CEO Guide to Open Source Software

Business Week just published the ‘CEO Guide to Open Source Software’ and let me say it is pretty lame.  I can only hope that most CEO’s will look further than this report to be educated about Open Source Software.


The report is essentially a rehash of the messages from the VC funded ‘open source companies’ that are trying to ride the open source hype wave.  It features the usual speaking points: open source business vs the enterprise solutions, open source lowers user cost, and to keep up with current trends ‘open source companies will do better in the recession‘.   New this time is that open source companies have missed the mark, the model is broken, now CEOs should look to ‘new kinds of software companies that are focused on collaboration.’

This insanity must STOP.  Open source can’t be defined in these terms.  Open source is not broken

Don’t get me wrong, I am glad the companies mentioned are successful. However, they are successful and will continue to be successful because they are delivering value to their customers.  These companies act, behave and are small startup ISVs that are no different than any other ISV.  They will fail if they no longer provide value to their customers.  Open source software is not helping them do that.

Most software companies now use open source software to help create value for their customers.   The ‘open source companies’ are not unique.  They are claiming to be unique since most lead their own open source project but who cares?  There a thousands of successful open source projects.  The key challenge for any ISV is providing value that customers will pay for.  Open source vendors are no different.

So lets be clear:

1. Companies are turning to open source alternatives because they solve a specific problem and the existing commercial solutions are no longer providing the incremental value.  However, there is still a tons of value created by ISVs, they just now have to work a bit harder to define and communicate it.

2. Large enterprise software vendors are always challenged by small startup companies; a lot of new technology and innovation gets developed this way.  Open source does not change this.  It might make it a bit easier, due to lower barriers to entry, but large enterprise software vendors have also embraced an open source strategy.  As Savio Rodrigues as been saying:

Open source isn’t going to kill established software vendors. Open source must absolutely be a component of every software vendor’s strategy. This isn’t news either. I’ve only been beating that drum for two-plus year

3. All companies will be impacted by the recession.  As Dan Lyons recently wrote:

True, some companies gain share during downturns. But most don’t. Most just find that sucky times, um, suck. But times like these provide a rare opportunity for flacks to shine with outrageous lies and made-up stories.

It is too bad that Business Week has taken a very narrow view of open source software, and in my opinion the less interesting and sustainable view.  CEO’s definitely need to understand open source software and development but there is much more to it than the view that is presented in this report.


So if I were a CEO looking to understand open source software, what would I recommend?

First, go talk to your smartest developer(s). Guaranteed they will be able to guide you through the open source landscape.  Ask them what communities they participate in and how those communities operate.

Second, ask your IT management team what is their strategy for driving value in their organization by using or participating in open source communities.

Third, if your lawyers say no to the strategy, go back to #1, there is a solution.

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