26 November 2006

Competing Business Models

Twit.tv pointed me to this article about Himachi, a peer to peer VPN system which was aquired by LogMeIn.

I like the concept of Himachi a lot but was hoping that it would go open source. Keeping it closed however made it a more likely target for a buyout.

Many of the companies using a 'software as a service' business model keep the software that drives their service proprietary, giving them a competitive edge and providing a barrier to entry. So, although much of the proprietary software that we run on our own computers is becoming obsolete, the software that powers 'software as a service' is far from obsolete and is usually far from open.

It's also interesting that in most cases these proprietary systems are implemented with open source software.

One of the most compelling reasons to use Open Source software is the quality of the code, especially when it comes to security feautures, which is why I thought Himachi offering, was ultimately doomed. I wouldn't run it or recommend it because it was proprietary and for that reason I wasn't confident that it wouldn't be vulnerable to hackers. The fact that it wasn't open source became a barrier.

So, open source is very compelling as a way to get your project noticed and used, but, if you are writing software that you ultimately want someone to "aquire" then proprietary still has a lot of appeal.

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