Can open source companies innovate?

Ever since I attended the FOSS conference a couple of weeks ago, I've been trying to figure out how viable an option Open Source is for the software industry as well as developing countries like ours.

Every trail of thought that I could think of led to the same place and today's Open Enterprise column on InfoWorld nails it. The answer is: "Without licensing fees to fall back on, pure open source companies may be limited to imitating proprietary vendors' successes".

Now that everyone has seen how Microsoft is innovating in the next versions of Vista, Office, .NET (Linq) it definitely proves Neil's theory:

Let's say this is the shape of the software industry for the next 10 years. A proprietary company comes up with an innovative idea and it's successful. The open source community scrambles to duplicate this idea. Eventually the open source version matures, it catches on, the product category becomes commoditized, and customers gravitate toward the lowest-cost option. Meanwhile, a new innovative idea has come along. Rinse, repeat.

Bill Gates told CNet, "The industry will always be a mix of free and commercial software." If he's finally fine with that, is it good enough for us, too?

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Written on September 21, 2005