Open source

Techgenesis & Co.© Stephen M. Patterson

Comparison of Open Source Software versus Microsoft on Regional Economics and Sustainable Competitive Advantages

Economic Effect of Open Source Software Industry on the EU


Microsoft Example

• Worldwide Annual Revenue $32B 30.6.2003

• EU Revenue $9BNote1

• Revenue from Germany ~$2.2 – 2.8B

• Microsoft Employment in DE 1,200• Contribution to German GDP $300M• Imbalance of Trade ~$1.9- 2.5B

Note 1: Estimate based on historical performance. Microsoft stopped publishing geographical breakdown of Revenue after 2002


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Industrial Development Example IBM Electronic

Manufacture in Taiwan

Industrial Development Example Microsoft in International Markets

Semiconductor Mfg

Automated Manufacture

Low Cost Handwork

Integrated Design and Mfg

Advanced Semiconductor Mfg

Integration and Applications Serving Small

Economic Segments

1960 Today

1984 Today

Comparison of Closed vs Open Innovations Systems


Economic Effect of Closed Systems of Software Innovation

• Qualified European Software Engineers are Under Employed or Un-Employed

• The Majority of Revenues are Exported Reducing the Capital Available to Stimulate Economic Growth in the Software Segment

• Closed Systems Inhibit Local Innovation and Decrease Competitiveness Reducing the Local Capacity to Export Software


Open Source = Open Competition

• “Open Standards” have Benefited EC – e.q. GSM and ISDN

• Competition within a Standard Levels the Playing Field

• Build on National Expertise and Expand through Existing Trading Relationships – Eastern Europe, Asia, Middle East

• As the Software Industry Matures its Balance of Trade and Vertical Integration Should Match Other Mature Industries, e.q. Automobiles, Aerospace, etc.


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Worldwide Open Source Based Industrial

Development

Systems Integration

Core System Design

Advanced Systems Tools and Utilities

Integrated Open Systems Architecture

Advanced Software Development Process Leadership

Time

Regional Technical and Trading Advantage Based Leadership Emerge


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Desktop Server

Time and Successful Implementation Experience

Relative Stage of Server and Desktop Development


Its all About the Desktop


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Dissatisfaction with Microsoft Licensing

EC will Lead in Large Scale Linux Adoption


Importance of Government Linux Projects

• A Government Can Measures Success on More than One Dimension, i.e. Economic Development, Workforce Development, Unemployment, etc.

• Government Procurement that React Locally and Personally to their Dissatisfaction with Microsoft will Prefer the Microeconomic Benefit and Measure Success Solely based on the Lowest Cost

• Government Procurements that Act Strategically will Prefer the Macroeconomic Benefit of Linux and will not Seek the Lowest Cost and Will Measure Success in Other Dimensions

• Government Projects Can Fail on Commercial Terms but be Declared a Success based on Social Benefits – Governments can make Policy that Invests in and Stimulates Open Source Development

Technology

Open source