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Thirty-four billion dollars – the amount sounds absurd for a company that produces ad-free code that can be downloaded for free. But that is what IBM paid for Red Hat back in October. Founded in 1993 in Raleigh, North Carolina in the United States, the firm – which is listed on the New York Stock Exchange – provides open source software. Unlike proprietary software, such as the Microsoft Windows operating system, the source code of these computer programs is open to anyone. In other words, anyone can read it, change it and redistribute it.
“It’s a bit similar to food,” says Pierre-Yves Gosset, director of Framasoft, a non-profit organisation that develops open source software. “You have ready-made meals – proprietary software – whose ingredients you’re vaguely aware of and that you can’t change. Then you have free software and open source software programs, where you know what all the ingredients are, where they’re from and how they were prepared. Plus, you can change them, improve on them to suit your taste, and share them with friends.”
Days seem long gone when Steve Ballmer, then CEO of Microsoft, said “Linux is a cancer”
Ever since it was started in the 1980s by the American Richard Stallman in response to the patents filed by big software developers like Microsoft, the free software movement has grown steadily. Mainstream users, the extreme vast majority of whom use Windows and Mac OS (operating systems owned by Microsoft and Apple), are not always aware of it. But these programs are now everywhere. They form the basis of Android, the operating system from Google that powers most smartphones, in cars such as Tesla, BMW and Mercedes, and in computers aboard the International Space Station (ISS) and Airbus flight simulators.
Open source has a particularly dominant position in web infrastructure, the Internet of Things and the cloud. It has become so omnipresent that the days seem long gone when Steve Ballmer, then CEO of Microsoft, said “Linux is a cancer,” and likened free software to communism. That was in 2001. Since then, despite being the ultimate defender of closed software, the tech giant has come to embrace open source. In June 2018, the Redmond-based firm bought the open source software development platform GitHub for $7.5 billion and joined the Linux Foundation, which finances the development of the Linux kernel operating system, in 2016.
And Microsoft is not the only one. All the long-standing industry giants are now dealing in open source. For example in 2010, the American firm Oracle, known for its proprietary enterprise software, bought Sun Microsystems, which developed the open source programming language Java, available under a free licence, for $7.4 billion.
Only after its beginnings, rampant with utopian and charitable ideas, did open source software programmers figure out a business model. Red Hat, for one, is a very profitable company. It started out distributing a free version of Linux, developed as an alternative to Microsoft software. Then the firm split its range in two, developing a paid version, called Red Hat Enterprise Linux AS (RHEL), which co-existed alongside the free version (Fedora). Red Hat also provides paid services, including integration, training and support. In 2018, the paid business generated turnover of $2.9 billion for the company.
“If traditional, big-name software developers like IBM are buying pure open source players like Red Hat, it’s obviously to take over their direct competitors before they become too big,” says Gosset. “But that’s not the only reason. It’s also because the best developers and codes are now in open source.” Open source has evolved into a very efficient production model. “It’s a long and costly process for a company to develop powerful software on its own,” says Stéphane Fermigier, co-chairman of France’s French National Council for Open Source Software (CNLL) and CEO of the software development company Abilian. “But if you release your code freely online, a community of developers will get together and work on developing it. The openness brings much faster and less costly innovation.”
The system is so efficient that it has pushed traditional developers to use it for their own products. For example in 2014, Microsoft announced that it was open-sourcing its .NET Framework ecosystem, and one of its trademark software programs is set to follow suit in March 2019: the Windows 10 calculator. “Our goal is to build an even better user experience in partnership with the community,” Microsoft said on its official blog.
“Microsoft did a complete 180. They realised that by sharing the recipe they can build better quality programs faster and cheaper,” says Gosset from Framasoft. “They are now the world’s biggest contributors to open source. But it’s also slightly for show, because they’re not ready to open-source the code of their star products, like the Windows operating system and Microsoft Office suite.”
It's as if tech giants found a free recipe
“Industry giants have clearly understood the advantages of ‘shared digital goods’ built by communities of developers. They use them for their non-differentiating aspects, i.e. where there is no competition,” says IT consultant Raphaël Bauduin, founder of the Free and Open Source Developers’ European Meeting (FOSDEM) held every year in Brussels.
Silicon Valley firms also significantly benefit from open source. Facebook jokingly said in a post published in 2006 on its official page something everyone already knew: “Mark Zuckerberg didn’t write all of Facebook in his dorm room at Harvard. (Sorry, Mark, your secret is out). He had a lot of help [... from] open-source and free software. Without it, there’d be no Facebook,” the company wrote. The same could be said of Google, Amazon or Twitter, which use abundant amounts of open source modules.
"End customers (businesses and governments) are increasingly turning to open source"
Marc Palazon,, chairman of the Syntec Numérique Open Source Committee and CEO of Smile
To go back to the food analogy, it’s as if tech giants found a free recipe concocted by the developer community, then added a secret ingredient to sell it as a ready-made meal and generate substantial profits. That approach is starting to irritate open source developers. In August 2018, Redis Labs, which develops the popular open source database management system NoSQL, sounded the alarm. “[Some cloud providers are taking] open source projects and repackaging them into competitive, proprietary service offerings. Cloud providers contribute very little (if anything) to those open source projects,” the American firm wrote. “Instead, they use their monopolistic nature to derive hundreds of millions [of ] dollars in revenues from them. Already, this behaviour has damaged open source communities and put some of the companies that support them out of business.” Basically, Redis Labs doesn’t want big-name cloud providers to make more money than the original designer, in this case Redis. Amazon Web Services, Google Cloud Platform, IBM and Microsoft Azure, which all use Redis, were the main targets in its statement. “It’s now harder for small developers that only do open source to sustain their business model due to competition from GAFAM (Google, Amazon, Facebook, Apple, Microsoft),” says Bauduin. A case in point, the French gem Mandriva (formerly Mandrakesoft), which developed the Mandriva Linux open source operating system, closed its doors in 2015. To avoid the same fate, Redis Labs has decided to place some of its modules under a proprietary licence to keep them from being picked up by the big leaguers without anything in return. MongoDB and Confluent, two other open source leaders, made similar moves in 2018.
THE SHIFT IS PICKING UP PACE
The average user hasn’t been affected by these upheavals. “That’s where the paradox lies,” says Pierre-Yves Gosset. “The open source movement has won, because virtually all proprietary programs contain fragments of open source software, but unfortunately nothing has really changed for the end user. Windows and iOS are still closed, and Android is only partly transparent. From that standpoint, open source hasn’t managed to assert its philosophy.” Bar some rare exceptions, such as the browser Firefox, VLC media player or the LibreOffice suite, end users (individuals, businesses, governments) use few open source programs. Why? “For individuals, open source programs are less accessible than their proprietary counterparts,” says Gosset. “And in the business world, no IT manager has ever been punished for choosing IBM as a service provider. It’s choosing continuity over open source, which is perceived as riskier.”
Marc Palazon, chairman of the Syntec Numérique Open Source Committee and CEO of Smile, has a more tempered opinion: “Although there is a clear shift towards concentration, as seen in the recent takeover of Red Hat and GitHub, there are still a lot of pure open source players out there. And there will be more of them because end customers (businesses and governments) are increasingly turning to open source solutions to avoid having to pay for proprietary software.”
A report published by ReportBuyer in February 2018 estimates that the global market for open source services will grow from $11.4 billion in 2017 to $32.95 billion in 2022. These amounts may look paltry in relation to the overall IT market, but they are growing, and at an annual rate of 23.65%. Maybe it isn’t so far-fetched to wonder if one day, open source software could very well take over for good.
SWISSCOM: A TEXTBOOK CASE
Like many technology companies, Swisscom bases most of its infrastructure and services on opensource solutions. This is the case for its main server, Swisscom TV and the Internet box, which run on GNU Linux. The national provider says it applies the 80/20 rule, i.e. 80% open-source software and 20% proprietary developments tailored to specific needs. Jacques Van der Merwe, principal security architect at Swisscom, explains: “Open-source solutions are significantly faster and less costly to deploy than proprietary software, while enabling the latest innovations to be implemented on an ongoing basis. Our cloud services, for example, are based on the open-source applications Cloud Foundry and Open- Stack.” And there's more: Swisscom is increasingly relying on open-source hardware, particularly for its selection of network components.
In simple terms, open source refers to any software program whose source code is freely licensed, granting users the right to use, distribute and change the software. In practice, open source can be interpreted in various ways depending on context and, in particular, on the licences used.
This software ensures users have the freedom to study, change and redistribute the software. These freedoms are legally and technically guaranteed through access to the source code. Free software is almost always open source, but the notion also encompasses the ethical and philosophical tenets held by the Free Software Foundation. The term “free” in this definition does not mean free of charge, as nothing prevents its commercial sale.
Source code refers to code written in a programming language before it is compiled and executed on a computer, similar to how a recipe is used to prepare a meal.
As the name indicates, freeware can be distributed and used at no cost to the user. But freeware may differ from free and open source software in that the software can be both available free of charge and proprietary, meaning its source code is patented and cannot be accessed. Examples of closed source freeware: Adobe Reader, Internet Explorer, Google Maps.
Closed source software
Also called proprietary software, closed source refers to any software whose source code is not available or is protected by copyright. In practice, this software is distributed in executable form (machine language) without the ability to study or change its source code (programming language) and therefore to understand what it really does. Examples of closed source software: Microsoft Office, Windows.