OPEN SOURCE BLOGROLL

Open Source Weblog

Putting a value on the total innovation opportunity of open source
January 24, 2007

Earlier this week I wrote about how open source software has the potential to lower development costs for business users, while at the same time raising their potential to focus on innovative development.

I called this the total innovation opportunity (TIO) and contrasted it with the traditional focus on total cost of ownership, arguing that just focusing on TCO when comaring proprietary and open source software did not take into account the additional gains to be made via the ITO of open source.

Now, via MySQL’s Zack Urlocker, comes an indication of just what this innovation opportunity could amount to – such as it being 30 times less expensive to launch a new start-up.

According to some 2005 figures from Joe Kraus, co-founder of excite and co-founder and CEO of JotSpot, which was acquired by Google in late 2006, open source is one of the main reasons why it cost just $100,000 to launch JotSpot, compared to $3m for Excite:

“Back in 1993 we had to buy and continue to pay for maintenance on everything we needed just to build our service - operating systems, compilers, web servers, application servers, databases. You name it. If it was infrastructure, we paid for it.

“And, not only was it costly, the need to negotiate licenses took time and energy. I remember having a deadline at Excite that required me to buy a Sun compiler through their Japanese office because it was the only office open at the time (probably midnight) and we needed that compiler NOW.

“Compare that to today. Free, open source infrastructure is the norm. Get it anytime and anywhere. At JotSpot, and start-ups everywhere you see Linux, Tomcat, Apache, MySQL, etc. No license cost, no maintenance.”

Admittedly, there are a number of other elements involved, such as cheaper hardware, access to global labo(u)r markets, and the explosion of the search market, but Joe’s figures demonstrate the part open source has to play in lower barriers to innovation.

Zack notes that most of the technology start-ups he can think of are following JotSpot’s example, and suggests that the benefits are too clear for non-technology businesses to ignore:

“Why spend money on expensive proprietary software when open source is better in most cases? It's a good question and one that I think will be increasingly on the radar for executives and board members, not only in startups but in large companies.”

For more on the total innovation opportunity of open source see also:
The innovation opportunity of open source
Balancing open source risk and the total innovation opportunity
EnterpriseDB – the open source total innovation opportunity in action
Unisys aims to ride the wave of open source TIO
Open source TCO and the total innovation opportunity
TCO versus TIO: a simple diagram
Ingres’s Roger Burkhardt on the innovation opportunity of open source