Marten is such a fantastic person and speaker. He's in the middle of his keynote ("Why Freedom Makes a Better Business Model"). [Slides here.] Marten is taking an interesting spin on open source, suggesting that freedom is the best business model, and not just in software: eBay frees trade; Google does the same for advertising; YouTube for video production; Skype for telephony. And so on. The world, according to Marten is such a fantastic person and speaker. He’s in the middle of his keynote (“Why Freedom Makes a Better Business Model”). [Slides here.] Marten is taking an interesting spin on open source, suggesting that freedom is the best business model, and not just in software: eBay frees trade; Google does the same for advertising; YouTube for video production; Skype for telephony. And so on. The world, according to Marten, is changing.Freedom is not just about a product, either. It’s about who builds them. Our current information society was built by a few hundred thousand developers. Today, ~30 million developers are building the Internet, and they no longer look like white male America/Europe. Technology is being freed from its cultural and demographic limitations.All well and good, Marten says, but where is the money? Marten suggests that there are a few ways to make outsized profits in software:Innovation (Google, Adobe, Checkpoint); Network Effects (eBay, Google); Scale of Vendor (Microsoft, Oracle, SAP); and Lock-in (Oracle, Microsoft)Open source offers the first three in spades, and liberates customers from #4. In fact, Marten suggested that open source can do the first three better than proprietary software companies. All open source companies have the opportunity to innovate, and a smaller segment (currently) have network effects (Mozilla, MySQL, Red Hat, Ubuntu/Canonical). Today we only have Red Hat on the scale side, but tomorrow we should have more. And, as Marten pointed out, open source can be very successful without having the whacky outsizes profits of yesteryear. The 1980s/1990s were a heady time for software, but just because software delivered historically whacky returns then does not mean they will or should going forward. Customers are smarter now. They won’t be duped into buying willy-nilly again.The key for a vendor is differentiation. Open source is no longer a differentiator. Open source, according to Marten, is not a business model. It’s a method of production and distribution. It doesn’t grant anyone a business model. I see (and grant) his point, but I do think he’s perhaps understating that the minute you opt for open source, you enable and disable certain business model possibilities. So, while not a business model in and of itself, it does nudge the vendor one direction or another.Marten explicated the business model MySQL uses: the software is free, the service is not. If you want hot fixes, service packs, 24/7 support, a knowledge base, etc., then you pay MySQL. If you just want the database, then you take it under the GPL and do with it whatever you want. Marten suggested that a few open source business models have legs:Mozilla’s (sell ads) Red Hat’s (sell services around a binary) Sugar’s (sell proprietary extensions to open source software) Dual-license (charge a fee for dropping open source into a proprietary product).Marten is both idealist and realist at the same time, which comes out in his list above. A great keynote, and great insight. Open Source