Jobs for Hackers:
Yes, You Can Eat Open Source

In the last section of "The Cathedral and the Bazaar", Eric S. Raymond argued that the bazaar development mode may be so much more effective than the cathedral mode that open-source software may eventually drive closed, proprietary software almost completely out of the market.

The OSI doesn't have a position either for or against intellectual property rights in software. ESR, one of our co-founders, supports them; others have different positions. We believe that the contention over this issue that has polarized the open-source community in the past is largely pointless, because the best arguments for open-source are grounded in economics and engineering.

We suspect that in the future selective pressures for higher-quality software will favor the open-source model so heavily that closed or "shrouded" software becomes the exceptional case. Indeed, there are some kinds of software (including many mission-critical Internet tools such as DNS) for which this is already true.

Can Programming Survive?

When OSI representatives speak in public, we're often asked the following questions:

1. How can I make a living doing open-source software?
2. If the open-source model wins out, will programmers starve?
3. Can corporations earn good returns on selling open-source?

We don't have final answers. But we have been thinking about the question enough to make some suggestions.

How can I make a living doing open-source software?

There are companies making money programming open-source software right now. Red Hat, Zope, and IBM are three of the best known. There are others.

If open-source wins out, will programmers starve?

We don't think the triumph of open-source will doom anyone to starvation. But to understand why not, we need to take a fresh look at the economics of software and the work that programmers actually do.

Computer programs have three kinds of economic value. They have use value, market value, and monopoly value.

The use value of a program is its economic value as a tool. The market value of a program is its value as a saleable commodity. The monopoly value is the value you gain not just from having the use of a program but from having it be unavailable to your competitors.

The standard nightmare programmers have about open source is what ESR calls the "Open-Source Doomsday" scenario. This starts with the market value and monopoly value of software going to zero because of all the free sources out there. Use value alone doesn't attract enough consumers to support software development. The commercial software industry collapses. Programmers starve or leave the field. Doomsday arrives when the open-source culture itself (dependent on the spare time of all these pros) collapses, leaving nobody around who can program competently. All die. Oh, the embarrassment!

People who worry about "Open Source Doomsday" have lost sight of one fundamental fact: If having a program written is a net economic gain for a customer over not having it written, a programmer will get paid whether or not the program is going to be free after it's done.

The doomsday scenario also rests on several shaky assumptions:

Programming will collapse if software has no market value

Very unlikely. Code written for resale is only the tip of the programming iceberg. It used to be said that 85% of all the code in the world was written in-house at banks and insurance companies. This is probably no longer the case (and a good thing; who in their right mind wants to wear a tie and grind out huge volumes of COBOL?) but most estimates put the proportion of all code written in-house at companies other than software vendors at over 75%.

This "vertical" code includes most of the stuff of MIS, the financial- and database-software customizations every medium and large company needs. It includes technical-specialist stuff like device drivers (nobody tries to make money selling device drivers!). It includes all kinds of embedded code for our increasingly microchip-driven machines – from machine tools and jet airliners to cars to microwave ovens and toasters.

Most vertical code is integrated with its environment in ways that make reusing or copying it very difficult. (This is true whether the "environment" is a business office's set of procedures or the fuel-injection system of a combine harvester.) Thus, as the environment changes, there is a lot of work continually needed to keep the software in step.

This is called "maintenance", and any software engineer or systems analyst will tell you that it makes up the vast majority of what programmers get paid to do. And it will still need to be done, even when most software is open-source.

Between originating, customizing and maintaining vertical code (and related tasks like system administration and troubleshooting), the use value of software would still support the millions of good jobs in that 75% even if all "horizontal" or standalone software were free.

So even if we make absolute worst-case assumptions about the other factors in the "Open Software Doomsday" scenario, only at most 25% of the programming profession is exposed. As we'll see, the actual exposure is probably much lower, and there may be none at all.

Open-source software has no market value

We know this isn't true. Probably the purest demonstration today is Red Hat, which has built a flourishing business selling software you can download for free from Red Hat's own web site! Red Hat's sales are doubling every year.

What you're really buying from them is handholding and support for the "free" stuff they sell – a single place to go when you have problems. In 1998 there were already close to a dozen companies working this model successfully. The tech boom came and went, and today (in2004) the handholding and support market is bigger than ever — and poiused to grow explosively as Linux enters the early-majority phase.

Open-source software has no monopoly value

Even this may not be true. Adopting or even just studying someone else's software is not a costless, frictionless process; you need to dedicate skilled time to it. As product cycle times drop, coattail-riding gets less attractive, because the payoff period shrinks relative to the time you had to dedicate. And time your skilled people spend studying someone else's "monopoly" code is time you're spending getting to where the competition used to be (rather than where they are now).

You can read an extended discussion of the context in which trade secrets may still make sense.

Outsourcing open-source development means a loss of in-house jobs

At some individual shops, some of the time, maybe. Even this doesn't seem very likely. When did you last see a software development group that didn't have way more than enough work waiting for it?

Open source certainly does not necessarily mean the software development industry as a whole will shed paying jobs; with programming talent as scarce relative to demand as it has been, it probably just means more commercial projects will be able to find bodies to do them.

Can corporations earn good returns on selling open-source?

This, too, is an important question. There may still be a lot of programming work if the software-for-sale industry tanks, but maybe fewer of the jobs dedicated programmers and hackers really want.

We address this question in the business case for open-source. We believe there are serveral different business models under which selling software would still be viable in an open-source world – and both have exemplars today.

Conclusion

Yes, we can live on open-source software. The industry would go through an earthquake adjusting; a lot of us would see our jobs change or be redefined. But there would still be lots of programming work to do for pay, we'd have much better tools to do it with – and Microsoft's stultifying monopoly would almost certainly be no more ...