David Chappell

  • September 2020
  • November 2017
  • April 2017
  • October 2016
  • March 2016
  • February 2016
  • August 2015
  • April 2015
  • December 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • November 2010
  • October 2010
  • September 2010
  • August 2010
  • July 2010
  • June 2010
  • May 2010
  • April 2010
  • March 2010
  • February 2010
  • January 2010
  • December 2009
  • November 2009
  • October 2009
  • September 2009
  • August 2009
  • July 2009
  • June 2009
  • May 2009
  • April 2009
  • March 2009
  • February 2009
  • January 2009
  • December 2008
  • November 2008
  • October 2008
  • September 2008
  • August 2008
  • July 2008
  • June 2008
  • May 2008
  • April 2008
  • March 2008
  • February 2008
  • January 2008
  • December 2007
  • November 2007
  • October 2007
  • September 2007
  • August 2007
  • July 2007
  • June 2007
  • May 2007
  • April 2007
  • March 2007
  • February 2007
  • January 2007
  • December 2006
  • November 2006
  • October 2006
  • September 2006
  • August 2006
  • July 2006
  • June 2006
  • May 2006
  • April 2006
  • March 2006
  • February 2006
  • January 2006
  • December 2005
  • November 2005
  • October 2005
  • September 2005
  • August 2005
  • July 2005
  • June 2005
  • May 2005
  • April 2005
  • March 2005
  • February 2005
  • January 2005
  • December 2004
  • November 2004
  • October 2004
  • September 2004
  • August 2004
  • July 2004
  • June 2004
  • May 2004
  • April 2004
  • March 2004
  • February 2004
  • January 2004
  • December 2003

Opinari

Get the Feed! Subscribe

Why Microsoft is Serious About Open Source  
# Monday, October 31, 2016
 
Open source software has had a huge impact on our industry. Over the last several years, just about every big IT vendor, including Microsoft, has embraced this approach to some degree. Now with Azure, Microsoft is telling us that it doesn't care whether we use open source software or Microsoft's own technologies.

Really? Can they be serious? Has Microsoft embraced open source this completely? The answer is yes, and here's why.

In the traditional software model, vendors made money through selling software licenses, as shown below.




In this approach, the vendor provides software that runs on the customer's premises, and the customer pays the vendor a one-time license fee. While there might also be annual maintenance fees, the bulk of the money the vendor gets is typically from this initial license.

This makes open source software, which typically shrinks or eliminates the license fee, a threat to the vendor's revenue. Steve Balmer famously called open source a cancer. I don't know what was in his mind when he said this, but open source is certainly a cancer on the margins of the traditional license-based software business.

Today, though, this model is being replaced by cloud services. The picture now looks like this.










In this situation, the vendor runs the software, and the customer pays a monthly usage fee. Whether the software that provides a cloud service is open source or proprietary or some combination of the two doesn't typically have much impact on what the customer pays. They're paying for the service rather than licensing the software.

This is why Microsoft is serious about open source in the cloud. Offering open source services, such as Azure's support for Linux, Node.js, and Hadoop, just gives Microsoft more things for customers to use. Because there's no software license revenue to protect, Microsoft need not care about what kind of software it deploys to provide a cloud service.

In other words, offering cloud services using open source software lets Microsoft make more money. And we should always trust Microsoft to do the things that will make them the most money.

In the pre-cloud era, open source was spreading into more and more areas, so much so that it was getting harder and harder for software companies to make money from traditional licenses. With the rise of cloud computing, this problem goes away, since vendors are now charging for usage. Maybe the cloud came along just in time to save the software business from the margin-destroying cancer of open source.



2 comments :: Post a Comment

 


Comments:

From what I understand, Steve Ballmer didn't call open source itself a cancer, but the GPL licence, which still can be understood from a commercial vendor's perspective.
 

I interpreted his comment that way, too, which is why my note above says that open source is a cancer on profit margins. In any case, the analogy between the metastasizing GPL and cancer isn't too far off.
 

Post a Comment


<< Home