Outsource with open source technologies

In the closed-source world, the market encourages duplicate efforts. Lotus creates and sells a spreadsheet, Borland creates and sells a spreadsheet, Microsoft creates and sells a spreadsheet... you get the idea. Each vendor can differentiate their product and make a profit. Vendors keep their source code closed, so each company must create their own spreadsheet from scratch.

The open source world is different. There is no need to create a competing product from scratch. The Libre Office project includes a word processor and a spreadsheet (among other things) and it is open source. If I wanted to create a competing spreadsheet, I could take the code from Libre Office, modify it (a little or a lot) and redistribute it. (The catch is that I would also have to distribute my modified version of the source code.)

Rather than build my own version with private enhancements, it would be easier to suggest my enhancements to the team that maintains Libre Office. With private enhancements, I have to make the same changes with each new release of Libre Office (assuming I want the latest version); by submitting my enhancements (and getting them included) they then become part of the product and I get them with each update. (Of course, so does everyone else.)

Open source is not "one solution only". It has different software packages that exist in the same "space". There are a multitude of text editors. There are different display managers for Linux. There are multiple windowing systems. One can even argue that the languages Awk, Perl, Python, and Ruby all compete. There can be competing efforts in open source.

The closed-source world does not always provide competition. It has settled on some "winner" programs: Microsoft Word for word processing. Microsoft Excel for spreadsheets. Photoshop for editing pictures. Competitors may emerge, but the cost of entry to the market it high.

In general, I think that the overall trend (for closed source and open source) is to move to a single package. The "network effect" exerts a gentle but consistent pull for a single solution in both worlds. The open source market falls quicker than the closed-source market; for-profit vendors have more to gain by keeping their product in the market. They resist the tug of the network effect.

Open source becomes a more efficient space. With fewer people working to create similar-but-different products, the open source world can work on a more diverse set of problems. Or it can invest less effort for the same result.

Many companies invest effort in core competencies and outsource non-essential activities. Open source may be the cost-effective method for those non-essential activities.