Yet another Open Source Company: false positive are dangerous

Andrew Aitken from the Olliance Group, a consulting firm helping customers to get advantage of the strategic,technological and financial benefits of open source software. wrote an interesting comment replying to an insightful post stating “Selling open source just keeps getting easier“.

Aitken while agreeing with Matt Asay’s assessment of the revenue ramp of open source companies, shows that it’s becoming easier to make money faster open sourcing. He also expressed some concerns about the future:

[..] having completed over 100 strategy engagements in the open source space to date we can attest to the fact that it is definitely becoming easier to achieve a rapid revenue growth rate. Our concern comes from the fact that with all the numerous proprietary companies open sourcing something, no matter how small or insignificant, in order to call themselves an open source company, (almost one per day for the two months we tracked this in mid-2006) the market is going to become confused and could potentially feel misled. Resulting in skepticism of a different kind, not about open source technologies per se, but about the business entities themselves, potentially slowing commercial open source sales. Additionally, there will be the failure of a number of open source companies over the next couple of years, the inevitable result of over funding of particular industry segment or technology. Will this be trumpeted by the anti-open source folks as proof of unsupportable business and technology models or simply the natural result of too much money supporting to few good ideas and poor management teams.

Uncertainty never helps the market, and if Aitken’s perception is right we should find a more effective mechanism than the community, I guess.

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