What is the rate of depreciation of software, or in other terms, "when does the value of a piece of code become approximately zero?". The second aspect to this is how much of the license fee for a new version is for code that has reached this $0 value.

Why I think this is important is the issue of what is "free" and what is "for fee"..

Surely the majority of the code is untouched for a number of releases, and therefore should have a approximated value of $0. Should you continue to pay for this code, or should you be paying for enhanced code or new functions/features.

This type of model is trying to define open source development in terms of a cost+ model.

So it seems to me that giving away this commoditized code is a reasonable step.

So what does this mean for open source business models;

If you believe all software should be free (as in speech), then this logic will never work. But then again nothing will that involves money.

This supports the "for fee" basis of new and innovative components.

It would not make sense for a completely new innovation to opensource from the beginning, unless you cost of development of the core project would be less than the marketing required to get adoption.

Supports individual developers and other associated parties getting paid for developing features (ie. everybody deserves to get paid for their work).

Does not limit "for fee" to deployment & growth aspects as mentioned in Simon Phipps blog, but all new features and functions.

Supports the move to a single or small number (because competition is good to keep the core code improving) of core pieces of code for a given function (eg. how many OS kernels, RDBMS cores etc.. do you need)

Puts more focus on the open source community as consumers of core code and not contributors (which seems to be a common concensus, because contributors are a small percentage and often vendor funded)

There is no doubt that the core code should also be improved over time, but this can be funded through support and other annuity means. If a community is unable to keep it refreshed, then the typical threat of forking always exists.

$0.02

B

If you were to consider two adjectives that most define Red-shift it would be easy to select "Growth" and "Innovation". Growth is the fundamental descriptor for the premise of being "under served" by Moore's Law. I would propose Innovation is the primary driver of Growth. The reason for this is the type of Growth needed to be a "Red=shift" workload cannot be created by incremental improvement on existing products/services.

So Innovation is the fire that is powering the Red-shift. So what is stoking the fire!

Lets take and short detour and catalog the key characteristics of the Open Source Software (OSS) movement. We can quickly identify;

low barrier to entry/exit (cost, legal obligation)

transperancy of governance (roadmaps, testing, development process)

unrivaled access to resource (quantity, quality, motivated)

The result is the OSS movement has put an exponential amount of features and functionality in the hands of a wider and more diverse group (eg. globally, industry, background, market) of entrepeneurs. So you can picture the combustible material resulting from the reaction of combining the ideas of this large group of people with the expanded ability to execute through software. Important to note that OSS is not only the tools to execute, it is a reactive agent. People need raw material to create ideas, which is most often a combination of information and personal experience. The OSS community not only feeds from these ideas but is a significant contributor by putting in features that are executed in unique ways.

So the spark of Innovation is created by mixing the features/functions with wealth of ideas. But what is sustaining the fire ?

The answer might exist by looking at the first wave of "Red shifted" demand. The Internet boom provided access to a completely new route to market for service. As described above, the same scenario existed to connect ideas to execution. The two barriers to execution at the time were technical capability and access to physical infrastructure.

It is true the foundation of the Internet was HTML, but to build something functional and architecturally significant, you needed to speak the languages of Java, PHP and SQL etc... So unlike this generation, the "Red Shift" was dampened by the fact that execution required the use of traditional developer tools and knowledge of programing. As a result, the education system created a combustible natural resource of developers and university graduates with a higher level of technical competence and knowledge of the "new economy". A material that has laid dormant during the infamous .COM "bust".

The deployment barrier of infrastructure was also lowered by the first .COM boom. New meanings were created for the words "Start up", "Going public" and the general public started to learn about the business of private and public investment. This wealth of money was driven into an unprecedented investment in the Internet and the infrastructure that supports it. The new-economy drove Moore's Law for many years and resulted in commoditizing access to processing infrastructure. The top line trend was an initial huge browth in processing capability (CPU, storage density, network bandwidth) during the boom, then with the bust, a large reduction in cost.

So courtesy of the first boom, the barrier for execution of processing infrastructure is small.

The final note is the OSS movement is not just delivering end user features/functionality. A natural trend in all forms of technology is to constantly improve usability so to address the broadest segment of the target market. OSS is no different, the trend is reducing the barrier for execution by making the software that allows you to realized the "ideas" easier to use.

So we can conclude, there is loads of combustible material in the form of developers and MBA's with the knowledge and creativity and a wealth of infrastructure capable of carrying innovation through the critical concept and market entry stages (high cost, low revenue). The OSS movement has created the spark to ignite this material with an unequaled frequency and ferocity. So OSS is fueling the fire of Innovation which is powering the engine of Growth that drives the "Red Shift" :)

Footnote: Couldn't it be said that bandwidth, data storage or CPU is "Powering the Red=shift". Its true enough that they all play a role, but it is the application stack that sits on top of the IT Value Chain and most often directly connected to the driving source of innovation, PEOPLE!!

I have always been interested in the old addage that "the best solution is not always the most successful". This is always represented by some of the biggest battles for consumer success;

VHS vs Beta

Windows vs MacOS

Mainframe vs Open Systems

Linux vs UNIX

CDMA vs GSM

NeoGeo vs NES

NES vs Playstation

Playstation vs Xbox

Laserdisk vs CD/DVD

DVD+R vs DVD-R

DVD vs. BlueRay

Wordstar vs Word Perfect

Word vs Word Perfect

the list is endless (as is the garage of most people with outdated tech)

In recent times the emergence of Linux, opensource movement and concept of the "participation age" has made me think; Is success defined by people or product? Is ultimate success defined by how you deal with the people or the product? How will OSS develop over the coming years? What are the tipping points?

Now I have done my post-grad business studies and have read enough books to know most of this concept is not unique thought, but its a critical thought process as I apply the learnings to Open Source. The application to OSS may very well be unique.

If you are a believer in the world of economics and the concept that markets shift to achieve efficiency in the absence of regulation etc.. A highly diplomatic person would vehemently argue that you need to deal with both.. Well, its my blog so I get to state my opinion and that is "People" wins over "Product".

Now the cynics would say "Thanks for stating the obvious!!", and there is truth there. But what can we learn from these various use cases. Can we create a catalog of drivers to stick in the model that be used as strategies when trying to enter the market with a new product, or even trying to get a project approved within the enterprise.

So Windows vs. Mac vs. Linux is the classic long running battle for the desktop which has existed for at least the last 20 years. I doubt that there are many people that would debate too strong that the technology design and execution of the Mac is superior to Windows or Linux across the complete range of consumer user requirements (Windows and Linux do have unique areas of strength). People would also recognize that Apple addresses the needs of the people in both the product and the marketing/advertising/sales etc.. So why does windows continue to dominate ?

Some ideas;
1. Market entry - whether first or second, the dominant player enters the market at a good time and establishes rapid growth. Apple was blazing the path to the individual whereas MS rode the wave to the business.
2. Killer apps - the product/company addresses a specific function or need that was lacking in the incumbent or completely absent in the market. Apple really focussed on the individual, but the market was for the business $$. MS hit the people aspect at a business level.
3. Business model - a good business model can protect a company from having the "best" product or addressing all the people's needs.

So what about the long run ?

There is a natural tension however between the forces that protect a product that does not meet the needs of the people. Eventually balance will be restored. Either MS moves the product into a position to relieve this tension or the competitors will ride the wave of discontent and pounce.

$0.02

So ITIL V3 has finally been launched;. After a number of years constination and debate over what direction it should take, they finally reached agreement or gave up trying to get it and just moved forward. The big changes that are obvious at first glance are;

1) More focus on business integration

2) A lifecycle approach;(meaning continuous improvement amongst other things, but unfortunately to ITIL the focus is on inception)

On the surface, these are good changes. In fact I have been working in my current role for at least 5 years and have always promoted as the ideal way to adopt service management. Time will tell once we read a digest the books and try and apply the added concepts, whether the execution is good.

The big down side is they changed the structure of the documentation, which from what I can tell means V3 is now a complete upgrade to V2 and very little of the existing material is portable. So the industry that has built itself up around the brand of ITIL has a huge amount of potential revenue in training, individual certification and consulting. Its not a incremental addition, its a complete upgrade (cold install perhaps). There is some talk of how to bridge to the V3 certification (in place install if you may); but nothing is confirmed.

As I read the launch material and browse through the book summaries, I wonder if the concept of a service management "best practice" framework is a good open source project. It seems the current books have one or two authors each, whose experience might be somewhat limited in geographical, industry and market exposure. I understand through the itSMF there is a community of knowledge behind these authors, but the formalized structure and the structured release cycle will always limit this level of consultation.

I have always found that every minute I spend not working in this area the process of losing connection with the needs of companies begins. This formalized structure requires professional content contributors who are unable to spend this time in front of the customer. The area of service management is a continually maturing set of process and the development cycle of a centralized organization is perhaps not going to meet the needs of the community. In reality this is essentially the reason why all open source or "participation" events occur. The voice of the majority finds a way to express itself when there is a real or percieved disconnection from between the masters and the population (participation event, opensource, revolution, social unrest are all the same :)