The Wall Street Journal and the San Francisco Chronicle have both written about how high tech companies in Silicon Valley are being much more frugal with investors' money than during the internet boom of the late 1990s. Not surprisingly, just about every startup I know is using open source, whether it's well known companies like Digg, FaceBook, Linden Lab, or newer entrants like YouSendit, Soonr, YouRock or literally hundreds of others. Open Source works great, it runs fast on low-cost Intel and AMD hardware and developers are excited by it.
Joe Kraus, the CEO of JotSpot has often talked about how much cheaper it is to create a startup today than previously largely because of the lower cost of hardware and open source software. He estimates that it took Excite around $3,000,000 to launch compared to $100,000 for JotSpot:
"In the 10 years between Excite and JotSpot, hardware has literally become 100X cheaper. It’s two factors – Moore’s law and the rise of Linux as an operating system designed to run on generic hardware. Back in the Excite days, we had to buy proprietary Sun hardware and Sun hard drive arrays. Believe me, none of it was cheap. Today, we buy generic Intel boxes provided by one of a million different suppliers.
"Back in 1993 we had to buy and continue to pay for maintenance on everything we needed just to build our service -- operating systems, compilers, web servers, application servers, databases... Compare that to today. Free, open source infrastructure is the norm. Get it anytime and anywhere. At JotSpot, and startups everywhere you see Linux, Tomcat, Apache, MySQL, etc. No license cost, no maintenance."
This is pretty obvious for technical CTOs, but it's nice to see the trend start to get coverage in the mainstream press. As the reporter from the Journal pointed out:
"Aiding today's trend of start-up parsimony are factors such as cheaper technology. While start-ups once spent millions of dollars on expensive computers and software, many new companies can now instead exploit inexpensive server systems, open-source programs (modifiable software that comes in free or inexpensive versions) or Web-based services to build and launch their products.
Why spend money on expensive proprietary software when open source is better in most cases? It's a good question and one that I think will be increasingly on the radar for executives and board members, not only in startups but in large companies. If open source is good enough for the giants like Google, Yahoo, Sabre, Nokia, Alcatel then why not elsewhere?