Comments on: Could investor short-termism undermine open source? http://blogs.the451group.com/opensource/2008/05/13/could-investor-short-termism-undermine-open-source/ A blog for the enterprise open source community Tue, 07 Oct 2008 15:58:03 +0000 http://wordpress.org/?v=2.5.1 By: 451 CAOS Theory » Sometimes a developer community isn’t the answer http://blogs.the451group.com/opensource/2008/05/13/could-investor-short-termism-undermine-open-source/#comment-271422 451 CAOS Theory » Sometimes a developer community isn’t the answer Wed, 27 Aug 2008 19:19:46 +0000 http://blogs.the451group.com/opensource/?p=792#comment-271422 [...] won’t go into the latter now, but the threads are there to be joined [...] [...] won’t go into the latter now, but the threads are there to be joined [...]

]]> By: 451 CAOS Theory » Asking the right questions of open source http://blogs.the451group.com/opensource/2008/05/13/could-investor-short-termism-undermine-open-source/#comment-268038 451 CAOS Theory » Asking the right questions of open source Mon, 18 Aug 2008 11:15:04 +0000 http://blogs.the451group.com/opensource/?p=792#comment-268038 [...] is definitely a ‘glass-half empty’ look at the world. Although I have previously noted that open source vendors need time to thrive I believe the VCs that understand open source [...] [...] is definitely a ‘glass-half empty’ look at the world. Although I have previously noted that open source vendors need time to thrive I believe the VCs that understand open source [...]

]]> By: Matthew Aslett http://blogs.the451group.com/opensource/2008/05/13/could-investor-short-termism-undermine-open-source/#comment-219465 Matthew Aslett Tue, 13 May 2008 15:42:53 +0000 http://blogs.the451group.com/opensource/?p=792#comment-219465 Thanks for the insight Dennis - good point regarding the need for a control group. Thanks for the insight Dennis - good point regarding the need for a control group.

]]> By: Dennis Byron http://blogs.the451group.com/opensource/2008/05/13/could-investor-short-termism-undermine-open-source/#comment-219464 Dennis Byron Tue, 13 May 2008 15:38:06 +0000 http://blogs.the451group.com/opensource/?p=792#comment-219464 Matthew, Mr. Alexy's paper probably should be titled "Newly announced open source licensing terms and conditions have same effect on share price as any other new product announcement." For starters, this 1.6% change he found sounds pretty negligible (IBM moved from $100 to $101.6?). More important it is probably no different a share price movement than that for any company in any industry (not just software sold without open source terms and conditions). The key ingredient in his plus/minus analysis is the promise by the companies "of an explicit revenue model" short term, not the license terms and conditions. I bet he would get the same results comparing public soap, TV, or razor blade companies that offer a short term revenue hit from a new product vs. those that don't. His control group could have been what happened to the share prices of software companies that do not use open source terms and conditions after they announced new products and said there would be short-term revenue gain from the product. But that would be a hard group to find because most of the leading publicly traded software companies already offer products with open source terms and conditions. Among institutional investors, open source terms and conditions are not a big differentiator (they love the development model though because it has held down R&D expense for commodity functionality). They are punishing Sun becasue is not thought of as a software company (rightfully) and yet it says it is going to take on the third largest software company, Oracle, directly. As you say, that's not a short term revenue play. Matthew,

Mr. Alexy’s paper probably should be titled “Newly announced open source licensing terms and conditions have same effect on share price as any other new product announcement.”

For starters, this 1.6% change he found sounds pretty negligible (IBM moved from $100 to $101.6?). More important it is probably no different a share price movement than that for any company in any industry (not just software sold without open source terms and conditions). The key ingredient in his plus/minus analysis is the promise by the companies “of an explicit revenue model” short term, not the license terms and conditions. I bet he would get the same results comparing public soap, TV, or razor blade companies that offer a short term revenue hit from a new product vs. those that don’t.

His control group could have been what happened to the share prices of software companies that do not use open source terms and conditions after they announced new products and said there would be short-term revenue gain from the product. But that would be a hard group to find because most of the leading publicly traded software companies already offer products with open source terms and conditions.

Among institutional investors, open source terms and conditions are not a big differentiator (they love the development model though because it has held down R&D expense for commodity functionality). They are punishing Sun becasue is not thought of as a software company (rightfully) and yet it says it is going to take on the third largest software company, Oracle, directly.

As you say, that’s not a short term revenue play.

]]> By: Could investor short-termism undermine open source? | Guide Open Source http://blogs.the451group.com/opensource/2008/05/13/could-investor-short-termism-undermine-open-source/#comment-219461 Could investor short-termism undermine open source? | Guide Open Source Tue, 13 May 2008 15:15:41 +0000 http://blogs.the451group.com/opensource/?p=792#comment-219461 [...] Paul Fremantle wrote an interesting post today onHere’s a quick excerptWhen we write about investors on this blog we are normally referring to angel and VC investors and the funding they provide to open source start-ups. There is a small, but growing, list of VCs that clearly understand the open source … [...] [...] Paul Fremantle wrote an interesting post today onHere’s a quick excerptWhen we write about investors on this blog we are normally referring to angel and VC investors and the funding they provide to open source start-ups. There is a small, but growing, list of VCs that clearly understand the open source … [...]

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