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Open source projects benefit from the network effects of a large audience of developers. A popular open source project will be contributed to and used by thousands of developers, who are continuously testing, deploying, and improving the software. The open source movement has created massive communities and a thriving, collaborative economy.
Infrastructure software companies are increasingly built within an open source business model. Databases, queueing systems, orchestrators, operating systems, and search engines have been started as freely available open source projects, and leveraged into billion dollar businesses. In previous shows we have talked about business strategy, go-to-market tactics, and licensing of infrastructure software.
There remains plenty of room for more open source infrastructure companies. We still need better databases and distributed systems management. But over time, open source will move up the stack. From Netflix to Uber to social networks to payments systems–all software verticals will become open source because the benefits of making your software open source outweigh the costs.
For many software business models, the competitive advantage is not found in their source code–it’s in their data, their network effects, their sales strategy, and their brand.
Therefore, it makes sense that someday the source code will be freely available, democratizing the infrastructure concerns and letting these software businesses move up the value chain and become less operationally intensive at the bottom of the stack. Rather than asking “why should we open source our code”, these companies will be asking “why shouldn’t we open source our code?”
Joseph Jacks is the founder of OSS Capital, a venture capital firm that invests exclusively in commercial OSS startup companies. Joe believes that over time, open source eats everything. In today’s show, we talk about the future of open source businesses, the impact of licensing, cloud providers, and cryptocurrencies.
- OSS.cash ($100M+ Revenue Commercial Open Source Software Company Index)
- Quantifying Decentralization