The quest for more – when $20 billion isn’t enough
Simon Brew wonders if there are 20 billion reasons why the spirit of open source is being distorted…
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…