Linux Open Source Shows Way Forward for Business: Matthew Lynn

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_lynn&sid=aqq4dVXwLQ8Y

Linux Open Source Shows Way Forward for Business: Matthew Lynn

Matthew Lynn is a columnist for Bloomberg News. The opinions expressed are his own.

July 12 (Bloomberg) -- Ever since the popping of the dot-com
bubble, the world has been short of technology visions.
We've heard little about the ``new economy'' recently.
Virtual-business models appear to have melted away. Digital
communities have splintered.

In one sense, that's healthy. Too much hype surrounded the
Internet. Too many grandiose claims were made for what often
turned out to be a revved-up version of catalogue shopping.

Yet there's also a danger. We may now be as complacent about
how computer technologies are changing the way business
works.

A contribution to that debate has just been made by Steven
Weber, professor of political science at the University of
California, Berkeley.

Weber's new book, ``The Success of Open Source'' (Harvard
University Press, 2004), discusses software programs such as
Linux and Apache, where the basic code isn't owned by any
single person or company, but is made available to everyone
who wants to work on it.

His claim, and it's a bold one, is that this isn't just a
good way of developing software, it's a new way of
organizing businesses.

In short, open-source software breaks the links between
developing a product and owning a product, which is the way
business has traditionally organized itself. That could have
startling consequences.

Academic Limits

It's rare to find a professor of politics discussing
software. ``People in academic subjects are very
conservative about their disciplines,'' Weber said in a
telephone interview from California. ``Political scientists
think that what they should be studying is politics, not
software. So people are intrigued, but also a little bit
nervous about an approach like this.''

Weber's starting point is Linux, the fabulously successful
computer operating system that is challenging Microsoft
Corp.'s Windows system. It was originally developed by Linus
Torvalds, and anyone can download it. It's not the only
open-source program out there. Apache, which runs the
majority of Web servers, is also open source.

That's very odd. The idea that you own what you produce is
one of the key concepts underpinning the modern economy.
``Stark economic logic seems to undermine the foundations
for Linux, and thus make it impossible,'' Weber says in his
book.

The snag is, it isn't just possible, but very successful.
About 40 percent of big American companies use Linux in some
form, according to Weber. Apache is used in 65 percent of
Web servers. If you use computers at all, you're using some
open-source software.

Linux Share

Framingham, Massachusetts-based research and advisory firm
IDC found Linux's share of server software shipments
increased to 23 percent in 2002, the latest year for which
data are available, from 21 percent in 2000.

A Merrill Lynch & Co. survey of 100 chief information
officers published in December found that 58 percent said
Microsoft's ``security issues'' caused them to ``seriously
consider'' Linux and other open-source alternatives on their
personal computers.

So open source shouldn't just be dismissed as a few
neo-hippy cranks running a vegetarian cafe. It's a way of
organizing production that has managed to smuggle itself
into the very heart of corporate life. It is becoming
central to the highest-growth, highest-value sectors of the
economy.

New ways of organizing the way people produce things don't
come along very often, but when they do, they are usually
worth paying attention to.

Marginal Beginnings

``If you go back to the beginnings of the industrial
revolution, what people thought was important were bodies
such as the state, the church, the army. They didn't pay
attention to new bodies such as companies and stock
markets,'' Weber said. ``What is marginal today can be
central tomorrow.''

That is the key point.

Open source as a way of writing software is noteworthy, but
ultimately trivial.

It is whether it has applications beyond the narrow world of
code that is interesting. If thousands of volunteers from
around the world can come together naturally and develop a
product that is challenging Microsoft, one of the world's
biggest (and most aggressive) companies, then what else can
they do?

How about the pharmaceuticals industry, for example, which
also needs to draw together massive pools of expertise from
around the world to devise innovative solutions to complex
problems? Or the aerospace industry? Or electronics? Maybe
in another decade we will be swallowing open-source pills,
then hopping into an open- source hypersonic jet.

No Control

Well, hold on. Not all intellectual property is going to
crumble in the next couple of decades. And nor are we all
about to start working for nothing, giving away what we
make. There's the mortgage to pay for starters. And most of
us like to earn money -- that's what gets us out of bed and
to that commuter train in the morning.

Yet the major point is this: On open-source products, people
sometimes get paid, and sometimes they don't. Companies such
as Red Hat Inc., International Business Machines Corp. and
Novell Inc. may pay people to write a specific version of
Linux, or to install the thing. It depends on the
circumstances. The key difference is that a single company
doesn't try to control the whole technology.

Why's that? Because the technology has become so complex
that no single organization can efficiently manage it.

For a comparison, think back to the invention of the steam
engine. By the standards of the time, building a railway was
so complicated, and required so much money, none of the
existing organizational forms could handle it. So the
joint-stock company and the stock exchange rose to
prominence. Something similar may be happening now.

Cynicism about new technologies shouldn't blind us to the
way the business is changing. New ways of organizing emerge
periodically -- and can be of huge significance. Open source
may well be among them.

To contact the writer of this column: Matthew Lynn in London
at matthewlynn@bloomberg.net.

To facilitate co-ordination regarding the introduction of OSS SW in Vietnam

Subscribe to OSS:

Subscribe | Unsubscribe