Cool Solutions

Open Source threat to Microsoft


October 19, 2005 4:34 pm





I like Dana Blankenhorn’s argument about the open source threat to Microsoft. Open source is a development model, first, but it’s also a business model fundamentally altering the economics behind software. Dana highlights the law of mass production, and makes a solid point. But there’s another interesting economic dynamic at play. As more solutions become open source based, we’re moving from a world built on a software licensing model to one built on a subscription model around services and upgrade protection. As Novell’s CEO Jack Messman has said on multiple occasions, this is what we’ve all called “maintenance” in the traditional software world. With the decline in NetWare license revenue over the last several years, Novell has already grown accustomed to living on higher maintenance revenue and declining license fees. This makes the move to suscription revenue under an open source model less disruptive to us than it might be to companies still heavily dependent on license revenues. You can figure out who those companies might be.

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Categories: Expert Views, PR Blog


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1 Comment

  1. By:Jeff Craig

    Makes for easier budgeting and cost controls. It seems that with subscription/maintenance more IT dollars can be planned for 1 – 4 years increments versus one-time outlays.