Open Source – essential to success?

I have long been a proponent of open source. The power of the community, the technical prowess required to take full advantage of it and the many successful eBusinesses built on top of using it (as opposed to producing it) seem to indicate that Open Source is indeed essential to success. But the argument is a difficult one: there are also successful eBusinesses built on closed source platforms. Indeed, the majority of the UK’s eBusiness community seems quite happy revolving around Microsoft’s .NET offering. Are they, as I perceive it, making the best of a bad choice, or is the decision between Open Source and closed platforms really not relevant to success?

PayPal‘s Matthew Mengerink has written a delightful piece where he contends Open Source is indeed key to PayPal’s success. In it, Matthew says:

The benefits our developers get from being able to work in the same platform as the production environment cannot be overstated. Open source environments are not as expensive to recreate as proprietary ones, and being able to work in a live environment enhances efficacy by an order of magnitude.

Beyond the hair-raising statement about working on a live environment -sure to make more than one enterprise architect turn the page- Matthew puts a solid business case for Open Source.

Matthew contends that the economics cannot be beaten: the low level of investment required enables PayPal to grow at pace. Also, more importantly, it allows PayPal to innovate at a low cost and breakneck speed, as price is not a constraint to the number of innovation projects -experiments, as he calls them. The environment, he says, turns into a developer’s playground, the outcome going straight into PayPal’s oversized bottom line.

Matthew goes on to talk about flexibility. Open Source’s nature is like that of Lego blocks – community groups working on individual projects that can be integrated by service providers into unique offering with little effort . Wide prior availability of software to do almost anything contributes to speed of execution, while the ability of the project team to replace individual blocks enables future proofing and continuous improvement.

Finally, Matthew touches on the importance of security. At PayPal, they have modified the kernel of the Linux OS to add extra security features not found in the standard distribution they use, RedHat. Not having to depend on vendors releasing patches for known bugs is great peace of mind.

Matthew is probably a programmer, and his analysis of the advantages of Open Source over closed competitors is spot on. However, I think he leaves out the best advantage of all. The one argument that demonstrates that Open Source is indeed essential for success: by having access to the source code of every piece of software, from the OS up -and to skilled programmers able to tinker with it- PayPal achieves the Nirvana of any eBusines: complete control over the user experience. PayPal doesn’t rely on 3rd parties providing ways to interact with its own customers. PayPal’s programmers cannot hide behind a supplier when asked to make their site accessible, to improve usability, to refine ad infinitum the transactions on the site, to add functionality on a tight schedule.

Open Source gives PayPal that rarest form of competitive advantage: control. With it, they’ve taken to change the world, redefining financial services for consumers worldwide. Banks, insurance companies and the rest of the eBusiness world better take notice.

Leave a Reply