Eric's article is a reminder of how bleak the software industry looked in 2003.

Eric Raymond, the leading philosopher of the open source movement:

Open source turns software into a service industry. Service-provider firms (think of medical and legal practices) can't be scaled up by injecting more capital into them; those that try only scale up their fixed costs, overshoot their revenue base, and starve to death. The choices come down to singing for your supper (getting paid through tips and donations), running a corner shop (a small, low-overhead service business), or finding a wealthy patron (some large firm that needs to use and modify open-source software for its business purposes).

I've been thinking about open source software for the past six years, and I think Eric Raymond is right. Tipping seems unlikely to catch on, so I can either run "a small, low-overhead service business" (translation: I can write custom business applications as a consultant, which I did in 2000-2001), or I can enhance open source software for a large employer (which is what I do right now).

These options aren't sexy--and they won't make me filthy rich--but the pay isn't bad, and I do have some fun. (In my current job, I get to hack on multimedia software, 3D game engines, and advanced programming languages.)

What if I have a great idea, and I want to change the world? I can work on my great idea during nights and weekends. Once I get something working, I can recruit volunteers--which is the most fun a programmer can have, I think. And if our work is good enough, we can improve the lives of a hundred million people, write a book for O'Reilly and someday get paid to improve our creation.

The open source future is lacking in entrepreneurial zest and multi-million dollar fortunes. But it's a lot more appealing than the Microsoft vision. I think I could live with the open source future when I'm 55.

The Missing FutureBut there's one group we haven't heard from yet: The small software developers. For 25 years, these people were the lifeblood of the personal computer revolution. Their old vision is still the sexiest: Build great, innovative software, sell it to the users at a reasonable price, make millions of dollars, benefit humanity, retire young. And if you mistreat your users, you'll loose them, because you have a hundred competitors. The old Silicon Valley was built on this dream, and it worked for two decades.

But this dream is nearly gone. It's getting crushed between the awful power of Microsoft, and the onrushing juggernaut of open source. A 30-person company can't compete with Microsoft. And a 30-person company will have a hard time competing with 300 open source contributors giving software away for free and making their living as in-house developers (though it can be done).

By itself, a 30-person company is such a tiny force. And each of these little companies is proudly independent, and each is too focused on destroying other little companies to see the giants all around them. Individually, the little companies will be trampled upon, unseen. They have no philosophers to speak for them, and nobody to defend their role.

The small companies offer me no visions. They can't build platforms; they can't challenge Microsoft, and if they keep squabbling with each other, they can't even create simple standards. The press and the business world won't even look at their technology until after it has been co-opted by the big players.

If you want my support, and the support of others like me, propose a vision. Show me you can co-operate, show me you can build platforms, and show me you can drive back Microsoft without becoming the next Microsoft. Tell me a tale of 2031, and what I'll be doing when I'm 55.

You may have allies in the open source world (Richard Stallman will never like you, but Linus Torvalds may buy your software). You may have allies in the press. You may even have allies in big business. But if you want to be anything other than niche players, you're going to have to speak up. The world is listening.

Responses.

It comes back to the bottom line.  If you can solve a problem for a customer, they'll pay for it.   Customers rarely compare startups to startups.  In fact, they are willfully ignorant and intentionally adverse to them.  Sure, you have to differentiate your product, but it should be in the context of what you are solving, not technical details or merit.  I think too many people get caught up in how things are built and with what technologies rather than what it solves.  Other than execution, I think it's only investors that lose sleep over competitive comparisons over minor technical differentiators. 

"I think too many people get caught up in how things are built and with what technologies rather than what it solves."

That is the biggest one ring to rule them all truth of truths ever – it's always been and remains the Achilles heel of product designers and engineers: they forget to make benefits that others desire, instead of obsessing over features they're proud of.

Occasionally one can get lucky and realize both...

I think you're both right.

It's also interesting how in 2003 the author did not see the coming rise of software as a service.

There are literally hundreds of independent software vendors who run their SAAS and do well. 

There will never be an end to writing new code for tailored workflows atop open source engines until there is an end to people using them... 

... and that's looking to be sooner than we think.