Hard currency and open source

Andrew Jackson wanted to take the U.S. back to its agrarian roots, which sounds eerily similar, and equally wrong, to what some free-software advocates want to do with open source.

Andrew Jackson, 7th U.S. president

Over 150 years ago, President Andrew Jackson agitated for principles that will sound familiar to open-source software advocates. But his "back to our agrarian roots" rationale for doing so sounds as wrong-headed today as it did back then.

Jackson didn't write software, of course, but Jackson's rage against the "mysterious abstraction of commercial institutions" sounds right at home in the economic wreckage of the housing bubble, as well as the seething critiques of the waste and lock-in of proprietary software vendors made by open-source advocates, including myself. Jackson, as T.J. Stiles remarks in his excellent "The First Tycoon," hated banks and the rise of corporations because they devalued physical barter (e.g., I give you a service or physical good and you give me gold specie in return).

In place of such tangibles, banks and corporations leveraged physical collateral to sometimes ruinous degrees. A bank might keep $20 worth of gold in its vaults but print $100 worth of paper currency against it. The only way the system worked was if all participants went along with the scheme. If there were a run on a bank's assets (i.e., depositors tried to withdraw their money en masse), the bank failed.

It strikes me that we're in a somewhat Jacksonian mood in the software industry today, one that promises to both help and hurt the industry. Open source is one instantiation of a desire to return to physical collateral: instead of selling licenses we sell "hard" services (currency).

It's a good reminder of where true value in the system lies, but it can go too far. Just as banks and corporations represented real progress over Jackson's agrarian society, so, too, is a decoupling of physical software assets (i.e., the developers who write the software) from the proliferation of that software a Very Good Thing.

Professional services are nice, but they simply do not scale. Not in a pleasant manner, anyway. Ask any lawyer her least favorite part of the work, and most will tell you "billable hours." The collateralizing of software through open source is a way of foisting the billable hour system, and Jacksonian ideals, on the software industry.

It's progress, but only to a point.

What we need to find are models that collateralize software assets more than in the heady days of the 1990s, when software vendors printed money without respect for "hard currency" backing it, but not to the extent that open source limits its potential to deliver its benefits of transparency and distribution to the market.

This is why many of us are experimenting with so-called "Open Core" business models. It's why others are dealing in "patron" models whereby a company heavily subsidizes an open-source project while making its money on proprietary software. (Day Software does this, but so do Google, IBM, and others.)

This experimentation is good. It shouldn't be seen as a perversion of open source, but rather as a way to acknowledge open source's call for "hard currency" without taking us back into the Dark Ages of barter and trade.

In other words, while we should rightly say "good riddance" to Enron-esque software business models, it's counterproductive to demand a return to our "agrarian" software roots.


Follow me on Twitter @mjasay.

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About the author

    Matt Asay is chief operating officer at Canonical, the company behind the Ubuntu Linux operating system. Prior to Canonical, Matt was general manager of the Americas division and vice president of business development at Alfresco, an open-source applications company. Matt 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. He is a member of the CNET Blog Network and is not an employee of CNET. You can follow Matt on Twitter @mjasay.

     

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