Jon’s Network

Take 30 minutes and read an excellent presentation given at EclipseCon last week by Brent C. Williams, (temporarily) independent equity research analyst The slides are posted at Stephesblog, a great blog on open source and the software business.

My favorite slide:

Myths of Open Source Business Models

• It’s a “weaker” business model than proprietary because there is no lock in.

• Somehow prices must be lower because the customer perceived value of open source equivalent is lower (”they didn’t have to build it all themselves, so I’m not going to pay as much”).

• Commoditization (Econ 101) will wipe out everyone’s profits

• Industry standards will wipe out whatever profits are left after commoditization

Brent also offers a detailed explanation of why neither enterprise software nor open source software are commodity products and that open source products resemble luxury goods.

It’s fantastic. Just go and read it.