Linked by David Adams on Tue 4th Dec 2007 19:44 UTC
Red Hat An enterprise Linux "expert" answers the question: "How can an open source software company like Red Hat stay in business if CentOS - and Red Hat itself - give their code away for free?"
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code isn't as valuable as people
by Luminair on Tue 4th Dec 2007 23:09 UTC
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The reason you can give away the code for the software you develop and still make money is because the developer of the software enables the software to have value.

The developer is the expert, so without the developer the software might not work in the first place. Without the developer the software would stay broken when it breaks. As all other software and hardware evolves, the developer needs to evolve their software to keep it working as well.

And by virtue of how difficult software engineering is, it is very very difficult for non-experts to become experts, non-developers to become developers. It is very very difficult for not-the-guy-who-first-wrote-this-code to understand what the code even does.

This is why Red Hat can sell services concerning their open source product -- they are experts of their product, and the cost of entry into being as much of an expert is very very high.

That said, Red Hat being a success doesn't mean open source software is the be-all end-all for commercial software organizations. Leaving your source open does mean that someone else could come along and dedicate money manpower to becoming an expert at your product, eventually usurping the product and its market value from you. But either way, the real value of the product is found in the people working on the code, not the code itself.

Great people make great code into great products. That string of implications doesn't run backwards; the code doesn't do anything on its own.

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