After writing about what is happening where with regards to Open Source software and services in my previous blog, I now want to take a closer look at the implications for the traditional market model out there. What does it mean that sophisticated products are distributed without any cost? Where will this lead the market?
Open Source, as we know, has basically rewritten the rules of how software is created. Making a valuable piece of information good freely available and freely editable by whoever possesses knowledge and creativity to do so. Firefox, Ubuntu, OpenOffice, MySQL and Apache are just a few examples of software that is freely available and has taken huge chunks of the market.
The German army uses Linux. Disney, DreamWorks Animation and Pixar are among many entertainment firms that create their movies using Linux.
It is evident that the open source idea caught on in a big way and that in countless corners of the digital market it is displacing proprietary software producers.
This can have only one logical consequence: software, as a product is devalued and becomes a given factor to deliver a certain service. Services are the future driving products of the digital market and the software required to deliver services is slowly but surely becoming a matter of course.
This sounds simple, but may be more revolutionary than we expect. Google provides a good example to illustrate this. Google offers the services of a convenient platform for virtual advertising. In order to be able to satisfy requirements for such a platform, it offers the primary product of the enterprise free of charge: the search engine. Could it be that the Open Source development may lead to companies creating gratuitous primary products, only to generate their revenue through secondary services? This would, from as far as I can tell, be a definite first!
By Johann Pfitzinger