ON LAMP -- Tim O'Reilly is making the rounds, asking what it means that Google, eBay, and Amazon.com are the new killer apps. He repeats Clayton Christensen's quote that "Free and open source software is the Intel inside of the next generation of software applications--or is it?" According to Christensen's law of conservation of attractive profits, the value simply migrates to adjacent levels.
Building computer hardware has become a commodity business with lower margins. Value has gone "up the stack to proprietary software. At the same time, Intel showed that there was an opportunity to push value down the stack as long as you build a critical component that the next layer depends on. So the value was pushed out of the middle layer of building computers to the adjacent layers of software such as the Windows operating systems, Office, and to hardware components such as Intel chips."
Daniel Steinberg reacapped O'Reilly's argument.
Instead of a stack that is capped by Linux and Open Office, we have another stack to consider with LAMP and similar open source software components occupying the middle. The value has once again moved to adjacent layers. Looking up the stack, eBay, Google, Amazon.com, and Mapquest are all building proprietary software on top of open source foundations.
Several of these applications have found a way to get users to create data that is used on their sites, which leads to lock-in by network effects and not by API. There are more than ten million user reviews on Amazon. That's not really software but the added value here is the data. Tim asked, once there's a critical mass of buyers and sellers why go somewhere else? In this grouping, the "Intel inside" position is occupied by Network Solutions, which controls domain names. All of the mapping applications are built on top of Navteq.
So the platform is the environment--the Internet or the social network. While applications on top might be Open Source, the implementations themselves might cost. As I often explain to the unitiated, if we want to advance the cause of Open Source Software in the classroom, we have to embrace a holistic model When we implement Moodle, we need to concurrently build a participatory level around both the Virtual Learning Environment and the academic content. This is similar to what eBay and Amazon have done with data.
Daniel Steinberg -- "O'Reilly Radar: OSCON 2004"
Paul Ford -- "August 2009: How Google beat Amazon and Ebay to the Semantic Web"