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The rising impact of open source

Perhaps the most powerful movement in the software industry today is the continuing rise of "open-source" development--producing successful applications such as the Linux OS and the Apache Web Server.

You say you got a real solution
Well you know
We'd all love to see the plan
You ask me for a contribution
Well you know
We're doing what we can"

--"Revolution," the Beatles

Perhaps the most powerful movement in the software industry today is the continuing rise of "open-source" development--producing successful applications such as the Linux OS and the Apache Web Server. Open source is a seemingly impossible development methodology in which source code is developed and debugged by not one company or even one group of individuals but rather by a fragmented and distributed workforce simultaneously working toward a common goal. Believe it or not, these individuals are likely to have never met in person, and they provide most of their efforts on a volunteer basis. Lastly, one caveat of the open-source movement is that source code must be freely distributed to all customers and competitors alike.

Can this be real? Is it a fad? Can distributed volunteer developers really produce code that is reliable? Can open source impact the software industry at large? How can business models exist if all the code is exposed for free? Could open source impact my business? The answers to these questions may be surprising to you. What's more, understanding the open-source movement may be important to all business executives, as the lessons learned may have applicability for every industry, particularly as we move toward an increasingly bit-driven economy. With that as a backdrop, we will introduce six things that every businessperson should know about open source.

Open source works
If it seems unreasonable to believe that distributed volunteers can produce robust and complex software applications, then get over it. Open source works, and there is an increasing base of users for all types of open-source code--from operating systems to compilers to applications. This movement, which began many years ago, thrives on leverage. By distributing a task across a large group of "users," the project as a whole can move faster than if the project were controlled by a single entity. Most successful open-source software projects rely more on distributed testers and debuggers than actual developers, but the result is nonetheless amazing. Previous "top-down" attempts to organize a group of like-minded engineers (such as Taligent or the PowerPC microprocessor) have a stigma of failure. However, the loosely affiliated, bottoms-up, organic model of open source appears to be working. Last October, a leaked internal Microsoft document (now known broadly as the "Halloween" document) outlined the strengths of an open-source model and offered indirect credibility to the movement.

Open-source development can produce business-quality code
The most obvious testament to the business success of open-source code is the unwavering dominance of the Apache Web Server. According to Netcraft, Apache runs on more than 57 percent of the world's Web sites and has gained consistent market share, even during Microsoft's aggressive attack on Netscape. The leading open-source operating system, Linux, also is gaining steam. According to Red Hat Software, there were 12 million Linux users at the end of 1998. Perhaps more importantly, International Data Corporation believes Linux is running on 17 percent of all servers--most impressive, as the server market is considered more technically complex than the desktop market. Open-source allegiants believe that distributed testing actually leads to more reliable code than ever could be achieved within a single organization. Search the Internet for articles on Linux and you will find many users who believe open-source code is, in fact, "more reliable" than Microsoft's Windows NT. And while Microsoft will vehemently disagree with this view, the fact that the argument exists at all is a testament to the obvious legitimacy of open-source code.

Open-source business models are emerging
Believe it or not, it turns out that you can make money off freely available software code. Perhaps the best example of this is Red Hat, a company that packages, distributes, supports, and more importantly brands a version of the Linux OS. As with any software product, users value consistency and trust, and Red Hat has done a wonderful job of packaging and distributing the Linux OS. Sure, you can download the code for free, but for many users, $50 is a reasonable fee for code that is easy to install, comes complete with documentation, and comes with the support guarantee of Red Hat. As a testament to the importance of Linux, Compaq, Oracle, Novell, and Dell all recently invested in Red Hat, and each company entered into an agreement to either distribute or build upon the Red Hat OS. Efforts are underway to "commercialize" other open-source software code, such as Sendmail's move into the open-source email server space.

Open source is a tough competitor
Competing with open source is a bit like fighting the invisible swordsman. For instance, in the case of Apache, there is no company, as the code is maintained by a not-for-profit organization known as the Apache Group. In addition, the software is available for free, which eliminates price as a competitive weapon. The pricing tricks used by Microsoft to attack Netscape are less effective against an already free solution. And while Microsoft has begun to attack Linux, as well as the legitimacy of the open-source model, they have painted themselves in a contradictory corner by holding up the success of Linux as a competitive threat to be considered by the Justice Department. As variants of the open-source model proliferate, more companies will be forced to adapt to this faceless and distributed competitive force.