Long Term Impact of Open Source

There has been a lot of debate surrounding open source and proprietary software. Some of the big established software companies have tried to convince governments and executives that Open Source will be the demise of revenue generated via software. I don't think they (or anyone else) actually believes this. A few members of the U.S. Congress may be an exception to this. It is merely an attempt by corporations to milk their current software products as long as possible. I don't think Open Source is really all that radical. It does challenge the status quo of the software industry however. The software industry is no different from any other tech market. As technology advances, some products become a commodity. This was true long before RMS started his crusade. If your product becomes a commodity it does not mean your business is doomed. You simply have to move higher up the food chain to add value elsewhere, or structure your business such that you can make a profit selling a commodity. I think that over the long haul, open source will precipitate several changes in the software industry:

• The time it takes for a particular software technology to reach commodity status is greatly reduced. This is especially true for middleware. Examples include tomcat, jboss, omniORB, etc. In the future, a product's market dominance will be measured in months, not years.
  
• Increased competition will lower the profit margins. This has already happened for operating systems and database products.
• Some markets will be completely overtaken by open source. Look at the market share that Eclipse is gaining in the IDE space. This takeover is also beginning to happen in the J2EE Appserver market.
  
• The barriers to market entry are reduced. Complex apps can be built faster and cheaper by taking advantage of open source middleware components. A result of this will be a proliferation of small startups filling niche markets.

Ultimately, the net effect is increased competition across the board...better, faster, and cheaper.