Open Source Companies: Bet on Expandability and Extendibility

October 12, 2023

Note: This essay is the work of a real and still-alive dinobaby. No smart software involved, just a dumb humanoid.

Naturally, a key factor driving adoption of open source software is a need to save money. However, argues Lago co-founder Anh-Tho Chuong, “Open Source Does Not Win by Being Cheaper” than the competition. Not just that, anyway. She writes:

“What we’ve learned is that open-source tools can’t rely on being an open-source alternative to an already successful business. A developer can’t just imitate a product, tag on an MIT license, and call it a day. As awesome as open source is, in a vacuum, it’s not enough to succeed. … [Open-source companies] either need a concrete reason for why they are open source or have to surpass their competitors.”

One caveat: Chuong notes she is speaking of businesses like hers, not sponsored community projects like React, TypeORM, or VSCode. Outfits that need to turn a profit to succeed must offer more than savings to distinguish themselves, she insists. The post notes two specific problems open-source developers should aim to solve: transparency and extensibility. It is important to many companies to know just how their vendors are handling their data (and that of their clients). With closed software one just has to trust information is secure. The transparency of open-source code allows one verify that it is. The extensibility advantage comes from the passion of community developers for plugins, which are often merged into the open-source main branch. It can be difficult for closed-source engineering teams to compete with the resulting extendibility.

See the write-up for examples of both advantages from the likes of MongoDB, PostHog, and Minio. Chuong concludes:

“Both of the above issues contribute to commercial open-source being a better product in the long run. But by tapping the community for feedback and help, open-source projects can also accelerate past closed-source solutions. … Open-source projects—not just commercial open source—have served as a critical driver for the improvement of products for decades. However, some software is going to remain closed source. It’s just the nature of first-mover advantage. But when transparency and extensibility are an issue, an open-source successor becomes a real threat.”

Cynthia Murrell, October 12, 2023

Written by Stephen E. Arnold · Filed Under Business strategy, News, Open source

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Stephen E. Arnold monitors search, content processing, text mining and related topics from his high-tech nerve center in rural Kentucky. He tries to winnow the goose feathers from the giblets. He works with colleagues worldwide to make this Web log useful to those who want to go "beyond search". Contact him at sa [at] arnoldit.com. His Web site with additional information about search is arnoldit.com.