10 Unanimous Verdicts: Closed Cases

As a FOSS (Free, Open Source Software) advocate, I find myself in a state of shock over what I've observed over the past ten or so years in this realm. If I asked you to name the most successful open source companies (Companies that derive the majority of their income from open source software), which ones would you name? Red Hat? Novell? MySQL? Canoncial? Those are all great answers. These three are perhaps the best known and most successful of all the companies that derive their incomes from open source software. Now, what if I asked you to name the most successful software companies in the world--closed or open source? Would your answers change? Yes, unfortunately, they would. In fact, the ten most successful software companies in the world are closed source ones.

I know that "success" is a relative term but I'm talking about success as measured in revenue dollars, stock prices and number of customers. You won't find one open source company among them.

Here are the ten in alphabetical order:

1. Adobe - Just about everyone who has a computer has used an Adobe product by choice or by need. The ubiquitous PDF (Portable Document Format) uses the Adobe Reader to do its presentation. Adobe features other development software such as the old Macromedia lineup and coldfusion.

2. Apple - Apple, the seductress of the computing world, is one of the most successful software and hardware companies and it's all closed source--always has--always will. You can count on Apple to bring you innovation, clever design and products that people want all at a price that many are willing to pay.

3. Autodesk - Purveyors of AutoCAD have long since held the belief that their CAD product is the best on the planet. They must be correct because they have >90% of the CAD software market in their hip pocket and have for the last 20 years. Closed source hasn't hurt their business.

4. IBM - IBM is a huge open source benefactor but it's also one of the largest cloud source software vendors. From the wonderful OS/2 operating system to their AS400 all the way up to their z/OS, you'll not find one shred of open source. Their Tivoli line? Closed source. Lotus? Yep. Closed. In spite of their many closed sources, check out their earnings and liquidity.

5. Intuit - I use QuickBooks. You probably do too or know someone who does. There's no Linux version. There's no source available--legally. There's no company more successful with their small business accounting products. In fact, name another company in that field if you can.

6. Microsoft - The Dark Side of software. Or so open source advocates, like me, would have you believe. Yes, there have been some business practice questions raised in the past, but Microsoft is the largest, most successful software company in history. Like it or not, Microsoft owns the Desktop and the lion's share of applications that run on it. Games, office products, accounting, server software and operating systems reach into almost every home and business in the world. Having closed source products has hurt their reputation among bloggers and free software lovers but it hasn't affected their bottom line. Keep spreading that anti-Microsoft propaganda, like I do, and it still won't matter to them.

7. Oracle - Yes, I realize that I just wrote, "20 Reasons Why Oracle is the World's Largest Open Source Company," and Oracle has done an immense amount of work in open source but their revenue mainstays? Do I need to say it? Closed source. Successful? Oh, yes. Oracle has the majority of enterprise market share for their unbeatable database products.

8. SAP - If you look into any large company, you'll see SAP products. And that's anywhere in the world. Their CRM (Customer Relationship Management) and ERP (Enterprise Resource Planning) products are the Gold standard for business. Sure they allow people to create APIs and other connectivity software but the main products are all closed source.

9. Symantec - Norton, BackupExec, Ghost and Antivirus. Closed source. Success. Simply Symantec. Few products match the quality and success of Symantec's and they've been around a long time. To this day, I've never found a better product than Ghost for cloning machines (P2P). I wish they'd come out with a P2V, V2V and V2P products for virtual machines. So far I haven't seen any others that I'd own.

10. VMware - Speaking of virtual machines. This closed source software company has made zillions of dollars with their top-rated, enterprise virtualization products. They enjoy a >90% market share of the virtualization space and all the free products in the world can't seem to change that. Why is that? Quality. Expertise. Support. Reliability. Sure there are open source products that have all those too and at a tenth, or less, of the cost. So what is it about VMware that makes it so successful? Innovation. They are the best. Closed sources and all.

So, what's the lesson here? Do you have to create a closed source software product for it to be successful? No. But it helps. There are those open source exceptions and perhaps their numbers will increase over time but the odds are in favor of closed source software.

I didn't say that I like it. I'm just the messenger.

What do you think? If you were to start a new software company today, would you start an open source or closed source one?

[macias]

Closed source (if it would be serious). I don't see any point in letting others (potential competitors) look in my code. I am 100% convicted of principle for business -- closed source, open mind, meaning I would listen to users and make software as flexible as possible (if users would like to use my word processor as database I would not introduce countermeasures to prevent such usage).

I am Linux user not because it is open-source (in 10 years I had time to make two patches in others programs) but because most Windows software is too narrow minded (starting from Windows itself). Yet I bought several Windows programs (including Windows and MS Office) and none of Linux (because they are not sold).

[GaGa41]

Hmmm....I see your point. But you claim success == revenue/income. I would say that it's just not so. MS has grown into a behemoth since the Win95 days and in what way has that growth benefitted us? A moderate improvement in software quality and ruthless anti-competitive behaviour that does untold harm to the system (which relies on competition as it's main motivator). I would say that it doesn't really matter how much your company makes as long as it's healthy. I'm more interested in seeing what becomes of the licensing business model in the next decade as the FOSS licenses are tested in courts and the business world.

It also seems to me that twisting community based FOSS projects into a shape that will produce money (like what Google does sometimes) is pretty ugly, causes unintended consequences and shouldn't be encouraged.

I'm a hardcore linux user (more then a decade now) and find that my world view has changed somewhat because of that. While there are many people who have built their careers on FOSS projects and many more continue to do so, it seems to me that moneymaking is just a byproduct of FOSS culture and not the main goal. So it's not surprising that giant corporations aren't in the same league as the best FOSS-based companies. Nor do I want them to be.

[gedece]

While it's true that SAP is a propietary system, it's not closed source. Every SAP installation includes access to SAP source code. While this is not open code in the same way that FOSS is, this is far from closed source. You can actually see what everything does, debug it and program around or even inside it.

And VMWare was sort of forced some time ago to go the open source way, funny thing is most people I know is not aware of this.

http://www.vmware.com/download/open_source.html

[penguiniator]

As was pointed out above, you are equating dollars with success. It should also be pointed out that dollars are not the only measure of value and that the value returned to developers of Open Source software is derived from the additional effort and code contributed by volunteers, paid or not, and not derived only from dollars. And what's more, the value accrues to society at large, not to a single corporation.

Closed source software is really a black box automated service that is a benefit to society only so long as it is being marketed. It contributes no long-term benefits to society beyond that. And because of this, closed source software benefits its creators largely at the expense of society.

Open Source has more in common with the scientific community than it does with the service industry of closed source software. Society gains long-term benefit from a growing body of knowledge derived from the freely available source code of Open Source projects. It is a completely different paradigm to closed source software that undermines that model while building value for the benefit of society. From an Open Source perspective, companies like Microsoft are pretending that scientific knowledge (software) is some kind of magic that gives them superhuman powers, while knowing that they are only fooling unsuspecting people into paying exorbitant fees for a short-lived magic show. Open Source exposes that trick for what it is. That is why companies such as Microsoft, who created their entire business model around the magic show of closed source, are so threatened by it.

That is also why, in the long-term, the closed-source model will die. It cannot sustain itself in an environment where there is a growing wealth of freely available software. Closed source depends on scarcity to maintain its value. Open Source eliminates scarcity.

[GlennThigpen]

As a FOSS (Free, Open Source Software) advocate, I find myself in a state of shock over what I've observed over the past ten or so years in this realm. If I asked you to name the most successful open source companies (Companies that derive the majority of their income from open source software), which ones would you name? Red Hat? Novell? MySQL? Canoncial? Those are all great answers. These three are perhaps the best known and most successful of all the companies that derive their incomes from open source software. Now, what if I asked you to name the most successful software companies in the world--closed or open source? Would your answers change? Yes, unfortunately, they would. In fact, the ten most successful software companies in the world are closed source ones.

I know that "success" is a relative term but I'm talking about success as measured in revenue dollars, stock prices and number of customers. You won't find one open source company among them.

Here are the ten in alphabetical order:

1. Adobe - Just about everyone who has a computer has used an Adobe product by choice or by need. The ubiquitous PDF (Portable Document Format) uses the Adobe Reader to do its presentation. Adobe features other development software such as the old Macromedia lineup and coldfusion.

2. Apple - Apple, the seductress of the computing world, is one of the most successful software and hardware companies and it's all closed source--always has--always will. You can count on Apple to bring you innovation, clever design and products that people want all at a price that many are willing to pay.

3. Autodesk - Purveyors of AutoCAD have long since held the belief that their CAD product is the best on the planet. They must be correct because they have >90% of the CAD software market in their hip pocket and have for the last 20 years. Closed source hasn't hurt their business.

4. IBM - IBM is a huge open source benefactor but it's also one of the largest cloud source software vendors. From the wonderful OS/2 operating system to their AS400 all the way up to their z/OS, you'll not find one shred of open source. Their Tivoli line? Closed source. Lotus? Yep. Closed. In spite of their many closed sources, check out their earnings and liquidity.

5. Intuit - I use QuickBooks. You probably do too or know someone who does. There's no Linux version. There's no source available--legally. There's no company more successful with their small business accounting products. In fact, name another company in that field if you can.

6. Microsoft - The Dark Side of software. Or so open source advocates, like me, would have you believe. Yes, there have been some business practice questions raised in the past, but Microsoft is the largest, most successful software company in history. Like it or not, Microsoft owns the Desktop and the lion's share of applications that run on it. Games, office products, accounting, server software and operating systems reach into almost every home and business in the world. Having closed source products has hurt their reputation among bloggers and free software lovers but it hasn't affected their bottom line. Keep spreading that anti-Microsoft propaganda, like I do, and it still won't matter to them.

7. Oracle - Yes, I realize that I just wrote, "20 Reasons Why Oracle is the World's Largest Open Source Company," and Oracle has done an immense amount of work in open source but their revenue mainstays? Do I need to say it? Closed source. Successful? Oh, yes. Oracle has the majority of enterprise market share for their unbeatable database products.

8. SAP - If you look into any large company, you'll see SAP products. And that's anywhere in the world. Their CRM (Customer Relationship Management) and ERP (Enterprise Resource Planning) products are the Gold standard for business. Sure they allow people to create APIs and other connectivity software but the main products are all closed source.

9. Symantec - Norton, BackupExec, Ghost and Antivirus. Closed source. Success. Simply Symantec. Few products match the quality and success of Symantec's and they've been around a long time. To this day, I've never found a better product than Ghost for cloning machines (P2P). I wish they'd come out with a P2V, V2V and V2P products for virtual machines. So far I haven't seen any others that I'd own.

10. VMware - Speaking of virtual machines. This closed source software company has made zillions of dollars with their top-rated, enterprise virtualization products. They enjoy a >90% market share of the virtualization space and all the free products in the world can't seem to change that. Why is that? Quality. Expertise. Support. Reliability. Sure there are open source products that have all those too and at a tenth, or less, of the cost. So what is it about VMware that makes it so successful? Innovation. They are the best. Closed sources and all.

So, what's the lesson here? Do you have to create a closed source software product for it to be successful? No. But it helps. There are those open source exceptions and perhaps their numbers will increase over time but the odds are in favor of closed source software.

I didn't say that I like it. I'm just the messenger.

What do you think? If you were to start a new software company today, would you start an open source or closed source one?

It depends on what my motivations would be. If making money were the only objective, closed source would work better. However, all of those firms you listed owe their success to open information and standards somewhere along the way.
Adobe would be nowhere if not for Microsoft. Microsoft would not be anywhere if not for IBM. The personal computer industry would be nowhere if not for the open architecture that IBM introduced with it original IBM personal computer.
Where di all of IBM's computer information come from? Was it home brew?
People and companies are just learning to make money with open source software. They have a tough uphill battle because the patent system has become a barrier rather than an hancer to innovation in the software world.

Glenn

[gregzeng]

Very USA centric. Success is not just mentioning Darth Vader of this planet: M$. Darth Vader is infamous for immoral, illegal and unethical crimes on nearly every continent on this planet, fined many millions or billions of dollars. So it is to be be expected that planetary terrorists attacked the universally hated Darth Vaders of this planet.

Greg Zeng, Australian Capital Territory.

If we measure success by market share, not by criminal, illegal, immoral, unethical behaviours, then Nokia, AN OPEN-SOURCE COMPANY (SYMBIAN operating system) would be number one:

1) Biggest digital camera seller on the planet, ever.
2) Most popular brand name mobile phone brand on the planet

BTW: read my personal details here or google: "gregzeng". I have never had any commercial manufacturer, distributor nor advertiser of hardware or software.

[kimgr]

I agree with every word that gregzeng said.

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