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Millionaires, Billionaires, and Open Source

May 7th, 2008 · 4 Comments

Thanks to a recent column by my friend Andy Patrizio, I found out that there’s “been an ongoing debate among bloggers and industry observers over one simple question: Where are the open source billionaires?” OK, I’ll buy that some people think that’s a real question, but I think it says more about they don’t understand the connection between software development genius and what it takes to become a billionaire.

My short answer is that the open-source billionaires are the same place where Tim Paterson (Quick & Dirty DOS) and Marc Andreessen and Eric Bina (Mosaic) are today: Doing well, to the best of my knowledge but they’re not in the Fortune 500. In case you don’t recognize those names, QDOS became MS-DOS and Mosaic became Spyglass Mosaic, which in turn, became Internet Explorer 1.0. We don’t ask though why they and their companies faded into relative obscurity and Microsoft and Bill Gates are worth more than most medium-sized countries.

Developers can make millions, even hundreds of millions, but technical brilliance almost never come with the business genius and/or amorality required to make billions. They’re really completely different skills sets. I can only think of one person—Steve Jobs—who is both a world-class technologist and businessman.

Getting to the question at hand, one reason why there are no open-source billionaires—yet—is that open-source companies are far more likely to make their money by being bought up an existing cash-rich technology company that recognizes the value of open-source projects rather than try to make their own mint. Sun and MySQL; Novell and Ximian and SUSE; and Yahoo and Zimbra are perfect examples.

The open-source developers become millionaires. The old-school hardware, Sun; software, Novell; and Internet, Yahoo companies take a major step towards open source. Everybody’s happy.

At the same time, some companies have become multi-billion dollar businesses by using open-source. Google, for example, couldn’t exist without its open-source infrastructure. If you look at that way, we already have at least two open-source billionaires–Larry Page and Sergey Brin.

Red Hat is the only open-source company that I can see making any of its people billionaires, but even then, it will be the top executives, not the developers, who make the truly big money.

You know what though? Thanks to my job, I’ve met quite a few billionaires—Bill Gates, Larry Ellison, and Steve Ballmer off the top of my head—and more than a few millionaires who count their millions by the hundreds. I also know numerous developers, system administrators, and network managers. Generally speaking the programmers and IT staffers are a much happier bunch than the filthy rich crew. Given a choice between billions and enjoying life, I’ll take a good, happy life every time.

Tags: Business · Open Source

4 responses so far ↓

  • 1 » What’s new today Millionaire Blog dot Info: …Information for Millionaires and ??? // May 8, 2008 at 12:30 am

    [...] Millionaires, Billionaires, and Open Source2 hours ago by sjvn   Thanks to a recent column by my friend Andy Patrizio, I found out that there’s “been an ongoing debate among bloggers and industry observers over one simple question: Where are the open source billionaires? … Practical Technology – http://practical-tech.com [...]

  • 2 Lennie // May 9, 2008 at 2:39 am

    If you count Google, can I just also suggest Mark Shuttleworth, he too wouldn’t have been able (or maybe not as easily) to have had such a successful comapny he could sell without Open Source/Free Software.

  • 3 Boycott Novell » Links 09/05/2008: GPL wins in court Again, 100% Free Software PC Finally Available // May 9, 2008 at 3:36 am

    [...] Millionaires, Billionaires, and Open Source [...]

  • 4 bilbophile // May 10, 2008 at 2:06 am

    To make an above average profit in a business there has to be an imbalance between supply and demand, i.e. at least a temporary/niche monopoly. In proprietary software, due to IP rights, once established such a monopoly can be maintained for as long as there is a demand (think not only of patents but also of lock-in etc.) with “normal” costs.

    In open source, a competitor can at any moment flood the market with virtually the same code, so defending or amending one’s “monopoly” (i.e. competitive edge) requires higher development costs/risks and accepting lower profit margins to raise the barrier of entry.

    Actually, free software was designed by experts (such as academia, consultants) specifically to prevent corporations from taking over their work and then outcompete them using IP rights. And you are right that while experts can never hope to become billionaires, they can have much healthier and happier lives than CEOs.