Ben Thompson stratechery.com

The economic realities of open source  ↦

Ben Thompson, one of the voices behind Exponent and writer at Stratechery, covered the economic realities of open source from a lens of the music industry. More specifically, Ben talked about how the music industry’s revenue, medium, and distribution relates to that of open source in today’s world where AWS, Microsoft or Google are able to make money off of open source like MongoDB and Redis without having to share any of that money with the developers of the open source.

He describes this conundrum for open source companies:

  • MongoDB leveraged open source to gain mindshare.
  • MongoDB Inc. built a successful company selling additional tools for enterprises to run MongoDB.
  • More and more enterprises don’t want to run their own software: they want to hire AWS (or Microsoft or Google) to run it for them, because they value performance, scalability, and availability.

This leaves MongoDB Inc. not unlike the record companies after the advent of downloads: what they sold was not software but rather the tools that made that software usable, but those tools are increasingly obsolete as computing moves to the cloud.


Discussion

Sign in or Join to comment or subscribe

Jerod Santo

Jerod Santo

Omaha, Nebraska

Jerod co-hosts The Changelog, crashes JS Party, and takes out the trash (his old code) once in awhile.

2019-01-15T14:28:35Z ago

I read this last night and earmarked it to log this morning. Ben’s analysis is almost always on point and it was fascinating to see him point his lens at the OSS world. I found this quote particularly interesting in light of our recent show with Joseph Jacks of OSS Capital:

This tradeoff is inescapable, and it is fair to wonder if the golden age of VC-funded open source companies will start to fade (although not open source generally). The monetization model depends on the friction of on-premise software; once cloud computing is dominant, the economic model is much more challenging.

0:00 / 0:00