MBAs Being Taught To Fight Open Source By Offering Closed Source Alternatives?

from the get-a-refund dept

The Slashdot crowd is reasonably up in arms of a paper jointly written by a Harvard Business School professor and a Stanford Graduate School of Business professor on ways to compete with open source competitors. Amusingly, nowhere in the paper does it suggest that one of those strategies might be to go open source yourself, embracing the actual benefits of openness and infinite goods, and focusing on better business models involving scarce goods. In fact, it doesn’t even seem like the paper recognizes the rather large businesses created around open source software, with the totally false implication being that open source isn’t a business, but a hobby. Frankly, the whole thing gives MBAs a bad name, by suggesting that they’re not being taught to actually understand how open source can be used within a business model. That’s unfortunate, because it’s simply not true — at least at some schools. Much of my own journey down the path in exploring the economics of infinite goods started thanks to my own MBA professor Alan McAdams at Cornell, who was teaching how important open source models were to the success of the internet and businesses back when I first took his class in 1996 or 1997.

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Comments on “MBAs Being Taught To Fight Open Source By Offering Closed Source Alternatives?”

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25 Comments
Shohat says:

Woooooshhh goes the point

The paper doesn’t say the Open Source is good or bad, but it’s competing with closed source software.
A person might mend up in a management position in a company that has a certain business model, and has to deal and compete with Open Source companies.
Just like a person might end up working at Coca Cola, and competing with healthy juice products for instance. That is his job. His job is not to convince everyone that Cola is bad, and switch to juice because there are so many opportunities in that market. A person is hired to do a job, and sometimes that job is to compete with Open Source. Not to think up new company strategies, but to compete in a certain market with a certain product.
That paper helps those people.

jonnyq says:

Re: Woooooshhh goes the point

Coca Cola exactly does compete with healthy juice products by actually providing healthy juice products themselves and by offering diet versions of sugared colas. That’s actually a good example of how it is indeed managements job to suggest that the company embrace the competitor’s business model.

Coca Cola also competes by actually purchasing the competing company and continuing that company’s business on their own books. This has happened in the open source community as well.

Anonymous Coward says:

My head! My head! YIKES MY HEAD!

Further expanding on the spirit of Shohat, I have met many, many people with MBAs that air just seems to woooooosh through their head. I won’t name any names, but let’s just say that you’d be embarrassed to claim them as American employees. It’s downright scary! Then they have the gaul to put “MBA” behind their name on their business card like it’s some sort of entitlement. Yikes!

Of course, I’m not speaking of you, Mike. You get it. Oh man, you get it. But these other guys.. How the heck do they think.. Sorry, I need to stop or else I am going to force myself to have a cerebral aneurysm.

Duane says:

Missing the point

Actually most people are not hired to “not drastically change company R&D & product lines or to achieve the desired goals with a predefined ideology and a limited amount of resources.”

Most people are hired to accomplish desired goals, period. They might find that some of the roadblocks to accomplishing said goals are predefined ideology and limited amount of resources, but generally speaking you hire someone new to change the way you do things, to provide a fresh perspective, introduce new DNA, etc.

Sure that might not be what happens in the end, but no one ever gets hired to just keep doing the same thing.

That being said, open source might not be practical for some enterprises, but it should be considered even if only to impress your bosses with how you’re “thinking outside the box” and trying to “change the paradigm.”

Not fully educating young MBAs on the possibilities and pitfalls of Open Source is a real disservice to all of us.

norman619 (profile) says:

Opensource good?

Advocates of opensource applications always seem to ignore why the commercial alternatives to opensource are usually chosen instead. I handled the purchasing for my company’s IT needs. We often looked at opensource applications and compared them to the commercial offerings. Almost w/o fail the commercial offering was more robust and had much better customer support. When you are responsible for the smooth running of your company you do not gamble on half-baked applications to get the job done.

Jason says:

Re: Re: Re:

Ideas are unbounded, abstract things. The ‘idea’ can never be impossible.

The implication of the idea of “infinite” is, in application, a suggestion of a limit approaching infinity as scale increases and as hardware and process improvements continue to come along. Nobody actually thinks it’s infinite. The point is that the economics of the supply functions differently because the utility of information is not depletable.

Scott says:

alarmist sensationalism from f/oss camp

F/OSS enthusiasts are going overboard. They are usually the ones accusing Microsoft, among others, of creating fear, uncertainty and doubt amongst customers. In this case, the open source community is mad because their quick misreading of the article(s) in question left them feeling unappreciated.

The second link above provides a well written summary that does not sensationalize the paper. The paper addresses one point, which is what to do when your competitor is giving away their product. It specifically mentions software, news/media, and music.

Here’s the catch. While building a business on an open source business model can be a fine way to enter a market, there are a lot of business out there which are being forced to compete with a force that they do not know how to reckon with. Namely free or open source. If they do not find out how to compete, they go under. Going open source is not an option for most of them, their investment in their business model may not be convertible in that way. Instead they need to learn how to compete. Which is what the article describes.

Finally, the article gives credit to free products, quoting from the original paper, describing that free products are important to consumers, if for no other reason that they spark competition.

nasch says:

Re: alarmist sensationalism from f/oss camp

Personally what I didn’t like about the summaries and excerpts I’ve read (I haven’t read the whole paper) is that many of their suggestions are based on removing value from the software and restricting users’… I hesitate to use such a charged term, but… freedoms. For example, make sure your file formats are closed and obscure so that your users won’t have any competitors to turn to. I have no problem with closed software; I write it myself. But figure out a way to compete by offering more value, not by attracting customers and then locking them in.

jeff4066 says:

Open source is good. Yes. I use it all the time. I have contributed to some. I even have a line or two of code in some.

That said, One cannot lump software into the world-wide category of “goods” and “products” without looking at the entire picture.

Somebody, somewhere, expects to live somehow. A great deal of freeware and shareware, and even open-source, eventually ends up a money-making venture. I know several programmers who have started out open-source, and eventually thought; “Hey, this is as good as regular software, so I’m gonna retire to the Catskills.”. Next thing you know, it’s sold to a bigger firm, or Microsquash, or just gets a license agreement and price tag on it.

I don’t blame them, either. People see a company sell $400 software. They have their own “product”, that works as well, that they’ve been giving away. Maybe they lost their regular job. For whatever reason, they feel their effort should be rewarded in a more tangible way. My favorite backup program ended up like this.

I have noticed, especially lately, that the big trend in the “I think all software should be free!” crowd, even at my workplace, mostly comes from people who only use, not write this software. This is more of a parasitic rather than symbiotic relationship. These people do not click on the “contribute” icon and send even a token sum for software they rave about.

If I go to a car dealer, and pick out a sedan, I do not expect them to just hand me the keys and a title. The salesman won’t bring out a hat and say; “You can contribute to the cost of building this, and we would be very grateful.”. There are many hours of labor by many people involved here. Does decent software deserve any less?

nasch says:

Re: Re:

You had some credibility until you equated infinitely reproducible software with cars. Whatever is going on, with people contributing or not contributing, it’s working. There’s lots of open source software and lots of people continuing to develop it, so the situation we have now is IMO working fine. I don’t think we need to be complaining that more people aren’t helping or donating money.

Norm says:

I have used both and when you use Open Source you have to be prepared for poor documentation and no support.

Sadly that’s too often the case with commercial software as well.

I ditched Red Hat when it started becoming the Microsoft of Linux Distros. The engineers there put their fingers in every friggin package.

Mike – as CEO do you use open source solutions at Techdirt? Are you running Linux on the desktop and using OpenOffice for example?

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