How open-source software transformed the business world?

TL;DR: Open-source adoption is key to driving innovation and business performance. Successful companies not only use open-source software but actively contribute to it, enabling collective growth and competition across industries. As businesses undergo digital transformation, embracing open-source is no longer optional but essential.

The Imperative of Open Source in Modern Business

Eric S. Raymond, a pioneer of open-source, famously said, "Every good work of [open-source] software starts by scratching a developer's personal itch." This insight rings true as we've seen transformative programs like the Apache web server, MySQL, and Linux emerge from such motivations. Today, even vertical companies with narrow focuses are embracing open-source methods with enthusiasm.

Why Open Source Matters

A recent report from McKinsey & Company titled "How Software Excellence Fuels Business Performance" highlights that the most significant distinguishing factor for top-quartile companies in any industry is open-source adoption. These successful companies transition from merely using open-source software to actively contributing to it. The report demonstrates that top companies' adoption of open source has three times the impact on innovation compared to others.

The Synergy of Contribution

Many business leaders struggle with the concept of contributing to resources that competitors can also utilize. However, as President John F. Kennedy wisely noted, "A rising tide lifts all boats." When organizations share resources, expertise, and efforts in open-source projects, everyone benefits. Companies that engage in open-source initiatives don't just survive; they thrive.

Consider this: How many businesses use Unix over its open-source counterpart, Linux? Open source dominates in software, evidenced by top tech giants like Amazon, Google, Facebook, and Microsoft, all of which are built on or extensively use open-source technologies.

Open Source in Vertical Industries

The Linux Foundation, in its report "Software-defined Vertical Industries: Transformation Through Open Source," describes how industries such as automotive, finance, telecommunications, energy, and public health have integrated open-source approaches to remarkable effect.

The Benefits of Digital Transformation

Enterprises that excel today are those that continually upgrade their skillsets by adopting open-source methods. This "digital transformation" involves converting business models and processes into open-source software and services using code, APIs, cloud assets, and containers.

Currently, over 70% of global mobile phone users leverage services built on Linux Foundation's open-source projects. In the telecommunications sector alone, programmers have contributed 78 million lines of source code to LFN projects over the past six years. Using a Constructive Cost Model (COCOMO), these contributions would have cost an estimated $7.3 billion had they been developed using proprietary methods.

Collaborative Innovation

Stories of competitors collaborating to save billions are found across verticals, from public health to financial technology. Despite their differences, these industries share a common thread: the recognition that open collaboration reduces costs, accelerates time to market, enhances quality, and fosters innovation.

Join the Open-Source Movement

If your business isn't leveraging open-source yet, it's time to start. The future of your business depends on it. In today's rapidly evolving business landscape, embracing open-source isn't just a smart strategy—it's a necessity.

How open-source software transformed the business world?
James Huang May 15, 2020
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