Traditional wisdom: Open source was about license. Open source means OSD-compliant licenses.

Paradigm shift. Thomas Kuhn: The structure of scientific revolution. All rules are different. Big change.

PC Paradigm shift (hardware). 1981-1982. Commodity hardware with open infrastructure. IBM released standard for IBM PC to beat Apple.

Low cost cost and pure play commodity hardware business models beat proprietary add-ons. Dell beats IBM and Compaq.

Companies that stayed in the old paradigm died. Digital, Data General and Prime

The PC Paradigm Shift (Software). Software decoupled from hardware. Lock-in move from hardware to software.

Paradigm failure at work. You all use Linux everyday because you all use google everyday. Question: There is no user-friendly applications based on Linux. Wrong answer: Yes, Gnome, OpenOffice etc. The right answer: We have Google, Amazon, eBay etc.

The Internet application platform. LAMB (Linux, Apache, MySGL, PHP) is backend. Frontend is a platform agnostic desktop browser.

Another paradigm failure. Most interesting software applications used today with GPL software is not distributed as software normally is distributed. So the GPL does not apply. Licenses triggered by binary transfer have no effect.

The value in these application lie in the data and thier customer interaction more than their software.

Licensing. GPL was not to do something new but to do something old. GPL was increasingly to become a barrier to innovation. The Apache and BSD liocense are more friendly to innovation.

“An innovation has to make sense in the world where it is finished not where it is started”, Ray Kurtzweil.

The Internet paradigm shift. Commodity software with an open architecture. Infoware – eBay, MapQuest, Amazon – is decoupled from both hardware and software.

Competitive advantage moves up from the stack of software to the service above the level of a single device.

Value is based on the data and customer relationship not on propriety software.

Intel is still inside, but so is Cisco. There is plenty of room both at the bottom and at the top of the stack.

Network-enabled collaboration. Collaboration not licensing is the mother of open source.

The adhocracy of like minded developers that can find each other and work in ever shifting groups.

Power shifts from companies to individuals. Everybody is a free agent. Linux moves with Linus Thorvalds from job to job.

Much more open source software than Linux: The commercial Internet. Rick Adams: UUCP, Usenet News, SLIP. Paul Vixie: DNS and Bind. Sendmail and e-mail routing. WWW is not just open source but in the public domain. Apache now has 67 % of the market.

The architecture of open source. O’Reilly started CollabNet to commoditize the Apache development process. Used by big companies inside the corporate firewall.

Building on top of open source, Yahoo! pays people to build their directories. Learning from open source, DMOZ/Open directory and Wikipedia use volunteers. Napster/Kazaa users build song swapping network as byproduct of their own self-interest (“Scratching their own itch”).

Open source behavior emerges in large enough development organizations such as Microsoft like ASP.net.

More people have “contributed” to Amazon than to Linux. eBay’s has a natural monopoly. Google uses peoples’ page-ranking.

Business model thoughts for commodity software. Engineering reliable systems from independently developed competent may be THE key open source business competency.