You'd be wrong.

Quietly, over the past two years, open-source software has made an enormous difference in the way businesses operate. It's already deep in the Internet. More importantly, though, smart companies are finding ways to use open source directly. They're building better products faster--and more cheaply--than they ever could before. If you're not at least thinking about doing that yourself, you could be in trouble.

Closed-source software is the kind that most people know best. For decades, software companies have shipped their products on tapes, floppy disks and CD-ROMs. People can install and use those programs but cannot change them or fix them. The human-readable version of the software--the source code--is jealously guarded by the software maker.

Open-source software allows anyone to see the human-readable source code. The open-source movement began in the 1970s at research laboratories. Researchers who wanted to collaborate on projects needed to share their source code with one another. Today, open-source developers collaborate with peers around the world. There are open-source operating systems, Web servers, mail systems, databases and more.

You may hear--usually from someone with an ax to grind--that open-source software is less secure or less reliable than closed source. This isn't true. Gartner, for example, recommends the open-source Apache Web server as a much more secure alternative to Microsoft's closed-source Internet Information Server. Open source lets engineers around the world examine the code for security flaws and other bugs.

Open-source licenses
Many people have heard that all open-source licenses are the same, and that open-source software infects everything around it, destroying all the proprietary value in a company's intellectual property. In fact, there are many different licenses. Some allow commercialization for free. Many work quite well with proprietary licensing strategies.

The tech collapse doomed a lot of great open-source companies in 2001. In retrospect, it's not clear that open-source companies fared any worse than their closed-source peers over that period.

The two most common licenses are the General Public License, or GPL, and the Berkeley Software Distribution, or BSD, license. The GPL allows anyone to use, change and share the source code. If you make changes, though, you must share them freely. The BSD license, by contrast, allows you to keep your changes private.

There are also hybrid strategies. For example, some companies, like mine, make software available under a GPL-style license for free. Customers who cannot give their own changes away for competitive reasons can pay for a different license and can keep those changes private.

Who benefits?
When the business community first started talking about open source, the big question was how an open-source company could possibly turn a profit. Two years later, there are a number of profitable, successful open-source companies. Open source hit the big time at exactly the wrong moment. The tech collapse doomed a lot of great open-source companies in 2001. In retrospect, it's not clear that open-source companies fared any worse than their closed-source peers over that period.

You may hear--usually from someone with an ax to grind--that open-source software is less secure or less reliable than closed source. This isn't true.

That question, though--how can vendors profit from open source?--was the wrong one to ask. The important question is, how can customers profit from open source?

If your company runs its own mail and Web servers, you're a big consumer of software. There are great open-source packages out there that you can use to provide those core services reliably and inexpensively. The big Internet service providers or Web portals and search engines, like Yahoo and Google, run a major part of their operations on open-source packages. If it works for them, it can work for you.

Open source is here to stay. It's a valuable tool, and you should learn how to use it. You can be sure that your competitors will.

 
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on the soapbox
Michael A. Olson is president and CEO of Sleepycat Software, the developer of the open-source Berkeley DB, an embedded database engine.