Tuesday, February 12, 2013

What Happens When We Win

By Guest Writer: Matt Asay

Mohandas Karamchand Ghandi
Credit: Wikipedia
For years a Gandhi quote has welcomed visitors to Red Hat headquarters: 

"First they ignore you, then they laugh at you, then they fight you, then you win." 

Over the last two decades, Linux and the open-source industry has played the underdog to Microsoft and other proprietary vendors. Suddenly, however, open source has moved from underdog to top dog in technology's hottest markets.

Now that we're winning in so many markets, how do we avoid the very same lethargy and decline that has troubled our proprietary peers?

It's hard to maintain hegemony. The incentives to continue to innovate and improve diminish the minute cash comes in without doing much to earn it. It's monopoly economics 101.

Consider the following: 

In 2012, Microsoft's Office business generated $24 billion in revenue, or 32.5% of the company's revenue. But if you used Microsoft back in 2000, you won't notice much difference in using it today. Sure, maybe you can save documents to the cloud. And maybe you can even rent the program online. But the essential Office programs haven't changed much in eons.

This is one reason that business productivity has moved beyond Office. 

More work happens on the web, or in email, or over social media. Sure, people still inflict PowerPoint presentations on the world, and Finance can't get by without Excel. But,  innovation is happening elsewhere, beyond Office.

Just like what happened with Internet Explorer. At one point, Microsoft actually disbanded its IE development team, as it had such a commanding market share that there was no more need to improve the browser. Only after browser innovation moved to Firefox and, eventually, Google Chrome did Microsoft pick up its IE game again.

But this isn't an anti-Microsoft post. Microsoft was simply doing what any dominant monopoly does, which is invest elsewhere while milking money from its monopoly cash cow.

Think open source is immune?

In theory, it should be. An open-source project may have a wide array of contributors, all of them competing to steer a project's innovations in their preferred direction.

But this is sometimes more theory than reality. Apache HTTP Server, perhaps the poster child for open source dominance in a market, arguably went soft after browbeating Microsoft IIS into submission. Only recently has nginx arisen to force Apache to really innovate again, to positive effect. 

Any company or community can grow lazy when not faced with serious competition.

This is particularly true when we realize that many of the most interesting open-source projects are controlled or heavily influenced by single companies. Android is winning in mobile, but Android is written by Google. If Android comes to own 80% of the market, do you really think it will continue to improve at the rate it does now? Google simply won't need to expend those resources.

Now that open source sets the agenda in so many important markets, we need to take care for the aftermath. We've been gunning for the number-one spot in operating system, database, and other markets for years. Once we've attained them, the big question will be how to avoid becoming fat and lazy, ceding markets back to nimbler, proprietary competitors or, hopefully, to other open-source communities, similar to what nginx has been doing in the web server market.

Either way, we need to take care that we don't become victims of our own success.  

--Matt Asay

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