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Stanford Teaching MBAs How To Fight Open Source

timothy posted more than 5 years ago | from the then-they-fight-you dept.

Businesses 430

mjasay writes "As if the proprietary software world needed any help, two business professors from Harvard and Stanford have combined to publish 'Divide and Conquer: Competing with Free Technology Under Network Effects,' a research paper dedicated to helping business executives fight the onslaught of open source software. The professors advise 'the commercial vendor ... to bring its product to market first, to judiciously improve its product features, to keep its product "closed" so the open source product cannot tap into the network already built by the commercial product, and to segment the market so it can take advantage of a divide-and-conquer strategy.' The professors also suggest that 'embrace and extend' is a great model for when the open source product gets to market first. Glad to see that $48,921 that Stanford MBAs pay being put to good use. Having said that, such research is perhaps a great, market-driven indication that open source is having a serious effect on proprietary technology vendors."

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Reminds me of Microsoft (4, Insightful)

springbox (853816) | more than 5 years ago | (#25112545)

to bring its product to market first, to judiciously improve its product features, to keep its product "closed" so the open source product cannot tap into the network already built by the commercial product

Reminds me of Microsoft's strategy. Except for the "judicious improvement," and it doesn't seem like it will work for them in the long term anyway.

Re:Reminds me of Microsoft (5, Insightful)

Fluffeh (1273756) | more than 5 years ago | (#25113135)

What makes me laugh is that there is such an "Us Vs Them" tone in all of it. It's like the nice business people think that all the open source guys are just waiting to kill their babies! I mean settle down.

Make money and make a reputation through making and marketing GOOD STABLE WORKING software. Don't try to do it by making a big bag of shit and blocking anyone trying to compete.

Oh, hang on, yes, now I see the potential problem for the business types...

Re:Reminds me of Microsoft (2, Funny)

wellingj (1030460) | more than 5 years ago | (#25113195)

Not the real business types, just the non-engineer business types who can't provide value any other way.

confusion (5, Insightful)

QuantumG (50515) | more than 5 years ago | (#25112547)

The professors advise 'the commercial vendor

So many obviously smart people confuse proprietary with commercial. The two are orthogonal. Back in the 90s this might have been academic, but there are now many commercial open source companies. Get with the program.

Re:confusion (2, Insightful)

postbigbang (761081) | more than 5 years ago | (#25112827)

There's hope for a balance. I see more *buntu and Macs used by CS students. In the great scheme of things, MBAs will learn that there are multiple possible models for success in development organizations.

Proprietary software makes money. Don't confuse making money with success, however. Like other methods of making money, proprietary software is transient in nature, just as open software is.

Re:confusion (4, Insightful)

jellomizer (103300) | more than 5 years ago | (#25113087)

Umm. My MBA Program talks rather fondly of Open Source Software, for the most part. They just make you analysis the benefits in a business perspective, and try to decide when an Open Source product is worth it, or getting a closed source app may be a better overall value. About 1/3 of the MBA class are Computer Science or Engineering Majors for their Undergrad and know about Linux and open source and use them. There are also differernt classes of MBA as well.
While the degree is the same.
You have Ivy League Full Time MBA. These tend to make the biggest Jerks of bosses. These Kids think they are special and entitled and tend to treat people under them like dirt while they bring the company to the ground.
Next it is the Ivy League Part TIme MBA. These guys often have real business experience and know what it feels to be the little guy. But being from such a well known school they still often get high end jobs much quicker then their experience shows and still kill the company.
Full Time normal college MBA. Yea they are Jerks too. However companies wont put them in top positions to kill the company, until the get the real experience.
Finnaly the Part Time Normal College MBA. These guys are not in it to be the CEO just a manager. Tend to be less of jerks and start as low managers and work they way up. Tend to be the guys you can deal with.

Re:confusion (1)

postbigbang (761081) | more than 5 years ago | (#25113197)

Multi-disciplinary MBAs have at least a leg-up on those with a monolithic program. General practitioners don't make good surgeons, and vice-versa.

My experience with many MBAs is that they believe most elements of businesses run strictly on money/compensation. It's a narrow view bereft of satisfaction, quality of life issues, and ancillary perspectives. Still, your generalizations seem apt.

Re:confusion (5, Informative)

morgan_greywolf (835522) | more than 5 years ago | (#25112861)

Not only that, but these are companies you have actually heard of. Sun Microsystems, IBM, and Google are all companies that produce open source software and actually make money from it. Not to mention pure open source companies like Zope and Zend.

Re:confusion (2, Insightful)

RiffRafff (234408) | more than 5 years ago | (#25113057)

The author also doesn't understand (or refuses to acknowledge) the different definitions of "free," and as such, misses some of the major points of why more and more people are using FOSS.

Good! (4, Insightful)

MarkvW (1037596) | more than 5 years ago | (#25112551)

Knowing the enemy's potential avenues of attack is a wonderful asset. It makes counter-attacking and defending much easier.

Re:Good! (-1, Flamebait)

Doorjam (770005) | more than 5 years ago | (#25112777)

God forbid someone should try to make a living out of writing software.

Re:Good! (0)

Anonymous Coward | more than 5 years ago | (#25112831)

Nice strawman.

Re:Good! (5, Insightful)

Darkness404 (1287218) | more than 5 years ago | (#25112855)

Ok, tell me, in general in a company (not even a software company) why are most programs written? A) To make a million in sales B) To fix a need that the company has so it can run better. The answer is B. Most software developed by companies is in-house software. Meaning, that even if all software was open source tomorrow, those people would still have jobs developing software.

Re:Good! (1)

Spy der Mann (805235) | more than 5 years ago | (#25112893)

God forbid someone should try to make a living out of selling overpriced software.

There, fixed that for you.

Re:Good! (0)

gnupun (752725) | more than 5 years ago | (#25113055)

God forbid someone should try to make a living out of selling overpriced software.

Very little software is overpriced. It's usually the highly technical and/or low-volume software that costs hundreds or thousands of $. But I bet you won't hear from the hordes of poor shareware writers OSS has wiped out from existence. Don't software authors have a right to get paid... just like any other profession?

Re:Good! (4, Interesting)

deraj123 (1225722) | more than 5 years ago | (#25113199)

Don't software authors have a right to get paid... just like any other profession?

Yep, they sure do. I am one. And I get paid. And I only write open source software.

I provide a service, and that is to make their systems work the way they want them to. Most code is either too specific to the business to provide a competitive edge to somebody else, or its so generic that exposing it to the world can only help improve it.

Re:Good! (2, Insightful)

lysergic.acid (845423) | more than 5 years ago | (#25113125)

because open source companies don't want to make money? if so somebody better tell MySQL AB and Trolltech. they're doing a horrible job of it.

Re:Good! (0)

Anonymous Coward | more than 5 years ago | (#25112863)

Yeah exactly, so keep the source a free flowing so we can know you better.

I'm way for open source but i've never understood why programmers are so dead set on another programmer actually making money off their work, Much less referrer to them as an "enemy".

I'm sure most of us profit off of private software development in one way or another.

Re:Good! (0)

Anonymous Coward | more than 5 years ago | (#25113169)

A free flowing what? Geez, go back to your Ubuntu, I think there's a driver issue calling you.

Read the paper here (4, Informative)

derek_farn (689539) | more than 5 years ago | (#25112887)

The paper is freely available [poms.org] for everybody to learn from, in fact the Jan-Feb 2008 issue [poms.org] is fully of very interesting article (what month are we in now?).

Re:Read the paper here (2, Informative)

Kjella (173770) | more than 5 years ago | (#25113097)

Uh, did you try reading what you linked to? It's the appendixes / supplements to the journal articles, and are utterly useless.

Re:Good! (0)

Anonymous Coward | more than 5 years ago | (#25113207)

Unfortunately the open source crowd has not taken the note and improving product features is not at top of the list

features = bloat, so the end user loses out while the power user sits fine. That is slowly changing as hopefully they take note to take more care of the largest market of desktop users.

sissy (-1, Troll)

Anonymous Coward | more than 5 years ago | (#25112555)

people write papers on how to build nuclear bombs and nobody complains. open source advocates are little girls.

Re:sissy (1)

Ash-Fox (726320) | more than 5 years ago | (#25112585)

people write papers on how to build nuclear bombs and nobody complains. open source advocates are little girls.

There have been recent papers by Stanford on how to effectively use nuclear bombs against civilians? Where?

Re:sissy (3, Funny)

Cassius Corodes (1084513) | more than 5 years ago | (#25112641)

There was a paper in nature recently titled "Improve your jihad: nuclear weapons" as part of their weekly jihad improvement segment.

Re:sissy (1)

Ash-Fox (726320) | more than 5 years ago | (#25112817)

There was a paper in nature recently titled "Improve your jihad: nuclear weapons" as part of their weekly jihad improvement segment.

Google says [google.co.uk] : No results found for "Improve your jihad: nuclear weapons".

Re:sissy (3, Funny)

Spy der Mann (805235) | more than 5 years ago | (#25112903)

There was a paper in nature recently titled "Improve your jihad: nuclear weapons" as part of their weekly jihad improvement segment.

Google says [google.co.uk] : No results found for "Improve your jihad: nuclear weapons".

GASP! They nuked the article! CENSORSHIP!

Re:sissy (1)

juiceboxfan (990017) | more than 5 years ago | (#25112807)

...how to effectively use nuclear bombs against civilians?

That's easy; light fuse, get away [atomicfireworks.com] ;-)

Jest not! (4, Funny)

Ash-Fox (726320) | more than 5 years ago | (#25112557)

What happened to all open source software is crap arguments?

Surely companies likes Microsoft were not jesting!

Don't they realize that... (1, Insightful)

isBandGeek() (1369017) | more than 5 years ago | (#25112559)

... to a certain extent, anything that's not free (free as in beer) and has utility will become free to certain users?

Enlightenment [wikipedia.org]

Of course, then the commercial vendors will turn to DRM. Then the freely obtained product will become superior to the one obtained by buying it from the vendor. With the vendors focused on the loss of sales, FOSS will continue to innovate.

Good luck, even with that "embrace, extend, extinguish" in effect.

Re:Don't they realize that... (1)

SlashWombat (1227578) | more than 5 years ago | (#25113167)

It's not really "loss of sales" as much as "How many more we could sell if only we had no competition!"

The fact is, they are all dreamers, generally writing bug laden, bloated, slow and inefficient monoliths.

If these researchers looked carefully, they might discover Stanford was well known for its physics programs. Suprising that they did not recommend that these be extended and improved ... if they did, perhaps the LHC would now be in the USA, and not in Europe!

Competition is good (3, Insightful)

Chapter80 (926879) | more than 5 years ago | (#25112561)

I don't see an issue with this. I know I'll get modded down to oblivion, but I see no problem with teaching people A method to compete in the market place.

I'd actually be disappointed if information like this weren't being taught in Silicon Valley!

Re:Competition is good (1)

QuantumG (50515) | more than 5 years ago | (#25112605)

There's a reason why people talk about fair competition.

This is not.

Re:Competition is good (2, Interesting)

nomadic (141991) | more than 5 years ago | (#25112669)

This is not.

Why not?

Re:Competition is good (0, Troll)

liquidpele (663430) | more than 5 years ago | (#25112725)

Obviously because they aren't throwing up their hands in surrender to the open source lords and declaring their allegiance to Linus.

You're correct that this is just regular old competition, and better competition between ANY projects, open or closed, will almost always result in better software all around.

Re:Competition is good (1)

Spy der Mann (805235) | more than 5 years ago | (#25112943)

You're correct that this is just regular old competition, and better competition between ANY projects, open or closed, will almost always result in better software all around.

This leads us to an important question: Is there competition in the Open Source world?

Then I go to http://www.distrowatch.com/ [distrowatch.com] and see the answer for myself: Yes, there is.

Re:Competition is good (-1, Troll)

Reality Master 201 (578873) | more than 5 years ago | (#25112967)

Then I go to http://www.distrowatch.com/ [distrowatch.com] and see the answer for myself: Yes, there is.

You're confusing fragmentation with competition.

Re:Competition is good (1)

aweraw (557447) | more than 5 years ago | (#25113035)

for 5 points: what is the fragmentation a result of?

would that be competition?

Re:Competition is good (0, Troll)

Reality Master 201 (578873) | more than 5 years ago | (#25113107)

Uh, no. In the case of linux, fragmentation is the result of lots of people producing more or less the same product with incompatibility because the barrier to entry is relatively low.

Re:Competition is good (1)

pizzach (1011925) | more than 5 years ago | (#25112993)

Yes, this is just competition business style. It's the kind of competition where many businessesmen start weighing money over the public good/human lives. No wonder Ford made the Pinto with MBAs coming out like this.

It doesn't even make sense since there are perfectly viable business models built on open source. It sounds like the old "open source is communism" meme made it to the teachers in Stanford from Microsoft. Do they hire ex-microsoft execs as professors?

Re:Competition is good (2, Insightful)

QuantumG (50515) | more than 5 years ago | (#25113101)

I call it American-style competition. Instead of making a better product or giving the customer what they want, they work to crush the competition and give the customer no choice but to buy their product. The purpose of competition in markets is to give the customers what they want at the best possible price.. as soon as your goals vary from that you're no longer a part of the solution, you're part of the problem.

Re:Competition is good (3, Insightful)

clodney (778910) | more than 5 years ago | (#25113193)

But realize that to the huge majority of the world, and certainly to the majority of business executives, there is no moral stigma attached to proprietary/closed software. Just as the GPL exists to enforce the wishes of the copyright holder on all downstream consumers, there is nothing morally wrong with a company offering its products for sale on its own terms - specifically with no rights to the source.

Given two morally equivalent choices, won't business people always opt for the one with the greater return on investment?

Proprietary software has paid my mortgage for many years. I am skeptical that open source would generate the same standard of living for me.

Re:Competition is good (2, Interesting)

aweraw (557447) | more than 5 years ago | (#25112973)

This course isn't about how to compete in a market. It's about how to control one... if you control the market, you're in a pretty good position to be "unfair" to your competitors - and to that end, this course appears to encourage that

Zed Shaw is right: fuck the ABG

Re:Competition is good (1)

David Gerard (12369) | more than 5 years ago | (#25112713)

No, it's comedy marketing of snake oil.

Re:Competition is good (1)

Macthorpe (960048) | more than 5 years ago | (#25112773)

I disagree - I think this is entirely fair. If you want to compete, compete, but don't assume you can wait for someone else to write good code and then absorb their hard work into yours without compensating them for it.

Re:Competition is good (3, Insightful)

Darkness404 (1287218) | more than 5 years ago | (#25112729)

Competition is good, but bad teaching is not. Proprietary software is going downhill. Just about every major software vendor that remains proprietary is losing marketshare and money. Teaching people how to "combat" open source software is like teaching people how to "combat" C and claim that COBOL is the language of the future. Its not going to work. Open source is the future, proprietary software is dying.

Re:Competition is good (4, Insightful)

liquidpele (663430) | more than 5 years ago | (#25112851)

A better analogy is the RIAA combating file sharing, instead of simply adjusting to the changing market. A good businessperson will choose the strategy that makes the most for their business, not try to force their company's will on the free market.

Re:Competition is good (1)

Darkness404 (1287218) | more than 5 years ago | (#25112885)

Well, yes, but you know how mods are on /., you would either instantly be modded a troll or a +5 insightful.

Re:Competition is good (1, Redundant)

liquidpele (663430) | more than 5 years ago | (#25113187)

I gave up trying to read the mods and caring about what I was rated a long time ago - and my stress level went down too!

Re:Competition is good (0)

Anonymous Coward | more than 5 years ago | (#25112987)

Just about every major software vendor that remains proprietary is losing marketshare and money.

Yeah! Like Apple! Oh no, maybe not. Microsoft may have lost a little market share, but they are still generating lots of cash. Same with Oracle.

Teaching people how to "combat" open source software is like teaching people how to "combat" C and claim that COBOL is the language of the future.

Well, if you are hired to work for a COBOL vendor, you would say exactly that. You might produce sales material to show how your product is better than the competition (*cough* buffer overflow *cough*). You might point to all the solid reliable COBOL code that still runs very important financial systems 24x7.

Marketing is a reasonable part of any product or service. Procter & Gamble is a very large company whose biggest assets are brands & marketing. Coke is just flavored water - the reason Coke is worth billions is marketing.

Open source is the future, proprietary software is dying.

You forgot to add "Netcraft confirms it!"

Re:Competition is good (1)

Darkness404 (1287218) | more than 5 years ago | (#25113079)

Yeah! Like Apple! Oh no, maybe not. Microsoft may have lost a little market share, but they are still generating lots of cash. Same with Oracle.

Yes, like Apple who has OS X based off of what? Oh yah, BSD which is open source, which uses what? Oh yah X which is open source, along with KHTML/Web Kit which is open source. MS lost both marketshare and mindshare with Vista. Everyone, from the kid down the street to the sysadmin to the 50 year old knows that Vista sucks. There is no denying it.

Marketing is a reasonable part of any product or service. Procter & Gamble is a very large company whose biggest assets are brands & marketing. Coke is just flavored water - the reason Coke is worth billions is marketing.

Yes, but most proprietary software companies are all marketing (see MS for an example) and have little code. In your example, Procter & Gamble make decent products, Coke makes a soda that tastes good. On the other hand, MS would be equivalent to a company that sold products that not only were inferior to the competition and cost more but were broken and I don't think that even Coke would survive if they started selling cans half the size of Pepsi's and charged just as much, or if they started making bad tasting Coke *cough* remember New Coke *cough*

Re:Competition is good (0)

Anonymous Coward | more than 5 years ago | (#25112879)

The problem stems from the fact that it isn't being taught in silicon valley, it's being taught to business students. There's already a huge divide between the technologists and the management in most companies and this will only serve to widen that gap.

Re:Competition is good (0)

Anonymous Coward | more than 5 years ago | (#25112963)

Also, they're publishing the information. Treat this as exposing Open Source vulnerabilities in the marketplace. You don't want to try basing Security of Open Source marketability through the Obscurity of not knowing how it can be crushed by commerical tactics. Getting detailled analysis like this is good, irrelevant of author position. In this case author position is an advantage because the hostility makes it thorough. It's like being handed the BlackHat's tactic book. Read up, and start thinking structurally about the longevity of your software project against these tactics.

Re:Competition is good (1)

rubycodez (864176) | more than 5 years ago | (#25113023)

they should be teaching all the models, not just one

resistence is futile (4, Insightful)

Brain Damaged Bogan (1006835) | more than 5 years ago | (#25112599)

unless your product is targeted at such a small subset of users that noone in the OSS world would bother to create a competing product there will always be some geek out there willing to dedicate all their spare time to create something that will compete with your product... for free. What proprietry vendors need to do is charging for software as a service and provide support packages that the OSS world don't bother to do.

Re:resistence is futile (3, Funny)

David Gerard (12369) | more than 5 years ago | (#25112649)

There's a reason Macs outsell Linux [today.com] .

a gift economy (1)

Phantom of the Opera (1867) | more than 5 years ago | (#25112767)

The web is a gift economy in many ways. Pay for doing a web search? Ha! Pay to translate Spanish into Finnish? Hunt around a little.

The law of supply and demand is warped when the supply (of zeros and ones) is effectively infinite. DRM exists to artificially set the supply back to a finite amount. I'm not making a value judgement about DRM but it seems like a difficult battle to win for its proponents.

Re:a gift economy (2, Insightful)

liquidpele (663430) | more than 5 years ago | (#25112825)

This story is about closed source competing with open source projects, not about DRM. Unless my reading comprehension is a lot worse than I thought..

Re:a gift economy (1)

Phantom of the Opera (1867) | more than 5 years ago | (#25112977)

I suppose I did veer a bit off track. I think of DRM when I think of closed source software, because DRM is often used to enforce the purchase of such software.

In any case, the closed source model, discounting shareware and nagware uses the law of supply and demand as a business model. The law of supply and demand doesn't function well when you throw in the ability to make near infinite copies at a cost of nearly zero.

I wonder if they are teaching the dynamics of free software and the reasons why people would create such a thing.

For new, non-essential closed source software to be successful, it has to be really killer and neato. The reality is that the duration of its success is going to be limited in this economy due to pressures from not only open source, but other closed source software as well.

Re:resistence is futile (5, Insightful)

DrEldarion (114072) | more than 5 years ago | (#25112901)

That will compete? Maybe. That will compete well? That's another story. Photoshop is still worlds better than GIMP. There's still no real competition for AutoCAD. How are those open source games doing against their commercial counterparts?

Thinking that open source is naturally better than closed source is just as foolish as thinking closed source is naturally better than open source.

Re:resistence is futile (1)

gzipped_tar (1151931) | more than 5 years ago | (#25112945)

>What proprietry vendors need to do is charging for software as a service and provide support packages that the OSS world don't bother to do.

Or better: eradicate the geek culture?

Re:resistence is futile (1)

Fulcrum of Evil (560260) | more than 5 years ago | (#25113021)

unless your product is targeted at such a small subset of users that noone in the OSS world would bother to create a competing product

You must also ensure that the target market doesn't decide to just collaborate and build something for themselves.

Re:resistence is futile (1)

Kjella (173770) | more than 5 years ago | (#25113029)

unless your product is targeted at such a small subset of users that noone in the OSS world would bother to create a competing product

End-user software, sure... but I see a pretty huge chunk of business software that is no one man's itch - nobody itches for an accounting or payroll or HR system or whatever. Those that need it are pretty much all concerned with running their core business not going off on some OSS sidetrack. In other areas it seems like the intersection between programmers and users are very low, like say video editors. If you've tried any of the OSS editors and compared them to commercial ones, you know what I mean. All in all, I don't think closed source companies will disappear for a very long time even if Windows/Office were to disappear (and that's a looooooong way to go there too).

I'm curious (-1, Flamebait)

Anonymous Coward | more than 5 years ago | (#25112619)

In the long term, what happens if all software ends up being free? Wouldn't there cease to be many programming jobs where there once were? Wouldn't that lead to lower paying programming jobs in turn leading to less cs graduates and lower quality software? I know some companies do alright supporting products they've written and give away freely, but I can't see that extending to applications beyond some mission critical business system type things. I've long wondered things such as this. OSS sounds great at a glance, but I really have a poor concept of where it will go in the long run. I like writing software, but I also like being able to pay my bills.

Re:I'm curious (4, Insightful)

QuantumG (50515) | more than 5 years ago | (#25112667)

The 90s called, they want their argument back.

Many programmers are paid to work on free software these days.

In fact, the problem isn't finding jobs, the problem is finding programmers.

Re:I'm curious (-1, Troll)

Anonymous Coward | more than 5 years ago | (#25112793)

It's not an argument. Its a legitimate question. No need to be a prick.

Anyhow, it is my understanding that most of these paid OSS jobs are funded by proprietary software. I ask when there is no proprietary software, how will the industry survive. What will fund it?

Re:I'm curious (0)

QuantumG (50515) | more than 5 years ago | (#25112813)

You understand wrong.

Re:I'm curious (1, Troll)

gnupun (752725) | more than 5 years ago | (#25113139)

Understand what wrong? You imagine people will keep working on software out of altruistic desire forever? Many people I know are in this profession solely for the high salaries. Once OSS peanut-salary is the norm, they will dump this profession like a cheap rental suit.

Free software, free music, free movies, free everything! This is turning into a planet full of self-righteous leeches.

Re:I'm curious (1, Insightful)

Anonymous Coward | more than 5 years ago | (#25112681)

Wouldn't there cease to be many programming jobs where there once were?

No, why would there be?

Wouldn't that lead to lower paying programming jobs in turn leading to less cs graduates and lower quality software?

No, why would it?

Got any other FUD you'd like answered?

Re:I'm curious (0, Troll)

David Gerard (12369) | more than 5 years ago | (#25112739)

Yeah. Apple has declared itself officially Evil, and they're vastly successful. Microsoft's evil is really pretty mediocre and ineffectual these days, but man, they used to be top class at evil.

So when do we get some really evil Free Software, huh?

Re:I'm curious (1)

Ost99 (101831) | more than 5 years ago | (#25112881)

I'll give you a hint. It starts with a G

Re:I'm curious (0, Informative)

Anonymous Coward | more than 5 years ago | (#25112911)

No, why would there be [less jobs]?

When you give something away freely, you don't get paid for it. When you don't get paid for it, you don't have a business. When you don't have a business, you don't have employees. If you don't have employees, you don't have jobs.

The simple fact is the software industry must take in the amount it does, to continue paying people what it does. If it takes in less, it must pay fewer people and/or pay each person less. That is, unless there is some other source of funding that I am unaware of (hence my first question. How will it work?)

No, why would [lower wages lead to less graduates/quality]?

With any vocation, there are a few who would pursue it regardless of compensation for pure love of the work. However, the ability to make a good living doing something is a large factor for many. For instance, I majored in computer science over philosophy because I could/did get a high paying job as a result. If software developer ceases to be a high paying job, you will see less people trying to become software developers. Simple economics. Once you have less people doing something, the less likely you are to get that one brilliant person who creates something great.

This isn't fud. This isn't trolling. I simply don't understand the OSS endgame and would like to know.

Re:I'm curious (-1, Flamebait)

Anonymous Coward | more than 5 years ago | (#25113075)

Are you *really* that stupid, or are you just trolling?

Re:I'm curious (3, Insightful)

Darkness404 (1287218) | more than 5 years ago | (#25112823)

In the long term, what happens if all software ends up being free?

In the present, all software is free http://www.ubuntu.com/ [ubuntu.com] http://thepiratebay.org/ [thepiratebay.org]

Wouldn't there cease to be many programming jobs where there once were?

No... Most software would still be developed in-house. What will cease is companies who can make a bloated program that is badly written and gain millions for it.

Wouldn't that lead to lower paying programming jobs in turn leading to less cs graduates and lower quality software?

No. It would only serve to increase the quality of code as the fact that it compiles does not mean that it is good code. Open source software has no secrets, the quality would go up because anyone could fix it.

I know some companies do alright supporting products they've written and give away freely, but I can't see that extending to applications beyond some mission critical business system type things.

Ever heard of the Geek Squad? They make a fortune supporting products that they never even written and most are trivial applications (Windows, iTunes, etc)

I've long wondered things such as this. OSS sounds great at a glance, but I really have a poor concept of where it will go in the long run. I like writing software, but I also like being able to pay my bills.

Where do you work now? Chances are, that company will still develop applications in house, not to mention that you would be in charge of changing various OSS programs to better fit the needs of the company.

Re:I'm curious (0)

Anonymous Coward | more than 5 years ago | (#25113189)

In the present, all software ... http://thepiratebay.org/ [thepiratebay.org]

I'd like to think people don't buy things ONLY if they can't steal them. As for Ubuntu, that required millions of dollars to start. I don't think "donations from billionaire entrepreneurs" is going to be a successful MO for most companies.

No... Most software would still be developed in-house.

Business software, as mentioned in my first post, is more compatible with OSS as far as I can tell. What I'm having a harder time grasping, is how it will work for media players, games, operating systems, messengers, etc. Those very rarely are developed "in house" as your average US household has no programmers in it.

Ever heard of the Geek Squad?

touche. However, the amount of money Geek Squad brings in pales in comparison to the amount of money proprietary software brings in.

Where do you work now? Chances are, that company will still develop applications in house, not to mention that you would be in charge of changing various OSS programs to better fit the needs of the company.

My company writes software predominately for business end users. Our only "in house" stuff is a build system and Trac. We function almost as a remote IT department for our customers so I suspect we could go open source and survive. I don't see this as being the case for the majority of software developers who have a less personal relationship with a greater number of customers (especially when OSS projects don't have any proprietary software funding sources)

Re:I'm curious (1, Informative)

Anonymous Coward | more than 5 years ago | (#25113005)

In the long term, what happens if all software ends up being free? Wouldn't there cease to be many programming jobs where there once were? Wouldn't that lead to lower paying programming jobs in turn leading to less cs graduates and lower quality software? I know some companies do alright supporting products they've written and give away freely, but I can't see that extending to applications beyond some mission critical business system type things. I've long wondered things such as this. OSS sounds great at a glance, but I really have a poor concept of where it will go in the long run. I like writing software, but I also like being able to pay my bills.

Somewhat paradoxically, very few programmers actually sell software for a living. What most programmers actually sell is their programming skills. They often sell those skills to a proprietary software vendor, who in turn sells software to the public. However it is just as viable for a programmer to sell programming skills to an open source software vendor, who in turn releases the source code to the public and sells services (support) in that software to the public. One business that does this is IBM ... so their can't be any claim that it isn't a mainstream practice. IBM probably hires more programmers than almost anyone else.

An open source software business will often release software under a "copyleft" type of open source license provisions, so that competitors cannot take it and make it proprietary.

There are estimated to be about 1.5 million programmers in the world who are writing open source software today. By no means are they all unpaid ...

Not following their own advice? (5, Funny)

HaeMaker (221642) | more than 5 years ago | (#25112637)

They should have left their research closed. Now anyone can take their research, reverse engineer it, and repackage it under a Creating Commons license.

Awesome... (5, Insightful)

JustinOpinion (1246824) | more than 5 years ago | (#25112665)

I'm happy to see that the suggested strategies are ones which carry significant drawbacks. Segmenting markets and keeping everything closed does indeed give you control, but it also slows the very network growth that makes products become successful. And it frequently leads to user frustration (because of, for example, DRM, or the lack of support groups, or the inability to find or construct fixes/hacks as needed).

This is good news in the sense that any strategy to fight open-source means that you emphasize the gap between open-source and closed-source products: the open-source product's advantage is the openness, the community, the ease of distribution, the non-naginess, the network effects, the hackability... and the more closed the closed-source products try to be, the more these items become product differentiators, which the open-source product can point to as big advantages.

So, I do hope closed-source projects go ahead and implement those user-hostile strategies. It will only serve to make open-source products look that much better by comparison. As other posters have pointed out, there is no fundamental divide between "open-source" and "commercial". So I would think the better strategy for MBAs thinking about open-source is "if you can't beat 'em--join 'em". Or in other words, why get involved in closed-source business ventures when an open-sourced equivalent inherently leverages network effects?

Re:Awesome... (1, Troll)

David Gerard (12369) | more than 5 years ago | (#25112759)

These guys are basically selling snake oil to the gullible end of the obsessive control addict market.

Dear Deishin Lee and Haim Mendelson: (-1, Flamebait)

Anonymous Coward | more than 5 years ago | (#25112683)

Eat a bag of dicks.

Sincerely,
Anonymous Coward

Stanford - Sun - Hello (5, Interesting)

SkullOne (150150) | more than 5 years ago | (#25112693)

Stanford, the birthplace of SUN, one of the renowned distributors of a once true and mighty closed and proprietary Unix, that almost fell off the face of the planet in part of it starting to become irrelevant compared to open sourced OS's and systems (Linux, BSD, etc).

The SAME Sun, which has now open sourced almost their ENTIRE IP portfolio in the Open Solaris project, thereby bringing relevancy BACK to Solaris and it's suite of products.
The same Sun which utilizes hundreds of code donors to it's projects, and big communities around storage, ZFS, etc.

Closed, commercial systems have a place, and many of them do well, but when markets change, can they change quickly enough? Lessons show us that they cannot change quickly enough. Or do the closed proprietary systems try and change the market the suit their needs?

Look at IBM, HP, Sun, and even Dell now relying on open *nix systems driving huge sales numbers.

The markets have changed, its those who do not follow trends, or fight the trends who become irrelevent.

The open source model will probably change in a decade, or a century and it too will have to change.

The paper is just a way to appeal to stiffley business suit class of people afraid of change.

Re:Stanford - Sun - Hello (-1, Flamebait)

Anonymous Coward | more than 5 years ago | (#25113127)

but when markets change, can they change quickly enough?

The PC market changed and started demanding audio, yet open source linux is still caught up in the change by trying to standardize on one of 6389382 audio APIs.

In the further quest for desktop multi-media, the markets have changed and demanded Flash capability for web browsing. Uhhh, nope, Linux hasn't made it there yet either.

It would be nice... (3, Interesting)

tool462 (677306) | more than 5 years ago | (#25112737)

if they also taught a course on open-source economics. I.e., how you can make a successful business through the selling of services. It would be useful, since I get the impression that a lot of the folks who are open-source advocates really don't have much business sense. That's not meant as an insult--I know my business skills are mostly lacking. It's a big part of why I wouldn't start a business myself. It might have the added benefit of giving some of the commercial==closed-source people some ideas on where it can make sense to use open-source in their own businesses. I work with a guy who can't understand why anybody would ever contribute to open source. He sees it as people giving away valuable brain juice for free.

It's a research paper from February (5, Insightful)

Sockatume (732728) | more than 5 years ago | (#25112743)

From the press release that this guy links to (the paper is actually here [atypon-link.com] ):

A recent paper on this topic by Mendelson, coauthored with Deishin Lee, PhD â(TM)04, now a faculty member at Harvard Business School, is not a how-to manual for hard-pressed executives. Rather the researchers have built a theoretical model explaining the choices open to commercial firms. âoeAlthough open source is the lead example of our work, the principles certainly apply to other businesses, including, for example, the media business,â says Mendelson.

Heaven forbid that somebody actually study how businesses choose between free and proprietary software! That's of no good whatsoever! And of course free-as-in-speech definitely does not extend to a university allowing its academics to publish material which might be bad for open source. Clearly Stanford should've had these two men killed and fed to rabid, pestulent chipmunks, rather than allow this affront to reach the press.

natural order (3, Interesting)

khellendros1984 (792761) | more than 5 years ago | (#25112775)

âoeFirst they ignore you, then they laugh at you, then they fight you, then you win.â

I think we've been in that penultimate step for a while now. Here's hoping Ghandi was right =)

Bad Paper - No Clue - F (3, Interesting)

salesgeek (263995) | more than 5 years ago | (#25112791)

The two strategies presented are not strategies against software.

The first, embrace and extend is a play against already established standards, and usually is applied to protocols and APIs but not to package software. Most successful E&E campaigns have been against standards implemented in closed source systems. Most of MS success was before the rise of Open Source as a viable model. Generally E&E fails against open source competition (see firefox, Apache, Linux v Unix, etc...).

The second was just a trashcan "make a better product" and "hide it from the competition" kind of suggestion. Oh, and segment your market better... problem is that it's assuming that your open competitors can't make better products or segment better.

fatally flawed (1)

tdos20 (992697) | more than 5 years ago | (#25112811)

Even if consumers do not end up adopting the free product, it can act as a credible threat to the commercial firm, forcing it to both lower prices and invest more in product innovation

-Haim Mendelson
Surely if there is a desire for a product then the market will speak for itself - maybe more market research would be a good idea.

20/hr (1)

phrostie (121428) | more than 5 years ago | (#25112875)

and when they graduate they can take one of those 20/hr jobs at bestbuy incouraging the use of Vista

Summ. author has an open source block on shoulder (4, Insightful)

bobdotorg (598873) | more than 5 years ago | (#25112929)

The slashdot summary author (mjasay) appears to see the world through a lens which makes the developers of open source software victims of some nasty MBA conspiracy.

The academics who wrote the underlying article go out of their way to say that their writings are not a 'how to' manual for MBAs, and that open source software is only one example.

The article is simply a recent take on 'How to compete with free,' an important MBA marketing topic for decades. 'How to compete with free' can be considered a subset of how to compete in general, and the gist of any marketing solution to 'how to compete' will be based on building value in the product.

One method to build value is to increase switching cost through lock-in. Even free / advertising supported services do this: my.yahoo, iTunes, gmail, hotmail and countless others.

If you read the underlying academic article, you just might notice that most of the tools presented now are analogous to the tools presented at Sanford in the early nineties to the MBAs who eventually went on to Coke and Pepsi to fight the scourge of FOSW (Free Open Source Water).

Open source water survived just fine. As long as open source software continues to offer value, it will continue to thrive.

Marketing is marketing. MBA courses are MBA courses. Same shit, different year.

Please Stop! (0)

Anonymous Coward | more than 5 years ago | (#25112937)

For Pete's sake, I like open source software as much as anyone else, but shut up already. Yes, really. Stop pushing open source on everyone like it's the only right way of doing things. Not every software solution falls neatly into the category where software can be given away freely.

What is it with this more-or-less recent bashing of anything that is not open? NOTHING else in life is expected to be given away for nothing, yet here we are in a time where certain people just can't deal with the fact that in life, you pay for products. Yes, there are many benefits to opening the source of your product. But it also provides your competition with 100% insight into your business.

Seriously, I just don't get it. If you want to open source your code, go right ahead. But stop forcing your way of doing things onto everybody else. It's truly bloody annoying.

MBAs are idiots when it comes to technology (1, Interesting)

Anonymous Coward | more than 5 years ago | (#25112951)

I'm not saying this to be inflammatory. Honestly.

I work for a university, where I maintain their Learning Management Systems (LMS) - software used to deliver course content online.

We use a combination of open source and proprietary LMSes: Moodle, WebCT and Blackboard.

When it comes to actually being able to grasp even simple online concepts, the Business faculty are at the bottom of the barrel. The people in the MBA program? Entirely clueless about technology ... which is disturbing as my school offers an MBA that specializes in tech.

Very, very scary people.

Re:MBAs are idiots when it comes to technology (1)

ciaohound (118419) | more than 5 years ago | (#25113071)

You are making a sweeping generalization, of course. I earned an MBA in 2000, and I'd estimate that a third of the students at my school were engineers, pretty bright and interesting people, too, and not all bound for Wall Street finance jobs. My study group included a Stanford-trained engineer who remains one of the smartest guys I know. He's working on optical routers and he is as technically competent as they come.

So there.

MBAs are idiots (1)

HornWumpus (783565) | more than 5 years ago | (#25113149)

Fixed the title for you.

Query (2, Insightful)

Anonymous Coward | more than 5 years ago | (#25112955)

Why is Slashdot so biased towards open source?

If you strike me down... (1, Interesting)

Anonymous Coward | more than 5 years ago | (#25112965)

"First they ignore you,
Then they laugh at you,
Then they fight you,
Then you win."

Mohandas Karamchand Gandhi

Re:If you strike me down... (1)

Tubal-Cain (1289912) | more than 5 years ago | (#25113011)

And it only took what, 25 years?

Hmmm (2, Interesting)

jav1231 (539129) | more than 5 years ago | (#25112971)

I'd rather get my MBA from someone who gives me the tools to actually compete in the market place. Not teach me ways to circumvent competition and leverage market share through these tactics. There's already a university for this. It's called the street. I'm surprised these guys aren't named Guido and Mugsy.

Not Surprising.... (1)

japhering (564929) | more than 5 years ago | (#25113077)

Enough people.. feel that Open Source is bad for business and bad for the corporate economy, that I'm surprised it took this long.

It is always fun to walk by the corp IP department offices while talking about Open Source... just to watch all the lawyers squirm

Shame (1)

DaMattster (977781) | more than 5 years ago | (#25113155)

It is a sorry shame that the university, a place of free and open ideas, should openly advocate against the use of open source and/or an embrace and extend mentality. I for one an very much pro open source and the grass roots of open source will win out over the long haul. Especially, when market driven economics suggest that if there is a less expensive (albeit free) alternative, people will gravitate to that solution. The advice these professors have given to their students is very poor. Look at Microsoft where there was a huge EU judgement that forced open their protocols to good and adequate documentation. The amount of money Microsoft spent defending and deferring this judgement would have been better spent on research if they had just not tried to play the big, arrogant bully on the block.

Don't be paranoid, open sourcers (3, Interesting)

jfruhlinger (470035) | more than 5 years ago | (#25113165)

The headline is misleading. The MBA students aren't learning how to fight open source as an abstract concept; they're learning what to do when your business produces a piece of proprietary software that competes with an open source product.

I'm all for open source and use a lot of open source apps, but I don't believe that such a dilemma is always most profitably answered with "embrace open source yourself."

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