Maybe there is such a thing as a free lunch, after all. Suddenly, people have stopped laughing about free software - and started using it.
An increasing number of companies are starting to think of the so-called Open Source model not as freak by-product of the Internet revolution, but as a valid business model. So when Netscape announced in January that it would freely publish the source code of the Communicator 5 browser, this was not the desperate measure some critics made it out to be. Netscape merely decided to tap into a business model whose day, according to many, may have come.
In 1995, Brian Behlendorf was working simultaneously at Hot Wired and at Organic Online, where he was developing Web sites. He was using what was then the most popular Web server software around: the free HTTP Daemon developed at the National Center for Supercomputing Applications (NCSA). To make the software do exactly what he needed it to do, Behlendorf, like many other Web masters, had enhanced and added to the code. But then, many people at NCSA got hired away by Netscape, which was about to launch its own, commercial Web server. Suddenly, the future of the NCSA Web server was threatened.
So Behlendorf and a handful of other Web masters decided to take matters into their own hands. "We just wanted to make sure that the product which we had invested so much work in, was going to be around", he explains. So they added together all their additions and fixes (of 'patches') to the NSCA Web server, and ended up with 'a patchy server' - Apache. In February, the Apache Group was founded. By April, the first public release of the Apache Web Server was out.
Today, according to data from Netcraft, 46 per cent of all Web servers are based on Apache - more than Microsoft IIS and Netscape combined. "We never expected it to become this big," admits Behlendorf.
But this is not a freak phenomenon. Another free software product is making inroads into a market controlled by commercial vendors. It is Linux, a Unix-like operating system originally written by a student named Linus Thorvalds.
Linux, according to some sources, today has more than five million users. IDC analyst Dan Kusnetzky says it is difficult to tell, but he estimates there are at the very least two million Linux clients and 200,000 servers out there. He believes the total number of Linux users is between two and six million. "This would put them somewhere between OS/2 and Mac OS in popularity," says Kusnetzky. "But nowhere near Windows 95 or Windows NT."
Some high profile users have added to the buzz around the free operating system. Digital Domain did the special effects for the $200 billion blockbuster movie Titanic on Alpha boxes running Linux. And NASA is using a Linux-based supercomputer built out of off-the-shelf Intel components.
The stunning success of Apache and Linux proves that free software is not just about penniless students and geeks in basements anymore. Increasingly, free software is being developed - and used - by top IT professionals who are in this for solid business reasons.
Brian Behlendorf himself is proof of this. "I'm involved because, here at Organic Online, we do a lot of Web site development for large companies. We have always needed software that allows us fine grained control." Most of his work on the Apache source code is done during office hours, paid for by Organic Online.
He is not alone. "The people now working on Apache are typically maintaining very large, mission critical Web sites. Or they are people working for companies that write Web software," he claims.
Free Unix source code has been around for decades. Universities and research institutes took existing, free source code, did their own additions, and offered these back to the community via their FTP server. What is relatively new, is that people are now making money out of free software.
There is a common misunderstanding about free software. And that is that you don't pay for it. As the Web site of the Free Software Foundation (http://www.fsf.org) puts it: "'Free software' is a matter of liberty, not price. To understand the concept, you should think of `free speech', not `free beer'."
This is one reason why, increasingly, the model is referred to as the 'Open Source' model. Which means that anyone can have access to the source code, can modify it and distribute it. This as opposed to virtually all commercial software, of which the purchaser only ever receives a compiled, binary version.
Very often, 'free' software comes with a licence agreement referred to as the GNU General Public License, also sometimes known as 'copyleft'. This agreement gives anyone the right to access the source code, to distribute it and to modify it. The General Public License also explicitly allows anyone to sell a product based on the free code. But whoever wishes to distribute a modified version of the code, must also make this modified source code freely available, thus adding to the base of freely available source code.
Consequently, there is nothing self contradictory in the fact that a growing number of companies are making money selling 'free' software. These companies include Red Hat Software in North Carolina and Caldera in Utah, who both sell and support versions of Linux, and a number of companies that commercialise versions of Apache.
Bob Young, president of Red Hat Software, is one of the increasing number of people who are making a business out of free software. His company has barely 20 developers and is, Bob Young says, "largely self-funded".
"It was 1993, 1994", Bob Young recalls. "I was running a small software business. I was selling commercial versions of Unix for PC. Meanwhile, my customers were talking about Linux. I started hearing about these people writing code in their basement."
"There was no doubt in my mind that this couldn't possibly carry on", Bob Young remembers. "There had to be an economic motivation to do something. And yet, every six months the number of my sales based on Linux products, Linux tools, Linux books became a bigger part of my business."
And so he started Red Hat Software, packaging, reselling and supporting Linux. "All the venture capital people thought we were nuts", he says. "The whole commercial software model is based on having something that no one else has access to."
Behlendorf said he doesn't mind commercial companies making a living out of his and other volunteers' work. "So long as these companies are also contributing to the free version, that's fine", he said.
And that mixture of idealism and business sense appears to be what allows this new business model to develop. Hobbyists, students, researchers and paid employees at commercial companies all work together in virtual development teams, communicating by Internet news groups and mail lists.
This works, because products such as Linux are highly modular. Each virtual development team works on a part of the product. The leader of the team is always a person who has earned his reputation by producing good, clean code. Bob Young: "There is a very clear structure to this model. It is based entirely on merit."
Dan Kusnetzky of IDC calls it an "interesting" business model. But, he warns: "The question has to be asked whether these people are making any money on this. It remains to be seen whether, in the long term, this is commercially viable." But if it is, Kusnetzky expects other companies will try to get a piece of the action.
Martin Marshall, an industry analyst with Zona Research in Redwood City, CA, is more sceptical. He does think other commercial companies might try to tap into the idea by giving away the source code to some small product. But he compares this to a bakery that gives away free slices of muffin: "The point is to make you buy the bigger product".
Who is using free - or Open Source - software? It used to be just universities and research institutes. As well as a small number of companies who depended on highly specialised, highly customised computing solutions. But that appears to be changing.
IDC analyst Dan Kusnetzky says enterprises never used to even consider using free software. "Now, I'm starting to get questions about Linux and NetBSD", he recounts.
One of the reasons companies are turning Linux, thinks Bob Young, is because so many IT students use the freely available operating system. "All these kids are graduating now", he remarks.
Kusnetzky suggests another motive: the growing backlash against Microsoft and its control of the software market. "Some companies are saying they don't want all their eggs in one basket. So a lot of what is happening is people going out looking for other baskets."
But there is more to it, he concedes. "Computers have become very fast and very cheap. And so, people are thinking of new things to do with them, things that have never been done." Building on freely available source code allows companies to do this, without having to write a complete operating system from scratch.
Young is thinking along the same lines. "The primary advantage of Linux," he says, "the one that all users appreciate and that they don't get from 'binary-only' OSs, is that Linux gives them real control over their computing environment.
He adds: "When you need to look at the source code, you can. If you run into a bug, an anomaly, and it turns out that it affects only you or a small number of users, then its not going to have a very high priority at Microsoft to get it fixed. But if there is freely available source code, you can go in and fix it. Or you can hire someone to fix it."
But Kusnetzky points out that many companies do not need or want this type of control. "Working with free software could turn out to be very expensive," he warns.
Kusnetzky says free software addresses a "specialised clientele". "Free software isn't necessarily attractive to people for whom computers is not their main business", he believes.
He also warns about hidden costs. "Just looking at the price of the software is an incomplete view. You have to calculate in the price you will have to pay for support." According to Kusnetzky, when calculating cost of ownership for a five-year period, the purchase price of software typically is less than half of the total cost. "What I urge people to do is to consider carefully the support structure", he says.
Up to now, the companies making a business out of Open Source software have been small start-ups. But on 31 March, Netscape will join them, when it publishes on the Web the source code of its next-generation browser, Communicator 5.
Jim Hamerly, vice president of client products at Netscape, and the man who is driving the company in this new direction, makes no secret of where he got his inspiration. "We spent a lot of time looking at the free software industry, and at the allied commercial companies that have sprung up around it", he recounts.
Hamerly hopes that, in the same way, new commercial companies will spring up around the free Communicator source code, enhancing it and adding to its market presence. If that happens, Hamerly says his division will be "only one, though initially certainly the largest, of the contributors to the free source code".
Hamerly sees it as an extension of what Netscape has always done: "We are moving from an open commercial model to an open free model," he said. But he agrees the path is full of uncertainties. He doesn't know exactly how - or if - the model will work for a large, high profile software company like Netscape. "We're entering a brave new world where we will figure things out as we go along," he says.
Kusnetzky of IDC says he doubts whether the model will fit companies that are already entrenched in the commercial software business. He expects that mainly new companies, without prior investments, will be able to cash in on the Open Source model. But he concedes that Netscape has always been close to this model in a number of ways. Its first browser was given away for free to many users, and it was based on the free NCSA Mosaic browser.
Bob Young, for one, thinks they have a chance. "To go after Microsoft, you have to go after another model", he said. "That's a big chunk of why Netscape has adopted this model."
Says Hamerly: "I think we are writing the next chapter in how software is developed."
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