Opensource catalyzes a paradigm shift in the computer industry

Going through the daily drudgery of earning to survive, one always keep wondering - “where are we going with all this?” or “which way should I turn now?” or if you are a business, then “which way should we take today so that we are where others would try to flock to tomorrow?“. You are always crying out for a larger view of things. And from time to time, you find the words of someone else with a theory that can shed some light on that possible path.

Tim O’Reilly’s wonderful essay The Open Source Paradigm Shift has some very interesting conclusions made out of commonly known scattered facts. His argument, that we are on the edge of another paradigm shift in the computer industry, makes a lot of sense to me, as it articulates feelings that I havent been able to put down in words for quite a while.

The last paradigm shift that happened in the software industry was when it “moved up” from being centered around hardware to being centered around software. Monolithic mainframes from IBM, Digital etc. ruled the day in those days, with software being mostly bundled or custom-made. Then the IBM PC happened, and with hardware being commoditised, the focus shifted to the operating system and packaged software. The hardware behemoths were no longer the only one in the market, which now got flooded with others like Compaq, Dell, etc. Note that while individual hardware majors suffered, the market actually exploded, more wealth was generated, and most importantly more people benefited by having easy access to cheap hardware.

That time is now here, when the software industry is about to move up - from being centered around software to being centered around services. Tim narrates a great anecdote in his article, where he asked an audience two questions - “how many people used Linux?” and “How many people used Google”. Obviously, the supporters for the latter far surpassed the former, underlying the irony of these people actually unknowingly using Google’s cluster of 1,00,000 Linux servers behind the website. The software behind services no longer matters to the user - he just sees his PC in front of him which can be Windows, Linux, Mac, etc.

Opensource is the catalyst which will cause this paradigm shift, by commoditizing software. It would no longer make a difference whose software you use to access an Internet Service - the service would be God.

Yes, Microsoft will have to cower down(in the shrink wrapped software business), and scream about “Opensource being a IP destroyer”, and may just lose a lot of money in the business. But the market will explode further, just like before, with more wealth created, and with more people having access to cheap, modular, (mostly) standardized and legal software. And they will pay money primarily for the service (isnt that the ultimate goal?).

This indeed is what is staring at our face right now, whether we want to admit it or not. The Dot-com boom era was probably a step in that direction, but with not much of a solid foundation. Google, Baazee, Fabmall, etc. are the future.

So stop dreaming about another great idea of software to sell. Start selling services. Yes, ASP is a great model, and it harmonizes well with Opensource licencing and philosophy too.

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