Until now, Microsoft and Sun have had only one thing in common their hatred for each other. Now they share something else: a fear of Linux.

Microsoft. Sun. Bitter enemies with only one thing in common — their
hatred for each other. Until recently, that is. Lately they have come to share something else: a
fear of Linux. And they are not alone. Throughout the software industry, companies of all shapes and
sizes have been asking themselves, “How will the open source movement affect our business?” Or, “Can
we embrace open source without destroying our traditional businesses at the same time?”

Pondering these questions is causing the fear level to rise at every software company whose
profits depend on the proprietary closed source revenue model. They are having difficulty adjusting
to the open source paradigm for the creation and distribution of software. The Linux OS represents
the ultimate manifestation of this movement.

What many people seem to be overlooking in the middle of all the hype is that open source is not
really a new paradigm at all. It has been around for at least as long as all of the companies that
now fear it. This begs an interesting question: if open source has been around all this time, how
come it is only now becoming a threat to the entrenched players in the software industry?

To answer this question, we first need to briefly explore the history of the open source
movement, and look at some of the differences in the underlying economic philosophies of the open
and closed software camps.

Closed source software relies upon the economic principle of scarcity. If there is only a single
source for a product, then consumers are at the mercy of that source. Thus, the source has ultimate
control over the direction and price of that product. Open source software (of which Linux is the
prime example) relies upon the economic principle of abundance. Which is to say, the more you share
something, the more valuable it becomes. No one source has complete control over the direction or
price of an open source product.

The Roots of Open Source

The Pied Piper of Free Software: Stallman was among the first to recognize the relationship between software and the economic principle of abundance.

In the late ’70s, Richard Stallman was one of the first programmers to assert the need for
hackers to have free access to source code whenever they needed it. Stallman began to articulate the
fact that software is different from physical resources, like oil or manpower. It is something that
you can share while never reducing your own possessions.

In fact, just the opposite occurs. When you share your software as source code with other
programmers and users, it enables them to debug, enhance, and modify your code. This creates an
environment with an inherent positive feedback loop that accelerates growth as more sharing occurs.
Such shared efforts are necessarily dynamic in nature and are thus quickly adaptable to any need.
With the rapid rate of change that exists in high technology, such flexibility is a valuable asset.
The founders of Sun Microsystems recognize this.

Speaking as someone who started the open systems idea (by the way the most criticized part
of the SUN business plan), it seems like open source is the next logical evolution of offering each
user or set of users just what they need and not everything everybody might want.

Change isn’t an event anymore (version 2,3…) — it’s a process. Adaptability and evolution
are far more important goals for systems, as opposed to the old goal of optimization (I could give
you a whole dissertation on this). Open source and Linux have fortunately fallen into this new
paradigm and are benefiting from rapid evolution, incremental changes, and modularity which also
implies customization and personalization.

— Vinod Khosla, founding CEO of Sun Microsystems, and a partner in the Venture Capital Firm of
Kleiner, Perkins, Caufield, and Byer

Richard Stallman went on to found the Free Software Foundation (FSF) whose motto is “All
software should be free.” But what does that mean? According to them, “free software” is a matter
of liberty, not price. To understand the concept, you should think of ‘free speech’, not ‘free

The FSF set as its goal to create an entire freely-distributable operating environment, modeled
after UNIX. The FSF’s system would also be licensed under terms that made it impossible to
redistribute any part of the system without supplying full source code with it. To highlight the
differences between themselves and the commercial Unices, the FSF named their system GNU, which
stands for “GNU’s Not UNIX” (it’s a recursive acronym). The license, which guarantees redistribution
of source code, they named The GNU Public License, or GPL (it’s also sometimes referred to as a
“copyleft”). Software written under this license is often referred to as having been GPL’d.

Meanwhile, at the same time Stallman was working on GNU, another important example of openness
based on the assumption of abundance was beginning to emerge. This was the ARPANET, which in the
early ’80s moved from being a Military R&D project to an academic network of researchers funded
by the National Science Foundation and called the Internet.

The ARPANET developers dreamed of protocols that allowed for robust and unlimited
communications. The protocols were described independently of the implementation and were made
available to anyone who wanted them. An environment evolved that fostered interoperability and
sharing at the hardware, software, and human levels.

Open consensus, and result driven processes organically evolved into the Internet Engineering
Task Force (found at http://www.ietf.org/tao.html). The IETF, which had no centralized
authority, or legal foundation, nevertheless became the incubator within which the standards were
grown. Interop became the forum where the interoperability between implementations and devices was
tested, debugged and proven.

At each stage the “common wisdom” of the day said that it would be impossible to use the model of
“rough consensus and running code” to make a system that would be robust and scalable. When AT&T
was approached by ARPA to implement the original network, the AT&T engineers told ARPA that they
had already proven that packet switching would not work. The International Telecommunications Union
(made up of the world’s telephone monopolies) mocked the “unprofessionalism” of the IETF process and
spent decades creating the OSI family of protocols which in the end was abandoned by most of the
world in favor of the “unprofessional” but robust, scalable and ubiquitous Internet Protocols.

If you are familiar with the evolution of Linux, this may sound eerily familiar….

To me it [open source] is no different than ARPA funding developments, like TCP/IP, and
granting them to the world at large. In the case of Linux the money/resources came from personal
donations, instead of being washed by the government. People make money when they create something
others want badly enough to buy it. Linux is not a charity case. It produces useful stuff or it

Microsoft is a mechanism for creating, distributing and servicing software. It has been
extremely successful. One could almost say it got started with free software. Didn’t they pay
something like 50K for Qdos? And they have done well for themselves and for the world.IBM sure as
hell would not have made computing as pervasive as MS has done. And for the same reasons people were
mad at IBM, people are mad at MS — they squelch innovation by virtue of their real monopoly. So
something like Linux has a chance. But will it be squandered like UNIX was, due to loads of
squabbling? Remains to be seen. Open interfaces promote diversity. Money is a great example of that.
But money is rather sterile. Linux is more fecund.

– Dan Lynch, founder of Interop and CyberCash, as well as private investor board member in
several key Internet companies.

Interestingly enough, it was the intersection of the Internet and the GNU Free Software concepts
that gave rise to Linux in the early ’90s. Linus Torvalds, then a computer science student in
Finland, got sick of not having an OS that he could explore, learn from and freely extend. So he put
out some messages onto the Internet through the comp.os.minix newsgroup (Minix was an early, not
quite free, not quite UNIX clone) and asked for input and help on creating a free OS (see sidebar below).

From: torvalds@klaava.Helsinki.FI (Linus Benedict Torvalds)
Newsgroups: comp.os.minix
Subject: What would you like to see most in minix?
Summary: small poll for my new operating system
Message-ID: <1991Aug25.205708.9541@klaava.Helsinki.FI>
Date: 25 Aug 91 20:57:08 GMT
Organization: University of Helsinki

Hello everybody out there using minix -

I’m doing a (free) operating system (just a hobby, won’t be big and professional like GNU)
for 386(486) AT clones.This has been brewing since April, and is starting to get ready. I’d like any
feedback on things people like/dislike in minix, as my OS resembles it somewhat (same physical
layout of the file-system (due to practical reasons) among other things).

I’ve currently ported bash(1.08) and gcc(1.40), and things seem to work.This implies that
I’ll get something practical within a few months, and I’d like to know what features most people
would want.Any suggestions are welcome, but I won’t promise I’ll implement them :-)

Linus (torvalds@kruuna.helsinki.fi)

PS.Yes – it’s free of any minix code, and it has a multi-threaded fs.It is NOT protable
(uses 386 task switching etc.), and it probably never will support anything other than AT-harddisks,
as that’s all I have :-(.”

This began a group collaboration via the Internet that grew into Linux. Linus recruited
volunteer software developers from around the world to work on a GPL’d UNIX kernel clone. Others
integrated the work being done with the FSF’s GNU software that neatly surrounded and supported the
Linux kernel. The fact that all of this software was developed under the GPL was key to keeping the
work done by all these volunteers in the public domain. The Internet, which has a complementary
philosophy of open standards, acted as a medium to foster a distributed development team and an
environment allowing thousands of developers and hundreds of thousands, if not millions, of testers
and users to cooperate in ways never before seen.

The open source model of ‘development at a distance’ is a compelling solution to complexity
management in software creation. It forces modularity, resulting in code that is generally more
elegant, more, secure, and more reliable than alternative techniques of software

– Hal Varian, Dean of the School of Information Management and Systems at the University of
California at Berkeley, and co-author, with Carl Shapiro, of Information Rules from Harvard
Business School Press.

Not surprisingly, GNU, Linux and other Open Source projects have given back to the Internet in
the form of many of the servers and services that make the Internet run. From the most popular web
server on the Internet — Apache — to BIND (which is the software that allows the Internet’s Domain
Name System to work), to Sendmail, which moves and delivers the bulk of the Internet mail, open
source software has become the backbone of the Internet. Most recently the GNU/Linux operating
environment has emerged as an extremely robust, portable, and scalable platform for the next wave of
open source software and services to be built upon.

In the last year, GNU/Linux and open source in general has emerged from universities, ISPs, and
programmer’s workshops. It has achieved significant mindshare alongside commercial OSes. Besides its
already dominant position as a platform for ISPs and business web servers, Linux has recently been
injected into corporate enterprise networks. System administrators who had used the system for
software development or other purposes quickly saw its flexibility and robustness, and were sick and
tired of having to come in and reboot the Windows NT servers at all times of the day and night.
Additionally, with the development of Samba (http://www.samba.org/) Linux became a better file and
print server for Windows than Windows NT.

“Linux snuck in the back-door, and corporate IT often doesn’t know it’s there,” says Dan
Kusnetzky, an analyst at International Data Corporation. At first management doesn’t know that
anything has changed except that their network is more reliable and performs higher. Eventually the
system administrators get brave enough to show
management what they’ve implemented, along with the
dramatic cost savings that a Linux servers delivers.

Compare the costs of a file and print server for a 25-person group using Linux or NT: NT
Server has a street price of $809, including a license for five clients. Two more 10-client packs,
at $1,129 apiece, brings the total to $3,067.

A copy of Linux from Red Hat — one of several companies that offer Linux support — costs
$49.95, and the cost doesn’t go up if clients have to use the server. If you have
a fast Internet connection, it doesn’t cost you anything to download it. If you want to install the
same copy of Linux on another server, or five other servers, or 50 other servers, it’s the same
price. And Linux lets you do the job with hardware that Microsoft and Intel have declared

– Dan Kusnetzky

This brief history of Open Source software and Linux brings us to the present. Until recently,
Open Source software kept a low profile. It was simply the stuff in the background that made the
whole Internet work. Now, however, cheap computing power and widespread Internet access have created
a huge grassroots movement around open source and Linux, accompanied by a surge in media
recognition. It’s widespread popularity has brought Linux into direct competition with a number of
major commercial OS vendors.

The Beginning of the End of
Closed Source as We Know It

With the US Department of Justice Anti-trust court case underway, Microsoft has tried to paint
Linux as a competitor, particularly in the more public forums (like the trial itself) as shown in
this excerpt from the testimony of Paul Maritz, Sr. VP of Microsoft:

“Linux is rapidly emerging as a major competitor to Windows. Indeed, the number of developers
working on improving Linux vastly exceeds the number of Microsoft
developers working on Windows NT.”

But in the more private trade journals the story gets twisted back to the usual Microsoft PR
message: “For IT personnel, the up-front cost of the operating system is a relatively minor
component of the total cost of ownership of a system,” a Microsoft spokesman said.

“Microsoft sees Linux as a competitor, and we see that as good for the market,” the spokesman
said. But Linux competes more with other UNIX systems, the spokesman said. “It’s unlikely someone
would move from NT to Linux. It’s more likely they’d move from an unexposed system to a Linux-based

Microsoft is the ultimate example of a company with too much invested in proprietary systems to
seriously consider the open source model. Faced with this threat to its revenue stream, Microsoft
has been carefully weighing its options vis-à-vis the open source movement and specifically

An internal Microsoft memo detailing their feelings on this subject was posted to the Internet
on October 31, 1998 and for that reason is referred to as “the Halloween document.” It can be found
on the web at http://www.opensource.org/halloween.html. One of the most interesting points in the
memo relates to Microsoft’s inability to effectively respond to Linux. Because there is no single
company for them to target and compete with, they are unsure of how to respond to this perceived

Faced with this dilemma, they have been considering options ranging from creating fear,
uncertainty, and doubt (FUD) around Linux in the marketplace to taking legal action against Linux
and/or Open Source software, but it is unclear how they would execute such strategies. It is
precisely these predatory tactics that have led to the government’s aforementioned anti-trust suit.

No matter what the outcome of that case, it has already had a beneficial side effect for Open
Source software. By tying Microsoft’s hands in court, many of Microsoft’s partners and customers
have been granted enough breathing room to allow them to act without the fear of instant
retaliation. Many of them (Intel, Dell, Compaq, IBM, etc.) have used this breathing room to embrace

“Linux threatens commercial operating systems and provides a model for freeware development.
Previously confined to the fringe of the computer industry, Linux is breaking out, with a huge
potential impact,” says Tom Kucharvy an analyst for Summit Strategies. “Even if it does not capture
the operating system market, Linux serves as a model for open source software and is thereby laying
the seeds for a revolution in the software industry.”

Hardware system vendors who only a few months ago would not even acknowledge an alternative to
Windows 98 and NT are now trying to outdo each other with their Linux announcements. This will soon
be mirrored by peripheral manufacturers: video cards, cameras, scanners, etc.

Demand for applications and support for Linux is growing rapidly. Customers appreciate the
ease and reliability of purchasing integrated Internet-based solutions through the Hewlett-Packard
Covision program, and through our alliance with Red Hat, they will now have the flexibility to
select solutions built on the Linux operating-system platform.

– Greg Mihran, head of Internet Business Development for HP’s Personal Systems Group.

All I Needed to Know
I Learned from Open Source

One cannot overstate how important it is to the open source community not to repeat the mistakes
made by Netscape Communications. They confronted Microsoft on Microsoft’s home turf and lost their
competitive edge by treading there. Netscape made its original giant leap ahead by creating a new
paradigm in an area where Microsoft was not a powerful force. They were well on their way to
creating a defendable new marketplace. By directly challenging Microsoft, Netscape stopped focusing
on doing exciting new things, and instead focused first on competing with Microsoft and then with
not getting steamrolled by it.

It is also important that we learn from the mistakes of the UNIX Wars of the ’80s, where petty
differences, arrogance, ignorance and greed stopped the first attempt at open systems and paved the
way for mediocre monopolies to fill the void. Stop and think before you flame a KDE person if you’re
into GNOME, or a BSDI guy if you’re into Linux, or even a Microsoft addict if you’re into open
source. “Religious” wars always lead to unnecessary conflict — much different than a healthy

The positive approach for the open source community is to stay focused on creating and extending
open source software. It is important that we continue to observe and learn what makes GNU/ Linux
and open source such a successful movement. We must also continue to study why the Internet
continues to defy logic in growth, capabilities, reach and valuations, and how new technologies
snowball and expand our horizons and possibilities. As more and more traditional software companies
embrace open source, we must remember our roots. We must remember that the closed source model
inspires both fear and scarcity, creating a vicious cycle that leaves everyone worse off. In
contrast, the open source model, inspires creativity, leading to accelerated growth and better

The problem for Microsoft, Sun and all the others is that people are beginning to discover this
for themselves. No marketing campaign in the world can change that.

Robert J. Berger is the President of Internet Bandwidth Development and has been working with
the Internet and UNIX since 1981. He can be reached at rbrger@ibd.com.

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