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Open Source Journal Authors: Matt Davis, Jyoti Bansal, Liz McMillan, Carmen Gonzalez, Elizabeth White

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Startups: Article

B2B Startups and Open Source | @CloudExpo #Cloud #Security #Linux #AI

Perhaps one of the most overlooked aspects of open source is security

For a long time, Bill Gates and in fact the entire leadership team at Microsoft were vehemently against the open source community. Steve Ballmer had once called Linux “a malignant cancer” in reference to Linux allegedly violating nearly 235 patents that Microsoft owned. Even post-retirement, Bill Gates had once picked on open source claiming that this model creates a license that prevents anybody from improving the software. “I think if you invent drugs, you should be able to charge for them,” he had said.

But Microsoft, and the entire gamut of B2B service providers, have come a long way since then. Today, the company has embraced open source and while Microsoft products are themselves not open-source, the company has been actively contributing to open source projects like Node.js and Hadoop.

So why did Microsoft turn a corner with open source? And why is it important for new-age B2B startups to open source their applications? One of the main reasons for this is compatibility. According to Yoav Kutner, the former CTO of Magento who is now the CEO of Oro, an open source eCommerce platform for B2B businesses, the back office systems of many a B2B business is still archaic and does not permit customization. With an open source model, it is possible to still offer a full lifecycle of order management.

Another important reason to open source your application is interoperability. Businesses regularly collaborate with stakeholders like vendors, distributors and suppliers who are outside their premises. It can be difficult to build a closed application that is compatible with the technology system that your vendor or distributor is using. Open source applications are a lot more interoperable and are not restricted by proprietary data formats. This makes them valuable in a business setup.

But perhaps one of the most overlooked aspects of open source is security. There has been a substantial rise in data breaches globally over the past few years. According to one study, the average total cost of a data breach is nearly $3.79 million. With traditional closed systems, business customers are at the mercy of the vendor and are in no position to tell whether the systems in place are as secure as the manufacturers claim. With open source systems, thousands of collaborators get to poke holes into your software product. This makes it easy to identify bugs and loopholes that could potentially be abused by hackers.

There are also other factors that make open source attractive to customers. Open source software tools are essentially free to download which make them the first choice for many businesses. But this can also be a challenge in monetizing your startup. Businesses can however adopt other strategies like selling add-ons and plugins through a marketplace, taking a cut on payment transactions through the platform, charging for live support and offering paid training to customers.

Bootstrapped startups routinely face resource crunch that prevents them from building products that can match the scale and size of established rivals. With open source, your business is likely to bring together thousands of contributors who can potentially grow your business much faster than your startup can do it as a closed team.

More Stories By Harry Trott

Harry Trott is an IT consultant from Perth, WA. He is currently working on a long term project in Bangalore, India. Harry has over 7 years of work experience on cloud and networking based projects. He is also working on a SaaS based startup which is currently in stealth mode.