Proprietary vs. Open Source: Meritocracy and Innovation

“The next generation of computing is being led by users, rather than vendors.”

—Jim Whitehurst at OSBC 2011 (via Matthew Aslett)

Tech and business media outlets, from Business Insider to Information Week to Computer Weekly‘s Open Source Insider, have lately  been trumpeting Red Hat CEO Jim Whitehurt‘s clarion call to open source. Red Hat is a profitable self-described “meritocracy” that thrives by providing paid support and service packages for their popular Linux distribution, a business model that’s becoming increasingly popular in the industry. While many fans of open source wax philosophical about the cameraderie and spirit of sharing that supposedly bolsters the movement, its success in capturing market share lies in its adaptability to the business realities of its consumers.

In practical terms, this means that in order to avoid paying non-negotiable prices for “upgrades” to new versions of proprietary software that may feature little or no practical benefit, businesses are increasingly turning to open source options that can be tailored by contractors or in-house developers to the company’s own specific needs. This gives the company more control over both their software and their budget. Whitehurst gives an example from his own corporate history:

“I was at a certain airline when it went through bankruptcy. And during that period, we cut costs everywhere — everywhere but the IT budget got cut. IT expenses continued to grow. Finally, I got the joke. In IT, the game was stacked against the customer.”

“Stacked against the customer” in this case means that once a customer has sunk costs into a proprietary system and paid for a support contract, they frequently find themselves renewing and re-renewing licenses to their particular software, even after their business has outgrown it.

By contrast, users of open source projects are free to modify their code, or to just try out more systems before settling on one. There are, of course, poorly-written and badly-performing open source programs, just as there are in conventional closed-source vendor models. But these tend to sink to the bottom and lose support, as their users are free to move on to faster, better, more robust tools rather than “making do” with something because they paid a lot for it up-front. This competition drives innovation, ideally pushing the best projects to the forefront and attracting the brightest developers in the process.

We keep neck-and-neck with this innovative crowd, using open-source technologies whenever possible, and specializing in building sites on popular open projects like WordPress, Drupal, and CakePHP, themselves built on a venerable previous generation of open-source projects like PHP, MySQL, and Apache.

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