Using Open Source to create monopolies

Posted on December 6, 2007 Updated on December 6, 2007

Having seen open source from close quarters and a long enough time, I am beginning to believe that monopolies [or near monopolies] do exist in the open source world also and the business complexities, rules, strategies similar to the ‘other world’ are prevalent & relevant here. In fact a lot of smart people, organizations, communities have realized this aspect of open source and are quietly moving ahead — making full use of open source to create monopolies while many people are still debating the moral, legal, aspects.

Open Source promotes competition and diversity.

Yes, it does promote and provide opportunity for diversity & competition. But only in some areas areas, products and not in all areas. The ‘fundamental’ building blocks for the success of an open source [or a proprietary one] remain similar if not same.

Let’s take the classic example of ‘http’ server — Apache. Is it a monopoly? How many other open source http servers are out there that are popular and adopted by the world? hardly any..

For an open source product, the community that it is able to create for itself and leverage gives it the muscle power to ‘consciously or unconsciously’ create a monopoly. The larger the community, the larger the adoption, and hence the larger is the barrier to entry for other open source solutions.

However; it is true that open source does cause disruption within open source monopolies itself. for example: STRUTS was the de-facto framework for java based web development and had a near monopoly. other frameworks never stood a chance. Then comes spring and creates a whole new paradigm. So now it is spring that is on the verge of creating a monopoly. Then we have jBoss app server as an example. It is the defacto monopoly in the java middleware market.. It’s amazing that how jBoss has used the power of the community to effectively build a monopoly. Then think of eclipse.. the whole ecosystem it has been able to create around eclipse is amazing..

I think that in areas that are fundamentally ‘protocol/standards based’, open source products, solutions, frameworks is a sure shot way to create a monopoly and in areas where the differentiator is based on features, implementation etc, there will always be several open source products competing in the marketplace — competing for adoption, competing for building a community etc.

I think the smart companies will soon realize this and use open source for their business advantage to create huge barriers of entry, and near monopolies. The challenge is that it the fundamental requirement in this equation is to create a vibrant, robust and engaged community around the open source product. While commercial organizations are expert in creating brands/marketing etc, creating communities is not something that comes naturally to them. The key to success would lie there in my opinion..Maybe time for a CCN [Chief Community Nurturer] role within organizations..

A Disclaimer: I am a huge believer in open source and have been involved in this world for more than 10 years.