Software Firms Will Also Move to the Center in 2008

When the U.S. presidential primaries wrap up, the winning candidates — after spending months kowtowing to the extremists in their parties — will make a mad dash to the center. A similar rush to the center is now taking place in software, and in 2008, we expect that trend to continue. But in the case of software, the center doesn’t lie between the extremes of conservatism and liberalism but rather between those of proprietary and open.
In the past, some software companies, like Microsoft, have taken a mainly proprietary approach while other outfits, such as the Free Software Foundation, have taken an entirely open approach. But the software primaries are over. The best approach now is somewhere in the middle: a combination of open and closed, or what, in The 7 Cs of the Future of Software, I called “clopen” — though I’m very open to other suggestions.
One manifestation of the momentum towards the middle is hybrid source, in which companies offer open-source and premium, proprietary versions of software. Under pressure from open-source alternatives, software companies need to find a new strategy, one that combines the concepts of free and open with revenue generation.
RedMonk analyst Steve O’Grady notes that hybrid source “is generally applied to projects or products that combine open and closed source software to produce an asset containing both.” O’Grady was prompted to tackle the question of hybrid source after MySQL, which had in the past provided all of their source code without charge, announced a commercial edition of their database design tool, Workbench.
But hybrid source is not the only result of moving to the center between the extremes of proprietary and open. Google exemplifies another strategy: offering free services based on proprietary algorithms based on open-source operating systems. And they’ve made this multi-layered concoction of open and closed work like magic.
Microsoft, like a political candidate who’s won a primary, is not immune to the need to move to the center. As David Strom reports in Baseline Magazine, recently the company “has become slightly more open with respect to its networking protocols. Late last year, they announced a way for third parties to license their core file-sharing protocols through an independent organization called the Protocol Freedom Information Foundation.”
Adobe is perhaps the most obvious example of the need for companies built on closed, proprietary software business models to move to the middle. Their open sourcing of the ECMAScript engine and the Flex SDK shows their considered steps towards a clopen future.
Finding the right balance between the two extremes will be the secret to the success for software companies in 2008 — just like the winning U.S. presidential candidate will be the one who finds the right balance point between the right and the left.