The Cathedral and the Bizarre

Good post here. It's thesis: that in the near future the software industry will look a lot like the energy business does today with its regulated and unregulated business; where regulated business is open source and its predictable steady stream of income and where unregulated business is analog to highly vertical, niche software products that are closed, closely guarded and expensive.

Interestingly, the software industry as we know it grew up with unregulated businesses - and only in the last decade has open source created these credible alternatives. I think the future looks similar to the energy industry: large technology companies will have a mix of regulated and unregulated businesses, that maximizes the advantages of both. For standard, widely-used technologies, open source "regulation" makes sense because it lowers development costs and provides a standards-based, predictable subscription base of business. For niche and high-end software, companies will still expect a substantial return on their development cost, and therefore will protect that IP and sell it at a premium until competition makes that impossible. The most successful of these integrated companies will be careful not to exploit the community, and will be respected for having transparency between what parts of their business are "regulated", and which parts aren't.

I certainly see this as the future of Microsoft which is unlikely to go completely open any time soon.