MBAs Being Taught To Fight Open Source By Offering Closed Source Alternatives?
from the get-a-refund dept
The Slashdot crowd is reasonably up in arms of a paper jointly written by a Harvard Business School professor and a Stanford Graduate School of Business professor on ways to compete with open source competitors. Amusingly, nowhere in the paper does it suggest that one of those strategies might be to go open source yourself, embracing the actual benefits of openness and infinite goods, and focusing on better business models involving scarce goods. In fact, it doesn't even seem like the paper recognizes the rather large businesses created around open source software, with the totally false implication being that open source isn't a business, but a hobby. Frankly, the whole thing gives MBAs a bad name, by suggesting that they're not being taught to actually understand how open source can be used within a business model. That's unfortunate, because it's simply not true -- at least at some schools. Much of my own journey down the path in exploring the economics of infinite goods started thanks to my own MBA professor Alan McAdams at Cornell, who was teaching how important open source models were to the success of the internet and businesses back when I first took his class in 1996 or 1997.Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
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Filed Under: competition, cornell, harvard, mbas, open source software, stanford
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Woooooshhh goes the point
A person might mend up in a management position in a company that has a certain business model, and has to deal and compete with Open Source companies.
Just like a person might end up working at Coca Cola, and competing with healthy juice products for instance. That is his job. His job is not to convince everyone that Cola is bad, and switch to juice because there are so many opportunities in that market. A person is hired to do a job, and sometimes that job is to compete with Open Source. Not to think up new company strategies, but to compete in a certain market with a certain product.
That paper helps those people.
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Re: Woooooshhh goes the point
A person might mend up in a management position in a company that has a certain business model, and has to deal and compete with Open Source companies.
Indeed. But wouldn't one of those strategies be "open up yourself"? Yet, that doesn't even seem to come into play.
So, yes, companies have to deal with open source competition, but it's the exact wrong message to suggest that they stay closed.
That paper helps those people.
No. It doesn't. Because it's telling them the exact wrong thing.
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Re: Re: Woooooshhh goes the point
1) Change the company's entire business model
2) Generate HUGE R&D + Retraining costs . HUGE.
Going open source is nice and all, but this is pretty much the biggest R&D challenge a company can face, should such a decision be made.
Many MBAs are hired to compete in a market, WITHOUT drastically changing company R&D and product lines. This is one of the challenges of being a manager - being given predefined ideology and and a limited amount of resources, and achieving the desired goals in terms of revenue and market share.
I am not saying (and neither is the paper) that it's good or bad, but it just provides advice to people that face these exact challenges.
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Re: Re: Re: Woooooshhh goes the point
Also, "going open source" isn't a sudden, drastic change. There are strategies that allow the business to ease into open source.
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Re: Re: Woooooshhh goes the point
If, instead of wholeheartedly agreeing with the Slashdot people, you had analyzed the aspects of the the position the MBA students took and then suggested that going open might have been another strategy they could have considered, then your piece might have been better received.
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Re: Re: Re: Woooooshhh goes the point
If you had considered the polarizing effect of self-selected feedback, then you might have considered that Mike's piece actually is being very well received. So far I only count a half-dozen naysayers (some who agree in part). That can't possibly constitute the entire body of Mike's readership.
You run a risk of your own point going 'woooosh' when you build it on the backs of the Pajama Haddim.
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Re: Re: Woooooshhh goes the point
Completely changing your business model to compete with open source by becoming open source may be one way to go and certainly an option to consider, but it's hardly the only option. That this paper discusses the "other" options is in no way the "wrong" message or telling such businesses the "wrong" thing.
Others here have given reasons why "closed" source products can be more desirable and successful than their open source competition.
Open source may be one way to go, but it's not the only way, or even the most beneficial way for a particular business. It's not one-size-fits-all.
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Re: Re: Re: Woooooshhh goes the point
Completely changing your business model to compete with open source by becoming open source may be one way to go and certainly an option to consider, but it's hardly the only option.
Nor did we say it was. But ignoring it is a huge mistake. Because, in the long run, you won't be able to compete with open solutions if you insist on remaining closed.
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Re: Re: Re: Re: Woooooshhh goes the point
Well, "it's the exact wrong message to suggest that they stay closed" comes pretty close.
Staying "closed" may indeed be the best approach for some or even many companies in the short or long run for a variety of reasons.
And, indeed, the news report you linked to does mention going "open" as an option, so it wasn't ignored at all:
My point being that producing a "open" product may be appropriate just as producing a "closed" product may be appropriate given a particular business-case. "Open" isn't necessarily the "best" or even "better" option, and depending on how the product life-cycle is managed, staying "closed" may compete just fine with "open" alternatives in the long run.
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Re: Woooooshhh goes the point
Coca Cola also competes by actually purchasing the competing company and continuing that company's business on their own books. This has happened in the open source community as well.
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My head! My head! YIKES MY HEAD!
Of course, I'm not speaking of you, Mike. You get it. Oh man, you get it. But these other guys.. How the heck do they think.. Sorry, I need to stop or else I am going to force myself to have a cerebral aneurysm.
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Missing the point
Most people are hired to accomplish desired goals, period. They might find that some of the roadblocks to accomplishing said goals are predefined ideology and limited amount of resources, but generally speaking you hire someone new to change the way you do things, to provide a fresh perspective, introduce new DNA, etc.
Sure that might not be what happens in the end, but no one ever gets hired to just keep doing the same thing.
That being said, open source might not be practical for some enterprises, but it should be considered even if only to impress your bosses with how you're "thinking outside the box" and trying to "change the paradigm."
Not fully educating young MBAs on the possibilities and pitfalls of Open Source is a real disservice to all of us.
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Opensource good?
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Opensource good?
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Re: Opensource good?
A lot has changed and continues to change. Today, for most of the bigger open source companies, customization and support services are their bread and butter.
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Re:
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Re: Re:
The implication of the idea of "infinite" is, in application, a suggestion of a limit approaching infinity as scale increases and as hardware and process improvements continue to come along. Nobody actually thinks it's infinite. The point is that the economics of the supply functions differently because the utility of information is not depletable.
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alarmist sensationalism from f/oss camp
The second link above provides a well written summary that does not sensationalize the paper. The paper addresses one point, which is what to do when your competitor is giving away their product. It specifically mentions software, news/media, and music.
Here's the catch. While building a business on an open source business model can be a fine way to enter a market, there are a lot of business out there which are being forced to compete with a force that they do not know how to reckon with. Namely free or open source. If they do not find out how to compete, they go under. Going open source is not an option for most of them, their investment in their business model may not be convertible in that way. Instead they need to learn how to compete. Which is what the article describes.
Finally, the article gives credit to free products, quoting from the original paper, describing that free products are important to consumers, if for no other reason that they spark competition.
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Re: alarmist sensationalism from f/oss camp
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That said, One cannot lump software into the world-wide category of "goods" and "products" without looking at the entire picture.
Somebody, somewhere, expects to live somehow. A great deal of freeware and shareware, and even open-source, eventually ends up a money-making venture. I know several programmers who have started out open-source, and eventually thought; "Hey, this is as good as regular software, so I'm gonna retire to the Catskills.". Next thing you know, it's sold to a bigger firm, or Microsquash, or just gets a license agreement and price tag on it.
I don't blame them, either. People see a company sell $400 software. They have their own "product", that works as well, that they've been giving away. Maybe they lost their regular job. For whatever reason, they feel their effort should be rewarded in a more tangible way. My favorite backup program ended up like this.
I have noticed, especially lately, that the big trend in the "I think all software should be free!" crowd, even at my workplace, mostly comes from people who only use, not write this software. This is more of a parasitic rather than symbiotic relationship. These people do not click on the "contribute" icon and send even a token sum for software they rave about.
If I go to a car dealer, and pick out a sedan, I do not expect them to just hand me the keys and a title. The salesman won't bring out a hat and say; "You can contribute to the cost of building this, and we would be very grateful.". There are many hours of labor by many people involved here. Does decent software deserve any less?
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Re:
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Sadly that's too often the case with commercial software as well.
I ditched Red Hat when it started becoming the Microsoft of Linux Distros. The engineers there put their fingers in every friggin package.
Mike - as CEO do you use open source solutions at Techdirt? Are you running Linux on the desktop and using OpenOffice for example?
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Big Hobby
Ever hear of Apache ? I believe that a majority of web servers run Apache. That is a big hobby.
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Old School
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