Open-sourced software has flipped the way value is derived from technology.
By giving universal access to a product’s design or blueprint, it has helped some of the world’s newest multi-billion dollar tech companies establish themselves.
“We’ve left the era where we have to buy software,” former NASA chief technology officer and co-founder of the of the OpenStack project, Chris Kemp, said.
“Look at software and think of it less than a product and more as sheet music. It isn’t about your exclusive ability to own and possess that music to play it, it’s really about it seeing it practiced, seeing it performed, seeing it mastered and the best way to do that is to set it free.”
Kemp co-founded Nebula, a once-hot startup which was funded to the tune of $US38.5 million by some of Silicon Valley’s foremost venture capitalists. (It went out of business last month.)
He explained licensing and selling software wasn’t the only way value can be gained from tech. The economics of software have changed and open-sourcing technology that you can build on top of has enabled big tech companies to grow at formidable rates.
“The value of Canva is in the content, the templates, the design, not in the technology which is used to run the website and I’m sure Canva uses a number of open-sourced technologies and because these open-sourced technologies were available to that company that they were able to create that so quickly,” he said.
He explained the same was true for companies like Uber, AirBNB, Google and Amazon who “all build on open-sourced technologies” and typically build on top of the tech.
“You’re standing on the shoulders of giants both from a technology perspective and an infrastructure perspective like never before,” Kemp said.
In his late 20s, while he was the CTO of NASA, Kemp decided to open-source everything. The idea for OpenStack, an open-sourced cloud platform, came when he was working on mapping Mars.
The sheer amount of data which had to be processed would have pushed the bill into the trillions of dollars and meant the project probably wouldn’t have happened.
“It’s not about the code, it’s about the value that the code provides,” he said. “It far exceeded to value of keeping this as a proprietary closed project in NASA.”
“We decided we could make this technology available and other people would embrace it, we could create a standard that would benefit NASA,” he said.
“We didn’t think that…taxpayers should be paying, for code that was proprietary. This was a fundamental philosophical argument. If public money was being spent on a project, the code, intellectual property and knowledge created in that project should be open-source.”
He said if NASA had done what it had in the past and attempted to licence its cloud platform, the value would have been much lower.
“The more people that use a product, the more people who are debugging it, the more people who are contributing to it. The more you give it away, the more value it has to you because you’re getting more contribution back,” he said.
“It flies in the face of economics, it’s like negative scarcity.”
Open-sourcing for startups
While the idea of open-sourcing is great when you’ve got the US government and big tech companies like Cisco and HP chipping in to the cause, for a startup it isn’t something many can entertain.
Although, they do have the ability to leverage open-source software from others which helps them grow and allocate their limited resources better.
“It becomes an infrastructure play that we don’t have to worry about,” Prezentt CEO Justin Davies said.
Prezentt CTO Bruce Werdschinski explained that as a startup, there were a number of open-sourced tools that it used, including Basecamp’s Ruby on Rails.
“There are some open-sourced components that are used but the magic is how you put them together,” Werdschinski said.
“The worst thing for a startup is the need to solve a problem that has already been solved.
“If you can leverage their expertise that has been open-sourced that allows you to grow much, much quicker.
“It’s not anything that engineers can’t do, but if you don’t need to do it’s a big benefit. It allows you to focus on your special sauce.”
Open-sourcing for recruitment
Open-sourcing everything was one decision which Kemp said made hiring talent for a government agency much easier.
“We needed to attract the best developers and frankly the best developers in the world don’t like working on closed projects and they don’t like working in secret government labs where they can’t collaborate with people,” Kemp said.
As the Australian Government prepares to launch its Digital Transformation Office on July 1, Kemp said it was going to take a real recruiting effort to attract the right people who could execute.
“It’s like volunteer work, you have some people which have made a bunch of money who see it as an opportunity to do something for the country,” he said, adding high-level government officials are better served to recruit through their networks rather than the agency placing a job add.
“The biggest challenge for me in the government, if I could fix one thing, would be the liquidity of human capital.
“It was far too difficult to hire people, it was far too difficult to fire people. If we just had the flow of people, new ideas, diversity, coming into the government projects that I saw, we would see more innovation.”
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