September 28, 2009 9:34 AM PDT
Can open source monopolize a market?
by Matt Asay
Open source is used to playing underdog to incumbent proprietary vendors. What will happen when open source dominates, rather than commoditizes, markets?
I ask because several open-source projects are not far from owning dominant market share in their respective markets. Mozilla's Asa Dotzler reports that Firefox is "on track to easily reach 25 percent of global usage by the end of the year." That may not sound like much, but given that Microsoft has been losing five percentage points of browser market share each year while Firefox gains five percentage points, and it's not hard to imagine Firefox surpassing IE's market share by early 2013.
Firefox isn't alone. Indeed, the Apache Web Server already dominates the Web server market, even despite new entrants to the market, as Glyn Moody highlights.
Linux, for its part, is still only 13.8 percent of the paid server market, while Windows Server still claims 38.1 percent market share, according to IDC. It has a long way to go, but in some markets like cloud computing and the growing Web 2.0 market, it plays a more authoritative role.
So, what happens when these and other open-source projects dominate their respective markets? Will it change how we market open source? Will it mean more research and development dollars must be invested?
Traditionally, open source has done a fantastic job of commoditizing expensive, well-understood markets. While I believe open source can innovate, particularly with companies behind open-source projects, it's still an open question as to whether the financial returns from open-source sales can pay for the heavy R&D and marketing costs that are generally required to create new products and new markets.
Open source has been better at business-model innovation than product innovation, though there are some notable exceptions.
Forget innovation for a minute, however: what will we do when Microsoft, Oracle, etc. are the runners-up, not the market leaders? Microsoft is a convenient (if inaccurate) proxy for all things that are bad in the software world for open sourcerors, but imagine the shift in thinking required to compete when, for example, Firefox has 80 percent market share and IE owns less than 20 percent. Who will we blame for our problems when our straw men are gone?
Perhaps none of this matters, however, as we could see dominant community-led open-source projects fork themselves long before they reach critical, market-dominating mass. It's not hard to imagine splinter groups forming within big open-source projects to take them in different directions, even as Joomla did with Mambo, Ubuntu did with Debian, etc.
The antidote to this is the open-source foundation. Among the examples of strong open-source projects that haven't forked--Eclipse, Apache Web Server, Mozilla Firefox--foundations have been critical to keeping these together. Linux, for its part, has been forked many times, but its core is held together by the Linux Foundation.
I believe the key to attaining dominant market share, and to preventing forks, is the open-source foundation. Over time, I suspect we'll see more "open-source companies" separate themselves into foundations, to manage the code, and corporations, to manage the monetization. This may be the only way to both liberate and dominate at the same time.
Matt Asay brings a decade of in-the-trenches open-source business and legal experience to The Open Road, with an emphasis on emerging open-source business strategies and opportunities. Matt is vice president of business development at Alfresco, a company that develops open-source software for content management. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure. You can follow Matt on Twitter @mjasay.
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