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A hacker's motivations may be intellectual, but the result need not be a lifestyle of sacrifice. More and more, enterprises and individual Open Source programmers are coming together in a new spirit of pragmatism and opportunity.
In Silicon Valley, where we work and live, there is a history of investment and venture capital that powers the economy of the region. It can be traced back to the years when the transistor was first being exploited for commercial gain and the microprocessor became a force in the industry, replacing cumbersome logic boards with thousands of chips and individual transistors on them.
At any given time there is a hot technology that venture capital concentrates on. While they don't ignore other companies and opportunities, they realize that to achieve their benchmarks of economic performance, they don't just need successful companies, they need hot companies that can do an Initial Public Offering (IPO) within three years of investment or be sold for hundreds of millions to companies like Oracle or Cisco.
In 1998, the great wave of the Internet is ebbing; the rash of Internet IPOs that began with Netscape's spectacular debut has begun to decline. In a fitting act of symbolism, America Online's purchase of Netscape really does signal the end of an era. Internet stocks are now looked at more closely by the investment community, and generally Internet companies are held to the same standards as other companies: they must have some plausible expectation of profitability ahead.
So where will venture go? Our guess is that Linux and open-source software related companies are and will be the hot investment through the end of the millennium. With any luck, you will see a great rash of Linux and Open Source IPOs starting with Red Hat software in late 1999. The money out there to be invested is nothing less than staggering, and companies like Scriptics, Sendmail, and Vix.com are well poised to take advantage of the favorable market conditions and build their dream companies.
The question really is not whether venture capital funding will flow to Open Source, but why the flow has only begun to trickle in that direction. Keep in mind, free software is not new; Richard Stallman started the FSF in 1984 and was building on a tradition dating back long before that. Why did it take so long to catch on?
Taking a look at the computing landscape, you've got a situation where a very large company with very deep pockets controls the lion's share of the commercial market. In Silicon Valley, hopeful applications vendors looking for backing from the angel and venture capital community learn very quickly that if they position themselves against Microsoft, they will not get funded. Every startup either has to play Microsoft's game or not play at all.
This creatively oppressive environment is clearly where the original impetus for the rise of free software began to take root. Any programmer who has had to deal with creating programs for Microsoft's Windows operating systems will tell you that it is a daunting collection of cumbersome interfaces designed to serve the goal of making the program completely dependent on Microsoft libraries. The number of interfaces presented to the programmer from Microsoft serve the purpose of making any Windows native program very difficult to port to other operating systems.
The biggest arena that Microsoft has yet to dominate -- the Internet -- has no such restriction. As Scott Bradner describes, the Internet is built on a powerful collection of open standards maintained on the merit of individual participation, not the power of a corporate wallet. The Internet is, in many ways, the original Open Source venture. Keeping the Internet firmly based on open standards made it possible for a wide and diverse range of programmers to work on developing Internet applications. The Internet's spectacular growth is a testament to the power of this open standards model.
The structures inherent in the Internet's success are present in the Open Source movement as well. Linux distributors like Red Hat and SuSE compete, yes, but they compete based on open standards and shared code. Both use Red Hat Package Manager (RPM) as their package management tool, for example, rather than trying to lock developers in to individual package management systems. Debian uses a different package management tool, but because both Debian's and Red Hat's tools are open-source programs, compatibility between the two has been achieved.
So the infrastructure that made Internet technologies a tempting arena for venture capitalists is present in Open Source, and should make Open Source technologies equally tempting.
More importantly, though, the Internet has created a new infrastructure off of which Open Source can leverage. We are moving from the era of software enterprises to the era of infoware enterprises that Tim O'Reilly describes. To make this move, the barriers to entry and the costs of distribution had to be lowered dramatically. The Internet has lowered the bar.