In the digital world, the money is in analog

Open source offers a way to make money around software, by removing the need to charge for the software itself.

Glyn Moody is talking about something completely different (people in the digital age still happily paying for vinyl records), but his point is actually directly appropriate for open-source software business models. One way to make money in the recording business is through vinyl records. Analog, in other words, not digital.

This is actually the way Red Hat, MySQL, JBoss, Alfresco, and other open-source companies make money. Analog. People. Real services performed by real people.

The digital bits are easy. Hard to create, yes, but easy to copy, so why bother locking them down? The people behind the bits? Not so easy to copy. Hence, much easier to charge for.

There's an interesting principle for open-source companies in this. Find your analog. Then charge for it.

(Even more interestingly, this is effectively the same principle driving Web 2.0: the digital interactions of analog components of networks. People. The bits are secondary to the analog components. Take away the people, and the bits just don't matter anymore.

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