Thursday, July 31, 2008

Open Source vs. commercial development

I am a bit fan of OpenSource products.

Unlike others I'm not very political about it and I belong to the category of people who prefer something like an Apache or BSD licence over a the GPL licences. In fact I'd love to produce code straight into the public domain, it's just the idea of being sued over it that stops me from doing that.

But that's not the point of this post, it is just setting the tone. The point I will try to make is why I believe OpenSource products tend to be better and how that can actually be applied to commercial development. I will start with the dual question: why do many commercial products evolve into something hardly anyone likes anymore?

I believe a main problem with commercial development is the business model of selling a new version every N years. The way you get someone to pay for a new version is to convince them that the new version has new features that are worth the price. Therefore from a business perspective your main goal has to be developing new features that can sell this new version. This is quite a different goal from fixing problems with the existing codebase or adding robustness. It is not suitable for designing a good user interface, either -- that might involve removing features or redesigning the existing ones. But any changes to existing features (including bugfixes) will make your customers ask why you didn't do that in the first place and they will not be happy to pay for the change.

Overall this busines model leads to featuritis: features start being added for the sake of adding features, not for the better of the product as a whole. In the first few versions of a product this effect will not be too visible since there will be genuinely useful features to add and the overall complexity of the product will not be too big yet. But with every new version it will get harder to find new useful features to add and to find a spot where to put them in the user interface. After a decade or two you get a product that looks like MS Word and similar programs.

While featuritis can easily be a problem for an OpenSource product (adding new features is more fun, so people tend to do that), the commercial world suffers from an additional problem: there is not much incentive to fix issues with the existing feature set. The only incentive is avoid annoying your customers so much that they don't buy the next version or other of your products. But quite often it is easier to fix that by marketing approaches particularly if the buying decision lies not with the actual user.

Again: OpenSource can suffer here, too. The incentives for fixing bugs can be low in an OSS project, but that is not necessary. In many projects fixing a long-term bug creates a lot of respect and thus creates incentive of doing this. Additionally the feedback options for users are much better and developers tend to see negative feedback of users through forums, mailing lists and issue trackers. This is another way incentives to fix problems are created: the developers might decide to fix the problem either to be nice to someone who is asking or to just to stop them from creating more annoying comments. Either way, the problem will be fixed.

Compare this to many commercial off-the-shelf products, where user feedback is often indirected through multiple levels of support and filing a problem directly is not even an option (I have a bug that crashes Visio and is easy to reproduce if someone is interested). Of course it is in the best interest of the company not to allow this direct feedback since the developers are supposed to create new features to sell the next version of the product. But it means that the developers are detached from the user's perspective on the product they are creating.

So is this a problem with all commercial software product development? Not really: the problem really lies with the business model. The way out for commercial development is to use a subscription model where people do not pay for versions but pay a regular fee that includes support and upgrades. That way the pressure for new features is lower: if the customer stays happy with the existing version you have a constant income flow. Since support is included in the offer, incentives to solve existing problems are now introduced. Any problem that stays in the code creates support requests, which creates cost. Fixing the problem not only makes the customer more happy (thus increasing the chance they stay on the subscription), it also reduces support costs.

Quite a few smaller companies use this business model successfully. Sadly companies like Microsoft find themselves unable to change. While I strongly believe both Microsoft and their customers would win by changing the model, no one is willing to pay a subscription fee for products they already bought licences for, even if the costs are equal or less to their usual upgrade costs over the long term.

I believe there are also some other advantages OpenSource development has, but in my opinion this is one of the most relevant. There are others such as the low entry barrier (no buying decision needed) and the fact that some people just don't want to pay for software. But if you care about good quality products and are happy to pay for them, then looking at the business models of the commercial vendors makes sense; comparing those with the support options found for the OpenSource products.


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