Software

Open-Source Software: From The Periphery Of Tech To The Mainstream Of Finance

Image result for Open-Source Software: From The Periphery Of Tech To The Mainstream Of FinanceFor the typical technology prosumer, the idea of open-source, free-to-use software is wholly uncontroversial. Hundreds of millions of people worldwide variously use Linux and Android operating systems on their personal computers and smartphones, browse the web with Mozilla Firefox or analyse ‘big data’ with Hadoop.

For the multitude of technology companies whose business models are based on developing and selling proprietary software, the role of open-source software that can be freely accessed, modified and shared is less readily apparent. In fact, the two approaches seem so diametrically opposed that each could be viewed as an existential threat to the other.

Yet there has been a conspicuous rapprochement between the two camps in recent years, enabled in part by the evolution of the ‘commercial open-source’ business model. This centres around the provision of value-added services – such as training, customisation, support or warranties – to corporate users of open-source software. Unlike individual consumers, these companies are frequently willing to pay subscription fees to enhance the product, limit downtime or fix bugs.

Consequently, companies that were previously exclusively associated with closed-source software models have been looking to both demonstrate their commitment to the open-source ecosystem and establish a leading position within it. Strategic acquisitions have been their tactic of choice, on both counts.

This is not necessarily a new phenomenon – Google’s acquisition of Android took place back in 2005. Nor is it something with which all members of the open-source developer community are completely comfortable, having become accustomed to operating outside of corporate frameworks since the launch of the Open Source Initiative in 1998. (While companies such as Google, IBM and Adobe do regularly contribute resources to open-source development projects, the success of these projects ultimately relies on professional software developers participating in their own time.)

Nonetheless, Microsoft’s announcement of its agreement to acquire GitHub, the world’s leading collaborative software development platform, for $7.5bn in June this year represented a landmark moment in the evolving relationship between the established tech giants and the open-source community, and one that has been decades in the making.

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