Open source creates market efficiences, not monopolies

John Prendergast takes issue with a recent post of mine, highlighting open source's efficiency in creating new markets.

Following on the heels of this post outlining a debate as to whether open source leads to a winner-take-all phenomenon, John Prendergast of Jefferies Broadview pinged me to suggest that perhaps Roy, Dave, and I were missing a critical point.

I asked if I could post his comments, and he graciously acquiesced. He writes:

I've got agree with you here and also with Roy et al. The reality is that both perspectives are valid.

There is a virtuous cycle in open source, where success goes to the successful, making second place an even uglier place to be in open source than in the proprietary world. However, and this goes to your basic point, there are many ways to create value for users and customers, classic differentiation in marketing terms. As a result, we're already seeing a dynamic where later open source market vendors are on a trajectory for success. Interface21 and the Spring Framework come to mind following JBoss as does EnterpriseDB with their implementation of PostgreSQL following MySQL.

What is different in the open source world compared with proprietary models is that open source tends to enforce a discipline of differentiation for later market entrants while proprietary markets have historically been more tolerant of me too copies. The result is that value for users and customers is built out broadly perhaps sooner than would be the case in a proprietary only market.

Isn't that interesting? More copycat companies in proprietary software than in open source. Looking around, it would seem that John is dead on. How many search companies do we have? Database companies (past tense and even now)? Etc. Since each of these companies thinks they're truly doing something different (only because they persist in believing that code is a big differentiator, rather than the fundamental service/value they provide), they tend to spring up in blissful isolation...all 3.2 trillion of them.

Open source software markets are free markets. Efficient. Proprietary software markets? Not so much.

Tags:
Tech Culture
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.

     

    Join the discussion

    Conversation powered by Livefyre

    Don't Miss
    Hot Products
    Trending on CNET

    HOT ON CNET

    Find Your Tech Type

    Take our tech personality quiz and enter for a chance to win* high-tech specs!