Why There Will Never Be Another RedHat: The Economics of Open Source (2014)

https://techcrunch.com/2014/02/13/please-dont-tell-me-you-want-to-be-the-next-red-hat/

by jayliew • 8 years ago

224 213 8 years ago

There is economics beyond that of redhat. Open source can and does exist without profit. Lots of people donate time/energy to projects every day and by doing so create great products that do compete (linux).

Skunkleton2• 8 years ago

While you are correct in general, Linux is not a good example of a project that is developed without profit. Most of the major contributors and maintainers of Linux are paid for their work. The companies that are paying for this work make huge profits from Linux.

bonzini6• 8 years ago

Does Intel or ARM make profits from Linux? They need to have it run will on their current hardware, and they can show future features in advance, but they don't directly make a profit from selling Linux.

reificator• 8 years ago

I agree with everything you said, until you claimed that Linux development is not driven by profit.

juliendorra• 8 years ago

More recent examples are of course Wikipedia and Open Street Map, both huge software and data projects.

steelframe• 8 years ago

tl;dr: Tragedy of the commons.

teabee89• 8 years ago

Admins: the title needs "(2014)"

sctb• 8 years ago

Updated. Thank you!

olivermarks2• 8 years ago

This old VC written article reminds me of Francis Fukuyama's 'end of history' thinking at the end of last century. https://en.wikipedia.org/wiki/The_End_of_History_and_the_Las...

VC's love the winner take all big platform investment world. I suspect (and hope) that era is coming to an end, not open source...

benwerd• 8 years ago

And in fact, we're seeing some great open source companies, including Elastic, which just had an IPO last month. Modern decentralization has yielded the promise of valuable assets that actually become more valuable through being open, which means that VCs in 2018 are singing a very different tune to VCs in 2014.

No, we won't see another company that's exactly like Red Hat. That's how the technology industry works. We're not going to see another successful Facebook, either. But we will see many more companies that push our expectations and moves the industry forward. Many of them will absolutely be based on open source software and communities.

ummonk• 8 years ago

Elastic uses a lot of closed source software to complement its open source core, which is exactly what the article said is the future of OSS.

SpanishConf2• 8 years ago

This old VC written article reminds me of Francis Fukuyama's 'end of history' thinking at the end of last century. https://en.wikipedia.org/wiki/The_End_of_History_and_the_Las....

That recently many historians have began to consider this line of thinking "wrong" because of the rise of illiberal democracies, i.e. Russia, Hungry and the success of China as a Pseudo-Capitalist Dictatorship.

toyg2• 8 years ago

The demolition of Fukuyama’s delusions can actually be pinpointed to a single day in 2001.

Maro• 8 years ago

Hungary

jenandre• 8 years ago

This article has already been proven wrong... e.g. what about Elastic

dig1• 8 years ago

Elastic isn't good example of good open-source company, like RH was. They have their main product open sourced (ElasticSearch)[1], but other products aren't [2].

From RH I always expected they will open their successful product at some point (e.g. Tower); from Elastic, I'm expecting opposite.

[1] "open source" I mean OSI approved license, not some cryptic text which can get you on court

[2] https://news.ycombinator.com/item?id=16487440

jillesvangurp• 8 years ago

Good example because their strategy is to move away from consultancy/training/support as their primary business model towards shipping add on services, cloud products, etc.

I was at Elastic.on beginning of the year where they talked a bit about their thinking. They referred to 'other' OSS companies having contradicting goals where in order to sell support/training, they make the base OSS product harder to use and more complicated so that people actually need the support and training. E.g. having great documentation directly conflicts with selling training and consultancy. They did not want to differentiate between a hard to use OSS version and a nicer commercial package. Instead they want users to pay for added value in the form of bundled stuff that is not OSS (but now mostly available for free), or cloud based SAAS products that they run for you. The core product is the same for everyone.

So, their strategy is already exactly as suggested in the article: great OSS that they actively help build complemented by SAAS business and other services where they are making a lot of money.

Looking at their acquisitions, they have been buying companies that do SAAS business on top of their core technology or support that business in some way. Elastic cloud is based on one of their early acquisitions (a company called found.no). Another more recent one is Swiftype which provides easy to integrate search as a service for small websites. Then there's Prelert which provides incident management and analytics tooling. In addition they've been investing in building out geospatial data for the purpose of supporting analytics use cases using their Kibana tool (another of their acquisitions) and now included as part of Elastic cloud. They've bought packetbeat and opsworks that both focus on infrastructure OSS that supports getting data to Elasticsearch and Kibana.

Of course they also still do support, consultancy, training, etc. as well. But that is a tougher business to scale because it involves lots of handholding. That's actually a key problem with this business: you need lots of sales to close deals and then you need lots of consultants to actually keep the customers happy. Looking at IBM and Oracle, you can clearly see that they are struggling there. IBM is looking to buy credibility for their cloud solutions through Red Hat. They've been struggling for years with consultancy as their core business and have been laying off people aggressively as revenues have been disappointing. They have at this point very little in house tech to draw in new customers.

AWS is all about selling their cloud stuff. If it's OSS and widely used, you can bet there's an AWS service from them that you can use (e.g. Elasticsearch, Hadoop, ActiveMQ, Mysql, Postgresql, Redis, etc.).

amyjess• 8 years ago

they make the base OSS product harder to use and more complicated so that people actually need the support and training. E.g. having great documentation directly conflicts with selling training and consultancy.

Interestingly enough, I've heard the same criticism about OpenLDAP, that it's deliberately hard to set up and poorly-documented because the main developer owns a consulting company and wants people to hire him to set up their OpenLDAP installations. What's ironic is that this is one of the reasons Red Hat is deprecating OpenLDAP in favor of the 389 Directory Server.

capkutay• 8 years ago

Elastic is almost the exact execution of this article. The majority of their revenue comes from paid add-ons and hosted services.

decentralised2• 8 years ago

"Sure, when you first launch a business built using open source components, (...) you might start off looking a little like Red Hat. But if all goes well, you’ll start to more resemble Facebook, GitHub, Amazon or Cumulus Networks as you layer in your own special something on top of the platform and deliver it as a service, or package it as an appliance."

I sure hope not.

The original intent of ICOs was to monetise open-source development, and now there are many great teams with huge treasure chests building great software, funding research and providing grants for anyone wanting to work on blockchain and the wider web3 ecosystem without having to go through a token offering, given the current sad state of affairs.

I know this isn't necessarily appealing for everyone, but for those interested:

https://blog.ethereum.org/2018/10/15/ethereum-foundation-gra...

https://blog.aragon.org/tag/nest/

empath75• 8 years ago

I’m pretty sure the original intent of ico’s was to figure out a way to rip off investors by issuing unregulated securities.

olivermarks2• 8 years ago

I disagree. The original intent for ICO's was (and is) honorable, as is crowd funding. We have to get out of this mindset that ICO's are inherently fraudulent. The early days of the internet were rife with scams and fraud (and it still is). That doesn't make the internet 'a way to figure out how to rip people off'.

The big banks would love everyone to think ICO's are wild west country, just as the early days of open source were laughed out of the room as crazy give aways of ip. Look were we are now with Oracle 'openworld' a few years later...

decentralised2• 8 years ago

It was really to fund research and development of open-source cryptographic protocols which are usually out of the VCs radars.

The mechanism used was itself a revolutionary development, fungible digital tokens (ERC20). There are new protocols for fundraising that are designed to give token holders more control over the disbursement of rewards to the development teams but the wider market still needs a good cleanup imho.

bwang29• 8 years ago

The problem of open source is attribution, more specifically attribution back to individual contributors and the significance of contributions, and it is especially hard if you want to do attribution based on revenue performance if the licensee is small and do not have an audit department. A large proprietary software licensee can work with a licensor to track revenue performance because the licensee already have the right infrastructure to do so. So here is a startup idea:

An external auditing company with APIs to streamline the process of rev share and attribution back to the open source community and contributors, so that open source projects will make revenue and have the resource to reinvest and improve the projects.

user5994461• 8 years ago

Receiving attributions doesn't pay the bills.

walterbell• 8 years ago

Crowdfunding sites have found ways to be compensated.

irrational• 8 years ago

I imagine most open source contributors have full time jobs. I have a full-time job that pays the bills so I don't need any kind of monetary reimbursement for my work on open-source projects. I just do it for the fun/challenge/scratch-an-itch/giving-back/etc.

gerbilly• 8 years ago

Attribution doesn't pay even for a hotdog, as seen here: http://theoatmeal.com/comics/exposure

agibsonccc5• 8 years ago

I'd argue it's actually the economics. End users both want everything for free expecting it to work perfectly as well as assurances that the project isn't going away while also somehow still wanting guarantees around release schedules. Those same people also endlessly complain to OSS maintainers about something they are getting for free and somehow expect the red carpet when it comes to feature requests.

Attribution isn't the issue, it's balancing the need for building a community vs the financial incentives to actually support the people building the thing you're using.

beatgammit• 8 years ago

no other public standalone companies

Well, SUSE isn't public, but they're mostly "standalone". And there are plenty of other companies based around a single open source platform.

Sure, they aren't $1B+ companies, but they don't need to be.

idm_guru2• 8 years ago

I'm recording a podcast, called Open Source Underdogs, focusing on open source business models. You can find it on iTunes, Google, Stitcher, etc or on the website https://opensourceunderdogs.com

IBM just made it's biggest acquisition ever on an open source company... It seems strange to use that as evidence that open source is not an effective tool--in certain circumstances--for building your business.

What about Cloudera? What about Automattic? What about MongoDB? What about MariaDB?

The podcast has 9 episodes, and we have about 20 more in the queue for 2018-2019.

Tune in... Some of the gurus of open source software share some valuable insights.

jldugger3• 8 years ago

IBM just made it's biggest acquisition ever on an open source company... It seems strange to use that as evidence that open source is not an effective tool--in certain circumstances--for building your business.

It's more about sustaining the business. Redhat's most recently reported quarterly earnings growth was negative. Did they sell now because IBM approached them with an absurdly high price? Or did Redhat executives need to shop around for a buyer, because they felt they were near a local maxima and things were starting to go downhill?

edit: that said, this is a subject I care about and will be adding your podcast shortly. Hopefully you figure out podcast sustainability as well =)

anaxag0ras• 8 years ago

Canonical is another one.

kklimonda• 8 years ago

But Canonical (and I assume SuSE as well) has quite a few proprietary bits (definitely more than RedHat), with some of their offerings being more or less "Open Core" (for examples, see comparison of MAAS free vs commercial, or how to distribute software to Ubuntu Core systems). That kinda matches what the article is saying.

davidw• 8 years ago

The problem with open source software is ultimately that of scarcity:

https://journal.dedasys.com/2007/02/03/in-thrall-to-scarcity...

AtlasBarfed• 8 years ago

AWS largely makes money off of open source, it just provides virtualization as a service along with the actual hardware. It may not be as straightforward as RedHat, but it basically is the same thing.

buboard• 8 years ago

I don't think it's the same at all. Redhat's model is to create open source software.

jonknee• 8 years ago

It's not the same thing at all. You don't pay AWS for support, you pay AWS to use its bandwidth, software and hardware.

jordigh6• 8 years ago

Why doesn't anyone try to simply sell free software?

You want me to give you a copy of the software? Pay for it. And here's a gratis sample to see what could get, but it doesn't have all of the features I wrote for it.

You want access to login to the web platform? Pay for it.

You want the source code for it, so you can modify it and/or redistribute it? Also pay for it. The GPL has explicit provisions for allowing access to the source code only if you pay, for example.

Surely some money is to be made this way. Maybe not enough to create a giant monopoly that completely dominates the market, but enough to make a living. Not everything has to be a winner-takes-all unicorn.

If we are to believe that the copying of non-free software that happens right now happens and companies are still profitable, surely explicitly allowing that copying wouldn't make it any less profitable?

TylerE2• 8 years ago

It's been tried.

From scams (https://proflightsimulator.com/ - rebranding of OSS FlightGear) to just people compiling and released the source (RHEL -> CentOS).

jordigh6• 8 years ago

But why is that a scam? Redistributing for profit is a right explicitly granted by all FOSS licenses.

This is like when people were selling Firefox CDs:

https://web.archive.org/web/20060511105535/http://business.t...

nordsieck• 8 years ago

Why doesn't anyone try to simply sell free software?

One word. Centos.

It's easy to devalue most of the engineering work put into a premium distro. Businesses might still pay for it for mission critical stuff, but that's not enough volume to run a business on.

You want the source code for it, so you can modify it and/or redistribute it? Also pay for it. The GPL has explicit provisions for allowing access to the source code only if you pay, for example.

This isn't going to work.

1. You aren't going to get much money. From the GPL (3.b):

for a charge no more than your cost of physically performing source distribution

2. Only one person has to pay for the source. Once the source is out, other people can just get a copy of the copy.

jordigh6• 8 years ago

And how is this economically different from piracy, which mostly goes unprosecuted?

Also, you've cherry-picked the GPL. It talks about "equivalent access", i.e. you can charge as much for the source as what you charged for the binary.

https://www.gnu.org/licenses/gpl-faq.html#DoesTheGPLAllowDow...

fuller005• 8 years ago

Haha you stole the words from my mouth. The fact that CentOS exists undermines all of Redhat's business model.

Honestly, the future of Open source software is probably going to be like Sqlite, in the best case scenario: 1. The core of the software is open source 2. Useful extras like unit tests and documentation from developer might only be available to paying customers. There is no other way to make money from OSS otherwise and please don't bring up consulting. It doesn't scaleup and to make money you're incentivized to keep making your software more complex, see a nearby comment on Elastic admitting that.

coldtea3• 8 years ago

Why doesn't anyone try to simply sell free software?

Because free software licenses mean anybody that buys the software and code, gets to redistribute it for free if they want to.

lotyrin• 8 years ago

You're cornered into a kickstarter-esque model of selling one big expensive copy to "everyone" -- and maybe cathedral style development where you do the same thing over and over again on some release cycle.

pjmlp3• 8 years ago

It just plain doesn't work.

Our startup tried a bit to explore this idea during the .COM wave, but it just doesn't work out as most business look at open source as a legal way of doing piracy.

I know it isn't the same, I am just oversimplifying here, given how many companies leech FOSS projects.

So the solution ends up being dual licenses, hiding the key features behind server walls, or just go commercial and forget the whole FOSS ideals.

This is specially bad in the consumer software, as this is a domain where no one is willing to pay for services, trainings or books. And the few that are willing to do so, don't do it in a sustainable volume.

jordigh6• 8 years ago

What about selling to consumers, not to businesses? Couldn't you do gamedev this way?

Given the big indie market as well as the modding community, I'm surprised it's not done more often.

ryacko• 8 years ago

Never noticed that provision in the GPL. If that was advertised more, a lot more companies would use it, although it would be counteracted by crowdfunding campaigns to distribute source code.

It’s difficult to get by, what with rising rents and prices. The only way to get around the bottleneck of needing investors would be to live a quasi-monastic life with as little as possible until a minimum viable product is developed.

mikekchar2• 8 years ago

I've posted this before, but this game is completely free software (in fact it's in the public domain!): http://onehouronelife.com/

The author does just as you say (and even charges a pretty hefty $20 per copy). Admittedly it's a multi-player game and you can't get access to the main servers without paying, but you can easily run your own server.

I think the reality is that most people are perfectly fine with paying for software if you actually ask for money. The people that won't pay, often won't pay anyway. They only real downside to this is that you can't control competition who may decide to undercut you.

For example: https://play.google.com/store/apps/details?id=com.wereviz.ev...

In this case, the undercutting group have the complete support of the original author (who is uninteresting in building a mobile version). However, there is also nothing stopping someone from competing directly in his target market except that most people are decent. Eventually it is bound to happen, though, if it were popular/lucrative enough.

I think the main thing that the success of Red Hat shows is that you can still build a business with that kind of competition. The key, though, is that your business needs to be better than your competition. If you charge more, then there needs to be some value that drives people to your business rather than your competitors (or just getting it for free). How you find that value is how you build the viable business.

I've found that most business people are uninteresting in this kind of work. They would rather be sales oriented rather than solution oriented. They have a product. Nobody else has that product. They try to make sure you want the product and since they have complete control, they can get you to pay for it. Giving up that control gives up their most powerful tool and transforms their job into something they don't actually want to do.

profalseidol8• 8 years ago

The goal however is: enough to make a living

I wonder if the author of the game will still get a decent living despite the freeloaders. Seems to me, setting up some kind of in-game cosmetic shop (and make it like Fortnite[0]) will surely get loyal fans put in the support.

[0] http://www.wisecrack.co/shows/wisecrackedition/fortnite/

But looking at the website, it looks like it's gotten popular enough to support a decent living for years to come.

MertsA2• 8 years ago

The GPL has explicit provisions for allowing access to the source code only if you pay, for example.

This is plainly untrue. The GPL allows you to charge a nominal fee for distributing the source code, so you could charge $5 for the costs of burning a CD and mailing it. It doesn't let you restrict that source code afterwards though. All it takes is a single customer paying $5 for a CD and now they can freely distribute that source code as much as they want to. The provision in the GPL is not there to allow people to profit from selling the source code, it's there to compensate for just the costs associated with sending them a copy. Those costs are never going to be anything substantial.

jordigh6• 8 years ago

Yes, if you choose to distribute by CDs (lol who does that anymore) but it also allows for "equivalent access". You're allowed to charge for downloading the source code as much as you originally charged for the binary:

https://www.gnu.org/licenses/gpl-faq.html#DoesTheGPLAllowDow...

pcpcpc• 8 years ago

If legislation required (certain/any) publicly funded projects to use open source software, whose code would be made freely and publicly available, then open source would see a much greater market share and level of investment and we'd likely see new open source business models.

TaylorAlexander6• 8 years ago

One thing we could do, if we wanted, is to build a society focused on automating away jobs. Such a society would not rely on people to work for its function, but on the labor of machines.

In such a place, people would be free to work as hard as they want for additional gain. They could also, however, take as much time off as they desired to go to school, learn on their own, spend more time with loved ones, or just relax and explore life in their own way.

In such a society, I think many people would be motivated to give their labor to open source projects. I think the machines that run such a society would necessarily be open source, and many people could give back to society by contributing to the design and improvement of the machines that provide for us all.

What do you all think of this? Would you want to live in a place like that?

toomuchtodo2• 8 years ago

What do you all think of this? Would you want to live in a place like that?

Yes, but you're going to need to have the political capital to ratchet down the work week and split productivity gains with labor and capital. That does not exist yet, and without it, the advances you speak of will be used to funnel more wealth to the top.

Disclaimer: I am active on the political side, and will be running for office in the next federal Congressional election cycle. Drop me a line if you want to chat on how we can work together to obviate the need to work down the road; that's the future I want for everyone.

jxub• 8 years ago

Disclaimer: I am active on the political side, and will be running for office in the next election cycle.

You should make an announcement or something for us in HN (when the time comes)! I'm sure there would be quite a lot of people here to support your candidature.

profalseidol8• 8 years ago

Don't we already have a world where machines are the ones producing our needs? There's that Discovery Channel series called "How it's Made" where you see it's practically all robots. Do you agree?

and without it, the advances you speak of will be used to funnel more wealth to the top.

All the technologies for mass production so far has indeed funneled to the top huh? And this I believe has also slowed down advancement in technology (unless it's something that is very profitable).

split productivity gains with labor and capital

You'll be called Socialist. Giving what the laborers deserve is Socialism. "Share the means of production!"

However, the fact that Bernie had a following is a good indicator. There's also Corbin whom is pushing for a 'right to own' policy.

thanksDr• 8 years ago

This is exactly the kind of utopia so many of us today are trying to build.

There are many points of entry: Using FLOSS for governments, for schools, releasing all government funded code, etc.

TaylorAlexander6• 8 years ago

Absolutely! I’d like to go farther, and imagine how we could reinvent society if we had high quality open source automation hardware in addition to open source software. Open source software has paved the way and now I’m excited to see what open source robotics combined with the right attitudes can do.

fredley• 8 years ago

Human beings, at least some of them, crave power. How would one such human behave in a system such as this? How would a group? Could a system be designed to be relient against this threat, at scale?

While it's nice to think of a FLOSS utopia, unfortunately human behaviour will never allow it to happen.

oscargrouch• 8 years ago

I used to be pessimistic about it too. I think it will happen in a proper way in some places, in others it will be used as a tool to amass more power, as the human nature implies it will.

But the silver lining is that we are creating a collective conciousness through tools like the internet. Humans can naturally create this collective sentient being when forming a tribe for instance. Our problem, in our particular point of history of civilization, was always the problem of scale.

Now with the internet we are again able to form this collective mind in a bigger scale. We are still in the infancy of this process, and thats why this collective is acting as a dumb giant. But I think that as we evolve in this process, this collective mind will get more sophisticated. And soon we will be able to collectivelly control whats best for the greater good, trying to repel all hostile movements that could try to control the resources to the benefit of a few.

The problem is: it will take a lot of fight to get there, some of us will fall, but i believe that some of us will get there first.

muxator• 8 years ago

I only can think of simple, basic ways: promote different values and make socially unacceptable to be the one who carves for subsuming the others.

antocv• 8 years ago

We make the robots do the resilience for us.

Whenever some human has amassed more power over others, and a group feels ill, the robots solve the problem.

All such a robot would have to do is apply current laws, facebook is too big, google is too powerful, banks are bankrypt, robot just swings the hammer the elected politicians failed to do.

profalseidol8• 8 years ago

Could a system be designed to be relient against this threat, at scale?

It's a problem that ethereum.org is working on. They have an mvp, but not yet ready to scale.

But one can argue that the internet has enabled some of that utopia. And the printing press from the point of view of those who weren't allowed to read. Yes the Church didn't want people to learn how to read, but humans have prevailed. Hopefully we can solve current problems before the Doomsday clock reaches midnight.

jdi92mxx• 8 years ago

A lot of jobs just act as distractions to create jobs

A better target than automoting away cashier jobs at pointless retailers would be to target universal access to healthcare and social services as the key economic drivers

Then folks aren’t tethered to dumb jobs and can make jewelry or chairs and such for personal needs when they’re on vacation from their job that supports the health economy

Creating is an important human outlet. Don’t think it’ll do to automate it away. But we can open it up to anyone learning to create whatever so long as they don’t need to be tethered to a dumb job

drb912• 8 years ago

This seems like the natural conclusion of a welfare state, not a capitalist society.

mulmen• 8 years ago

Capitalists are not workers. You can create this utopian society by distributing capital in a way that all individuals have their basic needs provided. At that point everyone is a capitalist and is free to pursue whatever interests they desire.

Note that all economic systems are concerned with distribution of resources so the idea of distributing capital is not unique to a "welfare state".

hinkley6• 8 years ago

I sometimes feel like if we could just make volunteer labor tax deductible, we could get part way to this place.

For some projects a couple hours of my time might be more valuable to everybody than the twenty bucks I’m willing to donate. And ten hours a week would increase your take home pay by about 6%, versus working 50-60 a week for your employer for a slightly bigger raise.

macspoofing10• 8 years ago

That society will not exist. People derive meaning from work. Ambition also drives personal development. You take those away and all a person has left is self-medication with drugs and booze and suicide. We need the struggle.

ghostbrainalpha2• 8 years ago

The comment above said that you work for "additional gain".

The parent comment didn't want to get rid of work. Just focus open source work improving robots that did the jobs we used to.

All of human desires for competition and struggle would still be catered to.

TaylorAlexander6• 8 years ago

People tell me this all the time - work is vital to human happiness so we’d better keep buying in to a system that holds the threat of disaster and starvation over our heads if we don’t work.

I have full faith that if work is this valuable, we’ll do it voluntarily. I cannot believe the fantasy that we have to be forced to work or we’ll be miserable. Humans are way too intelligent to just sit there getting more and more miserable because they don’t have to work. Yes, people coming from a capitalist society usually don’t know what to do when their work goes away. But people in a society where no one needs to work will find things to do. Maybe they’ll repair motorcycles as a way of finding Zen.

There is a lot of work we can do that is not focused on economic productivity. In a world where people don’t have to work to survive, they choose what they do. Some will waste away, just as some do now. Most will not.

JoeAltmaier4• 8 years ago

Go on believing this fallacy, but please don't work to enslave the rest of us in service to this obsolete idea

profalseidol8• 8 years ago

Nah, we'll have more interesting Github projects if we stop writing the same software over and over again.

People will do creative things.

Ambition will exist even if the useless work we do today (getting clients richer with more software).

Related - Interview of Noam Chomsky regarding Work:

https://www.youtube.com/watch?v=bcBLCBxq1k8

dfischer2• 8 years ago

I mostly agree with this and I’d add: work does not have to be a “job”. Work can be your family, it can be art, and it can also be exploring the universe. I think Star Trek captures this idea very well.

pweissbrod• 8 years ago

Ever watch 'the jetsons'?

Generation or so back in the USA that was the the general over-the-rainbow vision of where technology would take us.

The robots would do the work while people would afford more time to spend on leisure/artistic oriented lifestyles.

TaylorAlexander6• 8 years ago

I grew up watching the Jetsons! Now I want to make it a reality.

3pt141592• 8 years ago

We could have that today. All our money is getting dumped into arms races. If we:

1. Put a 1000% tax on advertising spending.

2. Taxed property at a much higher rate, but gave each person a basic income.

3. Set a ceiling for the ratio of funds that education institutes can spend on non-professor things. (At least here in Canada they waste most of the money on things that don't actually teach skills, they just look impressive or market the university in some other way.)

4. Set caps on how much individual patents or works of art could earn before they lost financial protected status.

5. Set corporate taxes as a function of in-country sales and total affiliated market cap.

6. Punished corporate region shopping for tax havens and other advantages with trade agreements.

7. Made public healthcare optimize on happy person-years saved and with emphasis on prevention.

8. Make more areas that are 7 storeys tall so people can walk or bike to get their daily things.

9. Set high taxes on cars and invested in high speed city-to-city trains.

Then we'd have houses that were safe, but affordable. Cities that had some quiet areas, but were dense enough to be viable for everyone. Great education via well-paid professors and TAs. Reasonable returns in investments in technology and art, without Walt Disney and other soulless corporations milking the same characters year after year. Products that competed mostly on quality instead of advertising.

Instead we have almost the opposite. Nobody can afford anything because property gets sucked up into mortgage fuelled bubbles and in classes of 100 people where each person is paying $40k per year after subsidies we have professors and TAs struggling to get grants to fund their research.

Why? A single course for a four month term is $350–$500k worth of product. Where did all the money go?

Same place all the money always goes: Competition for the best students to get the best reputation to get the best students to get the best...

m3mpp• 8 years ago

Looks like 1917 russian revolution to me... no, thank you.

int_19h2• 8 years ago

There were two revolutions in Russia in 1917.

If you mean the communist one, then their program was rather different, and included things such as "dictatorship of the proletariat".

erikpukinskis• 8 years ago

“Automating away jobs” is like “harvesting away corn”.

Sure you can delete someone’s job. But you just leave a job-shaped hole in the person that then goes and finds a new purpose. It only seems like a disappearance for the season, and then you find something new growing there.

The idea that we are anywhere near “doing all the work” is batshit. We are presently doing maybe 1% of the work that needs doing. You could automate the entire economy 50 times and still have 50 more careers waiting for the globe’s population.

Bioremediation in he wake of climate change alone could occupy an entire generation of earth humans. Mental health another. Building permaculture cities will be the work of an entire generation. None of those things will be amenable to robot labor.

chii• 8 years ago

Bioremediation ...

but who is going to want to pay for such things? The whole reason "jobs" exists is that it's a task somebody wanted done, and is willing to pay some resources for it.

TaylorAlexander6• 8 years ago

I don’t think we’re close to doing all the work, and I don’t want to automate all work. I want to automate away jobs. Those things society relies on from everyone to function.

The point is that a society that requires everyone to work all the time sucks for a lot of people - particularly those at the bottom. We can and I believe should build a world where working a job is optional. I fully expect people would still work a lot, but it would be optional in the sense that their basic needs (food, shelter, clothing, access to computers and internet) would be provided to them by society.

It is certainly possible to build this. And many people want it. The key, I think, is to build the system based on voluntary interaction. Find people who are willing to help support others and then have those people collectively drive the cost of that support down through engineering.

I’m not trying to eliminate work. You can never eliminate work. I want to eliminate jobs.

zby4• 8 years ago

To update the terminology - the RedHat model is freemium - you give away something to market the part that you sell.

The problem with freemium is always how much you give away and how much you charge for. One idea that I have not yet seen is to do the split in the time dimention - sell licenses that convert into a Free Software or Open Source license after a year or two.

bonzini6• 8 years ago

Right, however the main difference is that the premium part is not software. There is no such thing as open core in Red Hat's offerings.

zby4• 8 years ago

I don't know - have you looked at: https://www.redhat.com/en/store/linux-platforms

yuhong• 8 years ago

I dislike the current debt-based economy in general myself.

bubblethink• 8 years ago

I feel that there is an inherent conflict of interest in the OSS support sales model. Hypothetically, if your software were really simple and robust (think standard unix utilities), nobody would pay for support. On the other end, if you have to deploy openstack, kubernetes, or any other stack with a lot of moving parts, you need support and personnel. So in a perverse way, it's in your interest to make complicated shit. In reality, it is perhaps not quite as bad, but I definitely feel that with a lot of projects for which RH is the sole upstream, the quality or elegance isn't quite there when compared to more traditional linux or unixy things which have more diverse upstreams. This manifests in systemd, freeipa, glusterfs etc. too. These are generally hard problems though. So it's not quite black and white.

fungiblecog• 8 years ago

I find this attitude really tiring. I'm a contractor and I work with people all the time who feel like they must avoid improving anything because if they do they'll be out of a job. It's nonsense. It's the same as the luddites that think robots will tale all the jobs. There will always be something new (and more fun to do) than maintaining broken systems and processes.

hinkley6• 8 years ago

I have been in a couple slightly dicey situations but overall have found that there are always other things I’d like to have time to do if I didn’t spend so much energy babysitting a shitty tool or process.

You find out frequently that people who use the tool have ten things they never asked for because the tools don’t even handle basic common sense concerns. It feels like asking for a pony, possibly from a neglectful parent.

You fix a few things and get labeled as clever or useful. People come to you with more stuff and it expands your grasp of the organization. For me this strategy has opened up leadership opportunities.

You can still be laid off but everybody else will wonder who was the idiot who got rid of the person who was keeping the ship afloat.

shados• 8 years ago

there will always be something to do because once software A is so easy to use anyone can do it, you can jump to support software B that isn't there yet.

But if you poured resources in A with the hope of making supporting A your bread and butter, and A is so easy to use no one needs help, well, you kind of wasted your time and money, UNLESS you managed to make it so popular that the 5% of people who still need help anyway are enough to keep you afloat. That's hard though.

hinkley6• 8 years ago

One of the ways I poke fun at the Apache foundation is to point out that their online documentation is vague and uninspiring, and then poof the lead maintainers write an Oreilly book that explains all the whys and hows and whats.

nemo44x2• 8 years ago

Documentation doesn't exist to explain concepts and give tutorials so much as document functionality and possibly show examples of use.

aaronblohowiak• 8 years ago

Books are incredibly cheap, you pay for the editor &c more than for the author for most tech books.

klipt• 8 years ago

Kind of like professors writing difficult to reproduce papers, then explaining everything in the textbook (which they also assign to their students...)

agibsonccc5• 8 years ago

Oreilly author and project lead for an open source eclipse foundation (apache style project though!) project that runs a company. Happy to answer questions here about the how/what/why this happens.

hinkley6• 8 years ago

I kind of feel like we need a PBS of software. We have a few things that partly fill in that gap (Apache, Mozilla) but leave a lot to be desired.

roenxi• 8 years ago

But that exact conflict of interest exists in closed source support models too. It exists for any company that wants to sell a support service. And it relies on the supporters being small-minded enough that they'd rather have a 1% market in 100 people than a 0.01% market of 1,000,000.

The incentive you identify only goes away if the software is a product with no support - and then businesses won't buy it, because there is no support.

wmf• 8 years ago

This isn't necessarily true in the enterprise. At our company we buy support for everything we use, whether we need the support or not. It's more like insurance, which also helps to break out of the O(N) scaling that people think goes along with the support business model.

slivym• 8 years ago

Yeah I really think this is the most important point. In an enterprise environment it's almost more important to be able to point at who is responsible for supporting a product as it is for the product to actually work. The due diligence of any purchasing decision will always involve 'and what if it goes wrong'- especially since most enterprise companies will involve legal when getting approval for the use of OSS.

blablabla123• 8 years ago

Hypothetically, if your software were really simple and robust (think standard unix utilities), nobody would pay for support.

Yeah but reality shows that standard unix utilities are not used by the majority of people. So many people use unix based systems, especially macOS which has much more simple/bare-bones tools than GNU/Linux and still few people do read man pages for instance

WalterBright2• 8 years ago

Making complex buggy software is the default. It is really, really hard to write simple, robust software.

trhway• 8 years ago

wrong angle. Would you prefer to be an unknown/invisible/unappreciated manager of a small team writing simple robust software or to be a highly visible and valuable (S)VP of an organization developing a buggy complex equivalent of that simple robust software? I've observed the same answer to that modern Hamlet's question everywhere around me through all these years at the BigCo-s :)

matty_makes• 8 years ago

Large companies sometimes don't actually 'do' any of their own IT work. There are layers of SLA's across data centers and applications, spread across multiple vendors, contractors, etc.

Everything must have a legal contract that specifies support terms, penalties, etc. Large company's motives are risk avoidance to ensure profits for shareholders.

Basically companies will pay a premium to have someone they can call and yell at if something goes sideways. Usually corporate finance departments have no logistical way to accept a reimbursement from a vendor for missing a SLA but they like to put clauses like that in a contract.

The other part is the professional services arm tied to the sales process. RH can provide experts that only they can provide - they are the ones writing the code sometimes. Other companies like Oracle have professional services but I doubt they are committers on the products being sold.

setr• 8 years ago

When you assume inherent complexity exists, and competition exists, it works out fine. The consumers will always require some support for any complex OSS, but they want to minimize it (by finding OSS with reduced accidental complexity). OSS are incentivized to increase accidental complexity, but they’re capped by reputation and competition.

Of course, you can work around the core incentives (eg by marketing), and a lack of competition changes everything (consumers take whatever they can get, producers sell as high as they possibly can without bankrupting the consumer), but in a well-behaving market it should be fine.

Your RH-upstreams examples can probably be sufficiently explained by lack of competition, due to a captured market. Which isn’t behavior specific to OSS, but to every market. Notably, breaking RH’s stranglehold would be naturally easier than say apple’s

xorcist2• 8 years ago

nobody would pay for support

That is really, really not the case. You don't pay for someone holding your hand. You pay for support because you either simply have the resources to do so or your business requires you to pay for the things you use.

If you need help setting up Kubernetes, glusterfs or something else you get help from a third party contractor. That's what we do.

You pay for support because your want someone to keep sending out security patches even if upstream should roll over, and you pay for Red Hat specifically because you want to have an upgrade schedule your business can adhere to (as opposed to when upstream feels like it).

Put another way, you pay for the privilege of having someone to sue.

AzMoo_2• 8 years ago

You also pay for support so that when your senior engineers all pack up and start their own business together you can ring somebody to keep your infrastructure running while you find more people with the right level of knowledge.

TuringNYC• 8 years ago

> you pay for support because you either simply have the resources to do so or your business requires you to pay for the things you use.

A nuance: many big businesses require that you pay for software you use, and part of what you are paying for is an indemnification via the vendor, which makes sense to purchase for big businesses with deep pockets https://www.scl.org/articles/3030-indemnity-and-limitation-o...

vmh1928• 8 years ago

Companies also pay for support because after a few years the version of the open source product has moved on and nobody realizes the true cost of ownership does not end with the acquisition cost the company doesn't have the budget to upgrade. Thus they're 5 levels back and nobody in the Open Source community is interested in fixing old software. As an example, RedHat offers up to 9 years of support for Openshift. That's why companies pay for support.

https://www.ibm.com/support/knowledgecenter/en/SSC623_11.7.0...

edit: clarified acronym

greedo• 8 years ago

I work for a large insurance company that has a large RHEL deployment. We don't buy support really, it's just licenses to use with support attached. We'd use Centos in a heartbeat but Oracle and IBM won't support Centos. Our managers know the value for the support isn't really worth it, but it's about two factors: having someone on the other line to yell at when things go pear shaped, and also having teflon armor in case another manager uses an incident as ammunition in a fight for prestige.

agibsonccc5• 8 years ago

Disclaimer: Your concern is exactly what pays my salary. Take what I say with a grain of salt.

I typically see this attitude at the developer level, but the line of business never sees it like that. Devs don't have incentive to care about these things. They also just want to deal with the vendor.

What you sell is more "insurance" and a guaranteed timeline on bug fixes/releases.

As someone who supports OSS, why should you be able to demand I ship something on a certain schedule if you're not paying me? If it's a business transaction, then there's a contract and aligned incentives on both sides.

Taking this a step further, this is usually not enough which is why we then see open core business models like elastic search, gitlab, (and also my company skymind) selling a combination of support + licensing.

orblivion• 8 years ago

I think of it the other way. "I get paid X amount a month to guarantee support. How do I reduce my support costs? Oh I know, I'll make my product easier to use." Kind of like insurance companies who spend effort to figure out a way to make your activities safer.

Of course if they made it perfectly easy they would be out of a job since the software is free. But so long as it's within a certain margin it works out.

zby4• 8 years ago

As the article explains the real problem with that model is that selling software is scalable - but support is not. So a support business will never have the same margins as a software selling business - and will not be able to invest in the software the same money.

JPKab• 8 years ago

See Apache Spark.

It is powerful, but was never made remotely easy to set up or administer. They finished it and called it Databricks.

fuller005• 8 years ago

I've been thinking about this for some time and I agree with the gist of the article.

Most OSS that comes out:

1. Either funded by giant megacorps because they're trying to commoditize their competitor's edge: See kubernetes, LLVM etc.

2. Common frameworks that people sell consulting around. This is tricky because if your software is easy enough for consumers to use, they won't have use for your consulting. This leads to this bad incentive of complicating software where not necessary. See: Pivotal selling consulting around Spring and Redhat etc.

3. Anything that doesn't fit in #1 or #2 above is mostly not possible with OSS. To think about it, we can just examine the most consumer facing software that we use. Where is a OSS developed messenger app that is as popular as Facebook or Hangouts? 20 years back, we had OSS for most consumer facing software, Unix coreutils etc. Basically, today OSS is reduced to professional frameworks and middleware libraries because that is beneficial to megacorps and they fund this kind of software, but OSS by indie developers is pretty much dead.

octorian• 8 years ago

but OSS by indie developers is pretty much dead

I have never seen a viable "business model" around F/OSS end-user application software. Every time I ask the F/OSS fanboys for this, they either come up short or ramble about "selling support."

The closest I've even considered was the OpenBSD model, where you keep everything free and open, but sell the "official distribution." The modern app store ecosystem actually improves the viability of this. However, that approach probably has a lot of limitations.

That being said, I prefer to open-source anything I do that I don't intend to make money off of. I personally despise the "closed-source free-as-in-beer" model that some indie non-Linux developers seem to opt for.

fuller005• 8 years ago

One of the most intriguing models to fund OSS that I've seen lately is ICOs. The only downside to it being that it fits a narrow band of software which can have a marketplace. So if you're developing the next coreutils "ls", I doubt you could fund it with an ICO.

Another model is that of sqlite, where the core code is open but unit tests aren't available. In effect, this is somewhat similar to selling consulting but with fewer chances of you having to complicate your software.

At the end of the day, what's important is that the base computing be available in an OSS fashion. Base Computing = Decent OS with GUI + An App store. I think that's the direction Canonical should be going in and attempt to make money by hosting an App store for Ubuntu, just like Google makes money off PlayStore.

mperham2• 8 years ago

If you don't think about how you will sustain an open source project, your project will not be sustainable. "Those who fail to plan, plan to fail."

Building a business model on top of my open source Sidekiq[0] project was the best decision I've ever made. That doesn't mean my approach will work for all (or even many) projects but anyone who is trying to build a popular project needs to consider: if I succeed, what will the project look like five years from now? Will you or a core team still be helping users every day?

[0] https://sidekiq.org

christophilus• 8 years ago

Thank you for sidekiq. It is the one sane piece of the tech stack I’m working with.

profalseidol8• 8 years ago

+1 for using LGPL.

However, seems like there's lots of features that is proprietary (or at least non-free licensed).

mperham2• 8 years ago

Yep, and there's an easy value proposition here:

Almost all of those features are available as OSS plugins. Do you want to gather 5-10 complex plugins, integrate them all, debug them and support them for years to come? Or pay for a turn-key solution that takes literally one minute to buy and get running?

If a business can afford a laptop, it can afford my Enterprise product.

fuller005• 8 years ago

One model that might work is the Unreal Engine model, so an OSS license that is free for personal use, but for commercial use, it might require 3% (say) of your profit from sales of the software product.

mrob• 8 years ago

but for commercial use, it might require 3% (say) of your profit from sales of the software product.

That's not OSS.

fuller005• 8 years ago

I think the discussion is centered around preserving the component of Open source which includes funding for the software but retains availability of the source. In such a case, it may not be possible to retain the full pure classic OSS definition.

It might be best to just use Unreal Engine like license where the source is available for inspection and personal use but still being charged for commercial use.

dep_b• 8 years ago

Strange. Most hills look small compared to the Mount Everest and the Aconcagua. That doesn't mean they're actually easy to climb.

Why is RedHat compared to the biggest companies on the planet?

PaulHoule• 8 years ago

I am not sure why the service business is any better.

Sure you can cash the checks you get from your customers and write out a check for AWS. Or you can run a data center the old way or some new way. So can anybody else.

There is just no moat. Running the service you can pocket the money you make learning how to run it more efficiently. You share some attributes with Salesforce.com but you don't have the patent portfolio and other proprietary IP that makes Salesforce a great product for what it is.

mathattack• 8 years ago

I won’t miss them. They’ve been a very difficult vendor to work with. At least once they go to IBM it’s easier to justify sunsetting them.

Annatar2• 8 years ago

In all my decades of working with computers, redhat was by far the worst company with the most incompetent staff that I've encountered. redhat's "engineers" preferred to spend time arguing with their customers rather then solving their problems and severely struggling to understand where in the code the issues are.

Where they particularly struggled were higher order architectural abstractions and their consequences and system engineering for backwards compatibility.

Their bugzilla.redhat.com is chalk full if examples of struggling to understand and debug the code and arguing with customers.

I sure as hell hope there will never be another computer company like redhat.

Annatar2• 8 years ago

"We had made the product so easy to use and so important, that we had out-engineered ourselves."

Yeah, so "easy" that we had to debug and extend microdhcp code to properly support PXE booting and add option 150 because you guys offered nothing with which to properly boot XEN VM's; XEN was so woefully unfinished that we had to finish it for you and now you're telling us how complete of a product it is and patting yourself on the back.

"Details-schmetails", it's "the big picture" that's important, which is that someone cashed out, am I right?

This is one of the reasons why my passion and love for computers turned to bitter disappointment: the lies and really bad, half-cooked software. Damn it all, Keith Wesolowski was so right[1].

[1] http://dtrace.org/blogs/wesolows/2014/12/29/fin/

z3t4• 8 years ago

What is a better business model then taking something that is virtually free and selling it at a premium !?

roman_g• 8 years ago

I thought free software was about freedom, not how to monetize it. You can never trust a service - only your own hardware (it's not quite possible with modern mass-market CPU though, only on IBM Power or some dummy MCU or even FPGA-based RISC/MIPS/whatever ) with free software on it. When did Linux become about cloud and containers, not about desktop?

Why There Will Never Be Another RedHat: The Economics of Open Source (2014)

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