Open Source- Not just for building software anymore

The Economist has an interesting article on the evolution of open source businesses and business models. Here’s an excerpt:

The “open-source� process of creating things is quickly becoming a threat—and an opportunity—to businesses of all kinds. Though the term at first described a model of software development (where the underlying programming code is open to inspection, modification and redistribution), the approach has moved far beyond its origins. From legal research to biotechnology, open-business practices have emerged as a mainstream way for collaboration to happen online. New business models are being built around commercialising open-source wares, by bundling them in other products or services. Though these might not contain any software “source code�, the “open-source� label can now apply more broadly to all sorts of endeavour that amalgamate the contributions of private individuals to create something that, in effect, becomes freely available to all.

The key takeaway for most people here is that this is not just about open source software. It is about how people are leveraging the products of open source and the nature of these communities and products to create new business models. Never in the history of the software industry has it been easier to create a new business in a relatively short period of time based largely on the efforts of community-driven software development and the development of standards that make it easier to build new software and services that do a great job of leveraging tools and other services that are already available. Now if we can see more proof that people will pay for these services, allowing entrepreneurs to focus on business models other than being funded by ads, I’ll be much more confident that we’re not in the midst of a large bubble.