If you do not care then you should not use the word “open source business”. Open source becomes and enabler and not a business in itself. To be called a business you need to link the revenue directly with the product/service and not the revenue to the business performance accelerator.

If someone like Accenture was to say that they are in the People Business I can understand. Because they make money from selling bill time. But if Google was to say that they are in the people business because people are there single diffrentiating factor – I would not buy in

This whole company valuation of open source is harder to calculate because the advantage is not to one company. When there are few players or a dominant player selling closed source software, they can include new functions for free or reasonable cost that attract new users and increase their market share. In some cases, people use them regardless of quality. For example, if the product really does work terribly, but it is the only way to interoperate with a more important big tool that the vendor has lock-in for, then the weak-but-useful app gains lock in. Compare the quality of early Outlook with Eudora. If it had been a mere features and quality battle, we would be saying, “Outwhat?” But the ability to open important features via Exchange made it an actual competitor.

I would be interested to see what the overall market value of all open source companies is. I know that is hard, since many are private. We also get in to the question of what is an open source company. As you see, just changing the question to include Google and the whole equation tilts heavily.

The point is, the pie gets bigger, while each companies share of the overall pie gets bigger; is that potentially exponential growth?

Keep on predicting …

I don’t think you’ll see businesses like Microsoft or Oracle come out of open source. I completely agree with your point about Google being a business built on open source, and Red Hat being an exception in that it is a product company.

I’d say the fundamental thing that open source does is turn the proprietary software model on its head. No longer is most of the profit and control in the hands of software companies–it’s now in the hands of service providers. We own the customer relationships, and can pick and choose software that best meets their needs.

So it’s going to open up a thriving mid-market of software consulting companies, and some of those may turn commodity software into big business, the same way McDonalds did–by franchising. Open Source business scales horizontally.

That’s my bet, anyway, and what Freelock is all about…

Cheers,
John

[1] http://news.cnet.com/8301-13505_3-10172150-16.html

I’ve always told people “if you really want to make a lot of money from open source, then find a way to use it”.

This doesn’t mean that there is not money in writing open source… but I believe the overwhelming amount of cash that can be made is in putting it to work.

MySQL made the makers of it a lot of money… but that money is small in comparison to the amount of cash that has been made using it.

Cheers,
-Brian