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Nov
18

The quest for more – when $20 billion isn’t enough

by Simon Brew

Simon Brew wonders if there are 20 billion reasons why the spirit of open source is being distorted…

This article is due to appear in issue 94 of Linux User & Developer magazine.The quest for more - when $20 billion isn't enough Subscribe and save more than 30% and receive our exclusive money back guarantee – click here to find out more.

Over $20bn. Twenty billion dollars. It’s an unquantifiable amount of money, which, were it to be delivered in cash, would surely result in the closure of a couple of motorways just to get it from A to B. It’s also the kind of money that’d fill a couple of buildings, and surely require half the staff of a bank to count out.

$20bn. That’s got to be enough cash for anyone, right? Er, no. As it turns out, no it isn’t. For in announcing its last set of quarterly results, Apple declared that its quarterly revenues had eclipsed the $20bn mark in just three months, of which a staggering $4.31bn was profit. You do the maths – $4.31bn of straight profit in under 100 days is surely enough to pay for anybody’s Christmas party.

And yet it wasn’t enough. For in spite of delivering staggering amounts of cash, and in spite of reporting sales rises in all of its key product areas, Apple’s share price instantly fell. In simplistic terms, it felt as though the markets were declaring that $20bn wasn’t enough, and they wanted more. That wasn’t strictly the case, of course, as there are longer-term concerns as to just how well Apple can keep its winning streak going, and as to whether it’s about to hit saturation point. But still, it looked like a bizarre reaction to what should have been really quite good news.

But that, in a nutshell, is the value and importance of modern-day software. For that’s where Apple has really scored over the past years. Look across the iPod, the iPad, the Mac line of computers and the iPhone, and in each case the firm stood on the shoulders of those who had been dabbling with the likes of MP3 players and tablet computers, and adapted them. Granted, part one of that makeover was in the physical design of each of its products.

But it’s software that’s been the killer. The interface, the operating system, the layout, the perceived simplicity of it all. There’s no company on the planet that has managed to sell it better than Apple. That Apple story, however, highlights 20 billion threats to open source software right there. Appreciating I’ve highlighted this before, it’s software where the major money is to be made in computing. Particularly with cloud computing models pushing the idea of software as a service, all of a sudden purveyors of office software and operating systems are dreaming of World Of Warcraft-esque revenues. Apple no doubt among them.

I wonder if it’s this that’s led to the splintering away of LibreOffice from the OpenOffice software suite. This is a story that many of you will no doubt already be familiar with, but it has shown the increasing value attached to open source solutions. And thus we have a situation where many of the brains behind OpenOffice.org are now working on LibreOffice. Meanwhile, Oracle is pushing ahead with OpenOffice as well, potentially and probably putting the two into competition with one another.

It’s clearly a more complicated story than I have put across here, but I do wonder if an attitude in modern-day computing that suggests that $20bn of revenue is enough to inspire a share price drop has brought us here. Because money, for better and worse, is an increasingly prevalent and important factor in the software market, and open source is no exception. It’s that that’s surely at the heart of why the spirit of open source is being distorted in the pursuit of money. For better or worse, at least you know what you’re getting with Apple…

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    • wally

      But Apple, clearly, is selling into a very limited – in world terms – luxury market. There are 6 billion people and only a tiny fraction of them own, or will ever own, an Apple product. They cannot move out of that market without a drastic revamping of their whole corporate essence. They may make cash off that market, but it is also their limit. They may be very innovative in a limited product range. but that’s it.

      If AT&T was still an American monopoly we would not have cell phones today. If Standard Oil still owned all the wells we would not all have cars today. As long as computer software comes through two limited proprietary channels, it will never be available to everybody.

    • Pingback: LXer: The quest for more – when $20 billion isn’t enough - oBlurb

    • http://maths.com Do

      Do the goddamned maths. If it was shipped in US $1 notes (bills), this would be a stack 27x27x27 m. “A couple of buildings” — no. More reasonably, it would take a 5x5x5 m^3 volume of $100 bills. You could stack this into a single large truck.

    • Roger

      What worries every Apple stockholder isn’t limited number of people who can buy their products. They worry about being left holding stock when the magic runs out. Their Steve retires or dies. Do they have able replacement ready this time or will they end up with a Steve Ballmer or worse?

    • Carling

      Short term it’s good, long term the outlook signs are not that bright, with all the advents of Android phones, pads, pods, notebook and netbook systems hitting the streets, that can do a darn sight more than apple products,

      Bill Gates and Steve Bullmer defend their Stock sales, dumping millions of Microsoft shares last month and are going to dump more by the end of the year,
      http://news.yahoo.com/s/nm/20101116/bs_nm/us_microsoft

      Linux open source software is hitting MS hard and it will do the same with Apple,

    • Rufus Polson

      Well, on one hand I do think that the insistence on more, no matter how much they have already, is epidemic these days and has led to crippling economic problems.
      I don’t see what that has to do with LibreOffice, though, or in what sense LibreOffice could be considered a distortion of the spirit of open source (or of Free Software, for that matter). It’s a fork caused by dissatisfaction with the way the OpenOffice.org project was being run–fairly justified dissatisfaction in my opinion, but whether justified or not that’s surely the essence of software freedom: The ability to make one’s own changes and redistribute. That’s what the GPL, LGPL etc are all about.

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    • http://reddeadredemptioncheats.com Red Dead Redemption Cheats

      You see, I do have a Windows 7 installation on one of my PCs. And I have a Windows 7 installation for two reasons.
      One, that I like to play Blu-rays back, which are protected by the overlords at Sony and their magical game of “we’re not sharing our ball with you”. Two, I like to play games. Really big games. Crysis-esque games.