Open-source business model generates heat..

I have been seeing a lot of analysis on opensource business model off late. Blame it on Oracle vs MySQL vs EU controversy. I thought it would be good to note all these discussions going on. Here are the links:

Open source remains elusive

Gigaom discusses and amends the above article

I haven’t read these two links yet, but I was thinking aloud yesterday on this topic. For what ever its worth, here it is:

1. the comparison of market share Vs revenue numbers is not correct in case of open source. For eg. some people say MySQL’s market share, with 60000 downloads each day, was about 40% in terms of installations but in dollar terms it was just 0.2%. And hence they deduce that open source as a biz model is doomed. I just think that a better comparison, like with most things in life, is:

Efficacy of business model = Value derived (Enterprise value) / Money invested

And on this count, MySQL will score at par to the big boys – Oracle and MS.

Efifcacy = $1000 million / $ 100 or $200 miilion
= 10 or 5 times.

which is as good as most successful high tech startups, financially. The reputation and good will you get, is totally matchless.

2. Open source will undergo a lot changes which will see its revenues/installations ratio improve.

3. Calling open source a bloated, impractical industry just because the ROI is less, misses an important point. The founder(s) of an open source company never wanted to earn insane amount of money. They generally go open source as they choose good will over money and and want to see the world as a better place. So why judge them on a purely ROI basis?

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