What is the next stage in the evolution of open source? Companies like Red Hat, VA Linux, and Linuxcare are betting they can build businesses without selling proprietary software, but can they?
We are well into the age of astronomical investments and driving valuations of Internet companies. Eyebrows are no longer raised when a risky start-up with an unproven track record scores multimillion-dollar investment from venture capitalists. Most analysts and market watchers agree that not ALL of these companies can succeed, but time and again they predict that some of them will. The process, then, is one of laying bets, and investors are betting heavily. Indeed, Linux and open source ventures are lately among the most popular draws for this kind of speculation.
Efforts have been made by many of Linux’s staunchest supporters to convince the community that Linux (and indeed all software) isn’t really a product, but rather a service, and that the fact of this distinction will ultimately make untenable the proprietary business model for software. Open source advocates have argued this point convincingly; but however compelling these arguments may be, the fact remains that only one software business model has proved capable of driving an entire industry and making millionaires of geeks the world over: Microsoft’s.
So, with the Y2K doomsayers temporarily unemployed, pundits are now turning to the Internet economy, and the open source companies that have spun out of it, looking for signs of collapse. Though he doesn’t fall into the “doomsayer” category, Larry McVoy, CEO of Bitmover, Inc. and a former top scientist at Sun Microsystems, says it remains to be seen whether the…
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