Where Are All the Open Source Billionaires?

“The lack of open source software billionaires is by design. It’s part of the intent of open source software – to balance the scales by devaluing the obscene profit margins that exist in the commercial software business.”

no shit. This is the dumbest coding horror article i’ve ever read. Thanks for stating the obvious. talking about opensource and riches is oxymoronic. and it’s only propeitary fanboy “sheep” that would ever put the words rich and opensource in the same sentence.

Very well said Jeff, indeed who asks “Why aren’t there any open source billionaires?” doesn’t understand the reasons behind this development model and the fact that you need a good business model to support it in order to make profit out of it. Also I believe they fail to see the true potential about being open and the advantages that it can bing like large communities that form behind it and the easy way in which it can be adopted.

Have fun!
Mihai

Your last point sums it up perfectly. The value is not in the software but what it does for you.

"ITS NOT ABOUT THE MONEY, for crying out loud. its about doing something worth doing.

christ, some people just don’t get it."

yes, you’re working for the better tomorrow and I’m in “IT” for the money.

huh? the premise of the article seems rather ill-formed. I see no necessary causal relationship between a particular technology and a success level. plus, it so happens (from the article!) that there are open source billionaires! odd, very odd.

WOW!!! Thank you thank you thank you. If only this was available when “not to be named” thought to themselve we should get a blog, oh and use word press. Never mind the multiple flaws and dangers involved, but when the database got screwed, they all wondered what happened, some screw up in the dashboard. No 1 - 800 number to call, no customer service rep, no tech support email addy. Oh wait, that’s right it was free. We didn’t pay for that. And didn’t much help from that wonderful host that specializes in open source apps.

Open source has its time and has its place. But to think it will yeild across the board profits, or make closed source apps absolete is insane. There’s room in the market for both, just like there is room for lawyers who charge $300 an hour, and those that routinely work for free… you know because they have passion for the job.

The only way to really make any money in Open Source is to land a big service maintenance agreement for a critical Open Source application. I have seen small development companies (5-10 developers) get multi-million dollar service cotnracts. So it can be done.

The benefit of Open Source is also it’s curse. Even though many developers can pool their resources to create a unique product, no one can produce a protected work. And before the label dries on the CD, there are a dozen varieties of your app out there.

I think the three big industries that can’t really afford to jump into a free-market software system are health care, education and government. I believe those three industries should be using nothing but Open Source software. The upside to that would be tremendous.

How many billionaires have started companies in the last 15 years, selling nothing but shrink-wrapped software? None.

Who cares, anyway? (a) Making millions is more than most anybody reading your blog, and (b) open source is the biggest competitor for proprietary software. How many companies make large profits on shrink-wrapped software? Very few. Let’s see you compete with Microsoft.

You might not like competing with open source, but that’s life. The vast majority of programmers don’t even make their living writing proprietary software for distribution. Here’s a better question: why does open source thrive? If software is worth billions, where is it?

And to the commenters writing about business models, stick to programming and let people who know something run the business. The cost of entering the shrink-wrapped software industry is very high, open source has lowered the barrier to entry, you have no idea how an open source software business works.

“ITS NOT ABOUT THE MONEY, for crying out loud. its about doing something worth doing.”

I do things that are worth doing every day at work. In addition I make money which allowed me to buy a Wii and a new car, and look into getting my own apartment.

I don’t see that happening with open source development. I don’t want to work as a burger flipper so that I can provide some esoteric “good” to the world through free software.

“There are real millionaires-- even billionaires-- who built companies on open source software. Just ask Larry Page and Sergey Brin. Or the YouTube founders. The real money isn’t in the software. It’s in the service you build with that software.”

I dunno. I think if I developed some tools, then some other guys used them to become billionairs I might be a little upset that I gained no recompense for the deal.

I guess I just don’t understand the motivation for open source development beyond being an arena to practice your skills.

I’m not an idealist on the matter, but your final point (about the Google and Youtube guys making buckets of money by building services on open source) makes me a little sad because those examples are of people who only made their money by stepping away from open source to a large degree.

Granted, Google still contributes significantly to open source projects. So they’re still good guys. But they do jealously guard their crown jewels and would never consider making those open source.

They will never, ever open source pagerank or whatever software runs adwords or whatever software runs youtube or gmail. Saying that “well, these are services, not products” doesn’t really make much sense to me. The software running them could be open sourced, and isn’t. (And GPL3 is going to close this “running a website isn’t distributing” loophole.)

There is no technical reason why they couldn’t open source gmail so we could all run our own; it’s purely a business decision to stay away from open source on the things that make them money. Heck, even something that is clearly a “distributed product” and doesn’t really make them any money like picasa is kept closed.

So, while Google definitely uses open source for their infrastructure and definitely contributes to open source projects, I think that it is a real stretch to call them an open source company. The conclusion that we should draw from Google is: use open source to lower your infrastructure costs but, whatever you do, don’t open source your company’s products/services.

I think you’re missing the point. Open-source is a development philosophy, as is the free software movement. It’s not a business plan.

To talk about the two like you have done indicates that you are trying to confuse people, or that you are confused your self.

To further illustrate my point, compare GNU with Redhat or Novel.

Two of those organisations make huge amounts of money.

All of those organisations are in the business of free (or open source as you have termed it) software.

To say that you can’t make money from free or open source software is a fallacy. The most lucrative part of the software industry is support, not distribution.

“Microsoft’s major benefit over open source - although it may not feel like it at times - is that they test their software in-house before shipping.”

this is NOT a benefit by any stretch of the imagination. Have you payed any attention to all the security issues that windoze has been through these passed years? you want to know why that is? it is because they only test in house. opensource’s “release early, release often”… is the BEST way to test. because users find bugs much better than programmers do. this is a fact. I think you need to re-read mythical man months chapter on debugging.

This is econ 101.

The open source model is one of an industry with perfect competition: no barriers to entry, no proprietary advantages of one competitor over another, free and open access to the means of production. (At least, it’s a helluva lot closer to perfect competition than the Microsoft/Oracle model.)

In perfectly competitive markets, suppliers never get rich. In fact, they never earn anything more than subsistence. All the benefits of economic exchange of value accrue to the consumers.

“I dunno. I think if I developed some tools, then some other guys used them to become billionairs I might be a little upset that I gained no recompense for the deal.” - Telos

Just because an application is open source doesn’t mean it’s public domain. You can still license your code (for example, GPL). If someone takes your code and uses it without giving you credit, it’s still piracy. Just like in school, if I write verbatim what an article has already stated (even if I “didn’t know”) it’s still considered plagiarism.

“The lack of open source software billionaires is by design. It’s part of the intent of open source software – to balance the scales by devaluing the obscene profit margins that exist in the commercial software business. Duplicating software is about as close to legally printing money as a company can get; profit margins”

many people make this mistake. The cost of software is not in the duplication, it is in the research and development. Software costs many hours in development, which amounts to many thousands of dollars (and sometimes millions). The reason there are (and probably won’t) no open source billionaires is because:

  1. Most people using open source are tech savvy and will just download it for free.
  2. Service based businesses take much longer to develop and usually fail because of the fact that you need to expand quickly (the more customers you have, the more employees you need to support the business. This is not the same with a software based business).

“To ask where the open source billionaires are is to demonstrate a profound misunderstanding of how open source software works. If you wanted to become obscenely rich by starting an open source software company, I’m sorry, but you picked the wrong industry. You’ll make a living, perhaps even a lucrative one. But you won’t become Bill Gates rich, or Paul Allen rich, by siphoning away the exorbitant profit margins commercial software vendors have enjoyed for so many years.”

Which is why it will always be on the fringes of the software industry. The problem with this view is that almost everything that is a leader in innovation is driven by profit (look at any open source project, even popular ones such as apache, mysql, and even linux…and you will clearly be able to see how far behind technologically the projects actually are compared to its commercial counterpart).

mysql: has only recently added support for triggers, stored procedures, and views.

apache: has only recently added threading control models that do not involved spawning one socket per process.

linux: still behind Microsoft (driver support, software support, and GUI). Since Vista seems to be tanking, this is the one chance linux has to dominate.

I think one of the only exceptions to this is firefox.

good articles

Don’t disregard the value of the open source software itself - just because something isn’t money doesn’t mean it isn’t valuable. JUST the linux kernel has been estimated at about $612 million to redevelop:
http://www.dwheeler.com/essays/linux-kernel-cost.html

Everyone who has a copy of linux is in a way a paper multimillionaire, they have got $612 million of development on a CD, and are free to do almost anything with it (unlike a copy of windows which is heavily devalued by your inability to legally modify and copy it).

That’s the thing about information - giving a copy to someone else doesn’t mean you lose the original. Life doesn’t have to be a zero-sum game. If A+B+C collaborate on open source development, A+B+C ALL have product(A+B+C) - this contrasts sharply with the physical world. And they haven’t lost anything if D gains product(A+B+C) too - even if D never does any work.

I agree that the way to make money in the open source world is providing a service.
That snappy timeline graphic is a bit misleading, seeing as how 95% or so of the market share for linux is shared by only 5 or 6 different distributions.

I’m not sure that comparing open source with Microsoft is really valid. Don’t forget that Microsoft is (and was convicted of being) a monopoly. That is certainly one way to become a billionaire - make enough money quickly to hire lawyers to keep the feds off your back long enough to make more money and get people dependent on you so the feds will be loathe to punish you too severely because it will adversely affect the economy.

@max

“…no shit. This is the dumbest coding horror article i’ve ever read…”

Easy there, buddy. You could have left out these two statements and I would have agreed with the rest of your post.