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These very large internet companies using, developing, and promoting open source technologies like crazies. What is the rationale behind promoting and developing open source tools and technologies rather than closed source software like traditional tech companies (Microsoft, Apple, Adobe)?

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@Gagandeep Please read the FAQ before asking a question. –  Mayank Mar 2 '11 at 6:19
@Gagandeep Also look at this programmers.stackexchange.com/questions/22809/… –  Mayank Mar 2 '11 at 6:21
Short answer: It's more profitable for them in the long run. –  NullUserException Mar 2 '11 at 6:24
Microsoft has also open sourced some of their stuff. –  user16764 Jun 26 '13 at 18:18

7 Answers 7

up vote 14 down vote accepted

It really depends on the project. For example one reason that Chrome is open source is to allow allow a larger community to improve the browsing experience, which in turn leads to more searches, which leads to more AdWords for Google. Android is open source because it leads to more installs, which leads to more apps on the Android market. Another reason is that it helps them to build a user base much quicker. They are much more likely to knock off proprietary (and/or paid) software market share by opening up their product and giving it away. This lets them chip away to become a platform for profitable services (app stores, ad serving, etc).

Some are a little less direct. Many companies will open source projects that aren't their core competency (i.e. facebook sells a service, not a database). These companies can open source to the community, who in turn also help to improve the products at no cost to the company. So the company benefits on getting better infrastructure needed to host their service which is the big money supplier.

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"For example the big reason that Chrome is open source is to allow faster browsing". Er... What? I don't see the relation between open source and faster browsing, and especially not it being "the big reason"? –  MetalMikester Mar 2 '11 at 12:40
@MetalMikester. Don't you? Google's mission with Chrome was to improve the browsing experience for everyone, including those using other browsers. Opening the Chrome source was a big part of that. –  TRiG Mar 29 '11 at 12:11

Commoditization of complements - Hardware is useless without software, so if your company sells hardware (like IBM or Novell), it's good for you if the software is free (as in beer) to the customers. The complement could be anything - Hardware vs. software, software vs. services, cars vs. fuel...

Chris Anderson's Free: How Today's Smartest Businesses Profit by Giving Something for Nothing explains some business models which fit nicely with this idea.

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Corollary: if you work in the software industry you don't want to open source anything –  Karl Mar 2 '11 at 10:32
Man, oh man, I would love a company that sells fuel to give out free cars ;) –  Rook Mar 2 '11 at 10:54
Or the other way around ;) –  Rook Mar 2 '11 at 10:54
I wish that companies that made analytical instruments understood this. They want to sell you a piece of hardware for $10k-$500k, with crappy control software, a proprietary interface, and undocumented data formats. You would think it would be to their benefit to make their instrument as useful as possible to as many people as possible, and giving away the software. Its not line its useful to anyone who hasn't bought the hardware. –  KeithB Mar 2 '11 at 18:54
Karl: What are you talking about? Lots of software industry companies (like Red Hat) are based on giving away their software and selling services: Training, installation, configuration, helpdesk, documentation, on-site tech assistance, you name it. –  l0b0 Mar 3 '11 at 9:34

Strategy letter V by Joel will best answer your question.

...A complement is a product that you usually buy together with another product. Gas and cars are complements. Computer hardware is a classic complement of computer operating systems. And babysitters are a complement of dinner at fine restaurants. In a small town, when the local five star restaurant has a two-for-one Valentine's day special, the local babysitters double their rates. (Actually, the nine-year-olds get roped into early service.)

All else being equal, demand for a product increases when the prices of its complements decrease...

...a lot of very large public companies, with responsibilities to maximize shareholder value, are investing a lot of money in supporting open source software, usually by paying large teams of programmers to work on it. And that's what the principle of complements explains.

Once again: demand for a product increases when the price of its complements decreases. In general, a company's strategic interest is going to be to get the price of their complements as low as possible...

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This works for a number of small companies I know of as well. The exact details vary, but the principle is the same. –  Donal Fellows Jul 15 '13 at 6:15

With open source these companies tend to create a bigger eco-system. It means more eye-balls to these sites and more $ revenues.

This is typically achieved by exposing api to the core site functionality.

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To match the mindset of their target audience

Can be one reason.

Products are usually open sourced to get external contributions. But in the case you mention, that could be to satisfy the crowd. It can be symbolic or simply to match the mindset of the audience.

Some products are more likely to be distributed as open source than others. Strategically it can be better to keep closed sources and for the same reasons (strategy) it is good to be open source.

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If you have a big extensible, core system on the Internet, and if there is a global community of developers willing to spend their valuable time extending the reach of your core system, it only makes sense that you would make the hooks into that system be open source.

The core of Google is search. This is of course not open source. But all of the tools that Google provides: Docs, Spreadsheets, Blogger, Calendar, etc, all have permissive, open source BSD licenses that encourage corporations to build their infrastructure on top of Google.

If people are using your services, it's much easier to get them to use other services you offer.

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Besides the economical arguments, pointed out by others, there are other incentives to promoting open source. After all these companies are run by people and people have other forces that motivates them than economical gain. I can imagine that as open source has gained influence, CEOs and other top level management will push for promoting open source regardless of the economical gain. Just because it is good.

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