when the recession was only the concern of an eccentric minority, I talked to several venture capitalists, all of whom reported a renewed interest in FOSS.

"The main reason for the renewed interest, Larry Augustin suggested, was that, in contrast to the first interest in FOSS during the Dot-Com era, FOSS had proved itself. "Before, there weren't many examples of how to make it work. What has happened in the last couple of years is that venture capital firms have gotten very comfortable with the idea that they can build businesses around open source, and there are examples of it having been done," such as Red Hat and MySQL. Similarly, Lisa Lambert of Intel Capital pointed out that the close relation between FOSS and cloud computing was partly responsible for the renewed interest.

"Yet, even a year ago, the emphasis was on various cost savings. Lambert pointed out that, by adopting FOSS to their own purposes, companies can bring a product to market more quickly, and exploit niche markets that might not be worth developing with more expensive proprietary software -- rather like new mining techniques that make less accessible ore or oil less expensive to extract."

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