Monday, March 27, 2006

Does Open Source Create Jobs?

Another interesting article about open source software.

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And How About Ajax and Web 2.0, Now That We're On the Subject?

By: Roger Strukhoff
Mar. 27, 2006 01:15 PM

Does Open Source Create Jobs?

As West Coast Bureau Chief of SYS-CON Media, I have the privilege of observing, and reporting on, what remains the most dynamic technology development region in the world, Silicon Valley. And frequent visitors to the SYS-CON family of websites will be familiar with my occasional rants about how things just aren’t what they used to be around here, even as we approach the sixth anniversary of the initial dot-com bubbleburst.

My lament runs something like this: the Nasdaq continues to be mired somewhere around the 2000 level, traffic (aka my “favorite metric,” according to our publisher director Jeremy Geelan) is still less abominably bad than in the glory days, and acres upon acres of low-slung office buildings continue to sit empty.

The singular fact emerging from all this is that employment has simply not approached glory-day levels. Even as the Nasdaq has edged up 15% in recent months, it languishes far, far from its late 90s peak. And the most wildly successful Silicon Valley company in recent years, Google, has shown signs of stock-price stress in the wake of a candid assessment by the company’s CFO about its prospects for future growth.

OK, enough replaying of the familiar whine. My purpose today is to examine the question about whether the hottest topics in software development right now—Open Source, Ajax, and Web 2.0—offer any relief.

Open Source is as much a political movement as a technical one, and has a very large and tremendously passionate following around the world. Ajax, the old wine in a new bottle, has tapped into the open-source sensibility to launch a new wave of application development suited for the current principle that websites should be faster, more functional, and highly flexible. And Web 2.0, a term that noted Silicon Valley venture capitalist was just quoted as saying makes him “puke,” has risen into the zeitgeist so quickly as to give everyone a bit of queasiness as they try to define it, and more important, value it properly.

But does any of this solve the problem of creating jobs? And it’s always seemed to me that, at the risk of sounding like a hackneyed politician or out-of-touch activist, that job creation is the keystone of capitalism and the (theoretically) fair-minded democracies it helps create and foster.

My attention was drawn to recent coverage of three classic Web 2.0 companies, flickr, myspace, and youtube. All have put “the community” at the center of their plans, in a way that respects hive intelligence and lets users decide what the heck is going to be going on at the sites. The first two have been wildly successful, both in terms of the traffic they attract and in the fact that they’ve been sold to major corporations (Yahoo and News Corp., respectively). The third, youtube, appears to be on a similar path.

But none of these companies created much in the way of employment. A staff of 19 currently drives the youtube vision, and stories from the early days of flickr and myspace show similar skeleton-crew efforts.

Contrast that to Google or Yahoo, or the father of the dot-com boom, Netscape, or an even earlier generation of start-ups that included Apple, Oracle, Sun Microsystems, and of course, Microsoft.

So will the Web 2.0 phenomenon create any meaningful employment? Will there be any trickle-down wealth creation to anyone but a precious small group of founders? (Not that there’s anything wrong with the founders being enriched, as they people all had penetrating vision and the will to work 26 hours a day to make it happen.)

Turning to the other two hot topics, Ajax and Open Source, will they generate significant employment?

Isn’t Ajax just a new/old way to create applications? It seems destined to make companies more adaptive and will reward those programmers and managers who master its subtleties and potential, but does it in and of itself engender any new job creation?

And how about Open Source? One of the great overarching topics in technology today, open source has been assailed by traditional software vendors as removing the profit incentive from business. Some reports have said it will remove hundreds of millions of dollars of profit from the industry over just the next five-year period.

Well, there are dozens of companies with sufficient profile to establish open source as a real business, with some of these companies already acquired by a few of the Very Large Companies who are clearly fearful of not having a sufficient open-source strategy. But in the longer run, it has to be asked whether open source will be able to incubate any companies with a prayer of reaching the Fortune 500 class, something that traditional technology companies from Silicon Valley and elsewhere have achieved on a widespread scale over the past quarter century.

Whether or not open source is destroying traditional business, there is an even more serious side to the debate: a highly respected analyst with whom I spoke over the week-end says that open source is destroying technology as well. This person shall remain nameless for now (although I can show you the proof of the call from my next wireless bill), but his viewpoint comes from one who advises Fortune 1000 corporations on how they should deploy key subsystems within their IT infrastructures. “Do you want to fly on a plane running open-source software in its navigation system? Would you be comfortable in knowing the FAA is guiding it with open-source software? Do you want the DoD to start running open source?” he asks.

This analyst thinks open source has a tendency to drive expectations of what software can do downward. New, lowered expectations of how long and how much money it should take to develop applications is leading to lowered expectations for performance, too, he claims.

I told him to read all the content provided by SYS-CON’s LinuxWorld and Enterprise Open Source magazines more closely, and to take a chill pill and call me in the morning. But hand-in-hand with his observation is the idea that smaller, more agile development teams translate to smaller organizations over all—in this case without the benefits of higher effectiveness and efficiency that we’ve come to associate with “smaller is better” business philosophy over the past two decades.

What do you think? Do I sound like an old-line rust belt union guy, bellowing for more jobs while not identifying why, other than I just think we should have more jobs? Or is there something to this idea that Open Source, Ajax, and Web 2.0 are marvelous developments, each in their own particular way, but none of these trends is going to lead the former orchards of the Santa Clara Valley (or any other region) to a new era of significant job growth?

© 2006 SYS-CON Media Inc.

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