Linux: The Revenge of Ronald Coase

Tom Slee writes:

Whimsley: Linux Grows Up and Gets a Job: One of the highlights: "over 70% of all kernel development is demonstrably done by developers who are being paid for their work". 14% is contributed by developers who are known to be unpaid and independent, and 13% by people who may or may not be paid (unknown), so the amount done by paid workers may be as high as 85%. The Linux kernel, then, is largely the product of professionals, not volunteers.

So Linux has become an economic joint venture of a set of companies... participating for a diverse set of commercial reasons. Some want to make sure that Linux runs on their hardware. Others want to make sure that the basis of their distribution business is solid. And so on, and none of these companies could achieve their goals independently....

This does not mean that Linux was always a commercial venture, or that all open source projects are commercial ventures.... Open source started off as a small-scale set of projects done mainly by volunteers. As the scale and scope of open source projects an increasing number have provided their contributors with some money (augmented perhaps by a waitressing job). Now a few of the most successful have hit the big time and become full-scale economically important commercial enterprises.

Things change. As open source software has matured and expanded it has become both more unlike the rest of the world and more like it. It will be fascinating to see what comes next, but the Linux Foundation report has made clear that open source has crossed its commercial Rubicon, and there is probably no going back.

Comments

[James Grimmelmann]

Open source has not crossed its commercial Rubicon. It both crossed its Rubicon long ago and has yet to come anywhere near it. The open-source ecology has had commercial open-source projects reaching remarkably far back, and it has an enormous (perhaps predominant) volume of non-commercial projects today. Think of it as an ecosystem and it becomes clear that there have always been non-commercial mammals and commercial thunder lizards coexisting within it.

The Linux kernel has crossed its commercial Rubicon. But that's just one species, and should not be mistaken for the ecosystem of which it's a part.

[Blissex]

The Linux thing exists only because commercial sw development has very high overheads: ssw vendors spend less than 5-10% of their revenue on sw development. The bulk of the rest goes to profit and options, marketing, and administration. At some software companies the expense accounts of salesmen cost more money than the whole of the sw development side. Free sw and Linux exist because the actual development of sw is very inexpensive compared to the burden of supporting a commercial organization and its immense overheads.

[Matt]

We only have property rights because of transaction costs?

Following the links, backward, they count value in lines of code. But they still have production equations, a directed graph of production agreements. This method of business extends into open source, and open source browsers are gaining significance. It is not on the desk top, but it is every where else.

Not only are transaction costs nearly zero, but any money technology is generally less efficient then passing around software.

[lark]

Gartner just came out with a report that Windows is "collapsing". The complexity makes changes terribly difficult.

I think the reason the Linux kernel is so solid is in part because many paid and unpaid, unaffiliated, folks work on it. It has to be modular enough to handle a distributed support model. That, as a side effect, insures a kernel whose complexity is far better disciplined than Windows.

[jerry]

Now if only Gartner would collapse....

(Do they still do their asinine, innumerate, pseudo-probability thingies at the end of every one of their projections?) (0.6)