Giving your core product away is certainly an unusual business strategy, yet some succesful software companies are doing exactly that

If you went to your bank manager and said you had a great idea for a business in which you gave away your core product to your competitors, it is likely you would be instantly shown the door and not just because of the credit crunch. Yet this is exactly what some of the most successful companies in the world are doing.

Red Hat, the company which spearheads the development of the Linux operating system, generated revenues of half a billion dollars in the 2008 financial year, the vast proportion of which was profit, while IT company, Sun Microsystems, spent $1 billion in February 2008 to acquire database provider, MySQL.

The common thread is that both Linux and MySQL are open source systems. So what is open source?

The core concept is that software developed in this way can be freely redistributed by others. Open source also guarantees open access to the software’s source code, the lines of programming that make up the application, to enable others to develop and improve it.

This may sound as though the evolution of open source software is a free-for-all, but the truth is far from it. The development of open source technology is usually overseen by some form of governing organisation, which determines the general direction the development takes and which improvements are included in new versions.

This organisation can take the form of a broad community of developers and users, as is the case with the Apache web server, or a dominant single company taking input from other companies and individuals, such as MySQL.

Martin Michlmayr, a former project leader for Debian, an open source operating system, argues: “Open source is not a lawless frontier at all. There are clear license terms that have to be followed, even though open source generally offers more freedoms than proprietary software. It’s true, that many organisations are still struggling to understand open source and its license terms. That’s why Hewlett Packard, together with other partners, started a open source governance community, FOSSBazaar, to share best practices.”

While the open source concept may seem unusual in a business sense, it is far from new, with Red Hat arguing that scientists and mathematicians have shared their discoveries with each other for centuries with the goal of pushing forward the entire pool of knowledge.

It is this culture of openness and transparency that open source supporters say enables applications to be developed far more quickly and at a lower cost than proprietary alternatives. Also, as open source software is freely redistributed, this can lead to a rapid uptake among a user base. Take, for example, the speed at which open source web browsers such as Mozilla Firefox and Google’s Chrome have been eating into Microsoft Internet Explorer’s domination of the sector.

However, it is not just individuals who are downloading and using open source software, businesses are embracing open source too. LinkedIn, the professional social networking website, started using MySQL to handle its database of more than 30 million people around the world last year. At the time, the company’s chief technology officer, Jean-Luc Vaillant, said that the “open and reliable environment” it provides saves the company both “time and money”.

According to John Newton, chief technology officer and co-founder of Alfresco, a provider of open source content management systems used by organisations as diverse as Islington Borough Council, the French Air Force and games maker Electronic Arts, the company’s software has been downloaded more than 1.5 million times. “It is probably the most widely used content management system from an open source perspective. We built the product, people try it and they may pay for it but they may not,” he says.

The company makes its money through providing around 1,000 enterprises with technical support, training or consulting services to develop their own applications using Alfresco as a platform.

Read More….

An open source to a brighter future? – Times Online.

They’re no Strunk and White, but Dom Sagolla and Adam Jackson are aiming to do for Twitter what “The Elements of Style” did for good writing on paper: outline elementary rules of usage, composition and grammar.

The bulk of the book, titled “140 Characters, A Style Guide for the Short Form,” will revolve around eight key lessons from the Twitter universe, such as the importance of simplicity, honesty and humor. The project will also highlight notable figures worth following on Twitter, anecdotes from the community and even examples of the few occasions Twitterers have gone overboard: For example, Mr. Sagolla points to “bathroom tweets,” or messages about bodily functions, as falling into the category of things not to post to Twitter.

“This is a new genre of writing,” said Mr. Sagolla. “A new form of literature, in some ways.”

A portion of the book will also double as a memoir from the perspective of Mr. Sagolla, who was involved in the early stages of development for the tool. Mr. Sagolla, who now works at Adobe Systems as an engineer, is also planning on including a mini-dictionary of Twitter lingo, like “retweet,” the reposting of another Twitterer’s message, or “twoosh,” a message that is exactly 140 characters.

The book came about after Mr. Jackson and Mr. Sagolla met after an informal gathering of iPhone developers and began chatting about Twitter. Mr. Sagolla decided to bring Mr. Jackson, who he said updates his Twitter feed as many as 10 times an hour, into the fold.

The two expect the book to be available for download on Apple’s iPhone by the end of the month. Although the plan is to eventually get a version of “140 Characters” in print, Mr. Sagolla said releasing the book through iTunes first would be a good way to reduce the need for a major investment upfront, as well as a springboard to attract interested publishing houses.

“140 Characters” isn’t the first book written about the popular San Francisco, Calif., micro-blogging company. There’s also “Twitter Revolution,” “Twitter Means Business” and “Twitter for Dummies,” for starters. But Mr. Sagolla says that while the previous publications tended to home in more on the business and money-making potential aspect of the tool, “140 Characters” is an attempt to create easy rules for all sorts of social networking sites, including Facebook.

“Our goal is to make Twitter applicable to any kind of user,” said Mr. Sagolla.

The Anatomy of a Tweet: Twitter Gets a Style Guide – Bits Blog – NYTimes.com.

This past weekend’s announcement by Facebook that the company would be opening up its APIs to allow for posting of notes, videos and more has left some companies scrambling to add new functionality to existing applications. Below we’ve highlighted a handful of the ones that let you post to Facebook from a desktop client, be it standalone or something that plugs into your browser.

We’ve talked to the people at each one to see when you should be expecting to be able to make use of the new API in each app:

“Blogo already supports Facebook status updates through its integration with Ping.fm,” says Benjamin Jackson, Blogo’s technical director. “As for more robust Facebook integration, you can be absolutely certain that we’ll be running to integrate this as quickly as possible. We’ll be shooting to send out a beta next week.”

Friendbar creator Edo Segal says “we love the fact that facebook [is] opening up more services,” and “definitely plan to include support for these API’s in upcoming versions.” Segal also says he wants a higher level of access to that data. “For example, to be able to post comments to users photos and status updates, and to directly send a Facebook message to a user via the API.”

Posting of notes through Ping.fm is up and running. “We’re still assembling some other ideas on how to use their new features,” says founder and CEO Sean McCullough. Worth a mention is that many of the services on this list go through Ping.fm to re-syndicate user messages.

“Sociagami has always been committed to deep integration with social networking sites like Facebook and Myspace and we will definitely be taking advantage of the new API features in 2.0,” says Charlie Robbins, director of social network integration for Sociagami. “Unfortunately, using an API based implementation will mean that Sociagami 2.0 will not have the messaging and wall posting features that came with 1.0.”

Working on it for an upcoming build. “The video part will be an important one!” says Loic Le Meur, CEO of Seesmic which acquired/owns Twhirl. The latest version, which was released on Monday added in Ping.fm support, letting you cross post messages to your Facebook profile.

“Yes, we are actively working on implementing the new Facebook API and rolling it out ASAP,” says Regan Fletcher, Yoono’s VP of business development. Our overall objective really is to maximize our use of the Facebook API in order to allow users who have added Facebook to Yoono to have the best possible experience and functionality.”

“It does look like some of this new functionality is available via the REST API which we use and we can run FQL queries (which we do),” says AlertThingy creator Clive Howard. “We will be revisiting this prior to the next version and if we can do then I’m sure it will make it into 3.x.” Version 3 of AlertThingy was released on Monday morning.
Apps that we pinged but have not yet responded: Flock, Feedalizr, Moodswing/blast, and Gwibber. We’ll update this post if we hear back.

Which apps are using the new Facebook APIs? | Webware – CNET.

(Credit: Compete.com)

The blogosphere simply loves to slurp up social-networking traffic stats, and on Monday we got a nice tasty serving of them with some new numbers from Compete.com for the month of January. The results? Facebook is in the lead, with about 68 million unique visitors, well ahead of MySpace’s 58 million. (The two are pegged at 1.1 billion and 810 million page views, respectively.)

This may be the first survey we’ve seen that puts Facebook ahead of the News Corp.-owned MySpace in U.S. traffic. It also puts Twitter as the third-biggest social-media site in the country by total page views, with only about six million unique visitors but a whopping 54 million views.

Compete’s numbers are interesting, because they often are pretty different from other analytics firms’. Here are some clarifications, explained to CNET News in an e-mail sent by Compete’s Andy Kazeniac: These are numbers stemming entirely from Web browser data in the U.S. That means that you won’t be pulling in any international numbers, where most of Facebook’s users are now, or data from widgets or third-party applications, which are how many avid Twitter users access the service. That means that it’s likely that Twitter’s reach is bigger than the numbers indicate.

What’s also intriguing is that there are a few social-media sites, like Flixster and LiveJournal, with relatively low unique visitor counts but proportionally very high page view counts, indicating that they probably have smallish bases of very loyal users.

Also pulling in notable numbers are LinkedIn, with about 11 million unique users, Classmates.com, with about 17 million, and Reunion.com, with slightly under 14 million. On the other end? AOL’s Bebo, an $850 million purchase, which Compete.com clocks in as having just shy of three million unique visitors. True, its biggest user bases are in the U.K. and Ireland, but that’s not good considering the price tag.

Still, statistics are like tequila shots. Always take ‘em with a few grains of salt and a slice of lime, and be warned that they may give you headaches.

Whee! New numbers on social network usage | Webware – CNET.