Open Source and the Financial Meltdown

by Sam Dean - Oct. 08, 2008Comments (12)

Dana Blankenhorn makes some good points in a post from today titled Open Source in a Time of Recession. One of the better points is that, despite the incredible turmoil in global markets and economies, we actually haven't met the official definition of a recession yet here in the U.S., which would be two consecutive quarters without economic growth. Nevertheless, the financial gloom and doom we're seeing will cause constricted business spending on software, and open source stands to benefit from that in several ways. There may also be some unexpected events in the works.

As Blankenhorn points out, and as others have been predicting, consolidation is very likely in the technology industry itself. Technology stock indexes are lower now than they have been in four years. Companies with big cash reserves are likely to be on the lookout for inexpensive acquisitions.

I noted that Bill Gates said this past Sunday that there will definitely be no depression and no major recession as a result of the current crisis. "It's a very interesting crisis," he said. That's how you react when you have tens of billions of dollars.

Dan Farber found Gates' comments overly optimistic. "A hacker or terrorist hoping to destabilize economies couldn't have done a better job than the financial industry itself," he writes.

While lots of open source analysts are emphasizing that businesses will increase their adoption of FOSS amidst this turmoil, there will be more impact on open source than just that. We wrote here, prior to the current financial disaster, that many people are speculating about a possible Oracle acquisition of Red Hat.

Red Hat has been delivering solid financial performance for several quarters now, but its stock has plummeted in the past six weeks. Here, Matt Asay expresses concern that an acquisition of Red Hat by Oracle or another big company could mean the end of independent open source.

I tend to think Blankenhorn's analysis is right on the money. Previous recessions and meltdowns have brought huge upswings in the technology industry overall. "The PC boom emerged from the bottom of a recession in the early 80s, and the Internet boom from another in the early 90s," Blankenhorn notes.

This time, open source is likely to have the wind at its back as the markets pick themselves up and dust themselves off. There will be increased adoption and extension of top open source products, as we saw with the NTT and PostgreSQL news yesterday. There are likely to be acquisitions as well. One thing's for sure: Things aren't just going to stay the same.




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12 Comments
 

What Recession?

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One of the better points is that, despite the incredible turmoil in global markets and economies, we actually haven't met the official definition of a recession yet here in the U.S., which would be two consecutive quarters without economic growth.

Tell that to the people that have lost their jobs. Tell that to the people that have lost their homes and are living in tent cities. Tell that to the state of California that might not make payroll this month...

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In this credit crisis and finanical sector turmoil, most of the enterprises are looking at cost cutting measures to conserve the capital.

Open source software and solutions stand to gain in this period, as enterprises are willing to give to experiment and adopt open source technologies.

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I don't think that the economy will hurt open source. If anything, it should boost it as budget's get tighter.

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Up and Down is a nature of life

Recession will also follow the same nature of life and can come any time!

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vfghffgyfuggf

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Exactly @ anon! I keep saying that but no one seems to be listening...

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I don't understand what you mean by 'independent opensource'? Do you mean companies that are soley based around selling opensource software and services as their only source of income?

Oracle buying out Redhat, wont stop Opensource from being what it is. It just might mean one less commercial entity giving its all to improve it.

Redhat != Opensource

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Redhat...

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In wobbly economic times and fickle stock market like what we are facing now, attaining our financial goal is very hard. Not just the small businesses are affected but also the big companies; no wonder why many of these companies are announcing massive job cuts in order to keep their business buoyant. Some of those who were laid off in the companies they are working with, are forced to cut their expenses at home in order to meet ends. Survival is the thing on everyone’s minds since the recession started. Many people have turned to their grandparents for advice on what they did for survival during the Great Depression, when stock prices plummeted, the economy tanked, almost a full third of Americans were out of work, and there weren't installment loans to float them. Well, they tightened their belts and did whatever they had to do to get through it, and they also knew that as long as they kept at it, and didn't despair, things would turn around, which is exactly what we should do today. Vigilance, common sense, and determination are some of the keys to survival.


0 Votes

In wobbly economic times and fickle stock market like what we are facing now, attaining our financial goal is very hard. Not just the small businesses are affected but also the big companies; no wonder why many of these companies are announcing massive job cuts in order to keep their business buoyant. Some of those who were laid off in the companies they are working with, are forced to cut their expenses at home in order to meet ends. Survival is the thing on everyone’s minds since the recession started. Many people have turned to their grandparents for advice on what they did for survival during the Great Depression, when stock prices plummeted, the economy tanked, almost a full third of Americans were out of work, and there weren't installment loans to float them. Well, they tightened their belts and did whatever they had to do to get through it, and they also knew that as long as they kept at it, and didn't despair, things would turn around, which is exactly what we should do today. Vigilance, common sense, and determination are some of the keys to survival.


0 Votes

In wobbly economic times and fickle stock market like what we are facing now, attaining our financial goal is very hard. Not just the small businesses are affected but also the big companies; no wonder why many of these companies are announcing massive job cuts in order to keep their business buoyant. Some of those who were laid off in the companies they are working with, are forced to cut their expenses at home in order to meet ends. Survival is the thing on everyone’s minds since the recession started. Many people have turned to their grandparents for advice on what they did for survival during the Great Depression, when stock prices plummeted, the economy tanked, almost a full third of Americans were out of work, and there weren't installment loans to float them. Well, they tightened their belts and did whatever they had to do to get through it, and they also knew that as long as they kept at it, and didn't despair, things would turn around, which is exactly what we should do today. Vigilance, common sense, and determination are some of the keys to survival. Read more at http://personalmoneystore.com/moneyblog/2009/03/18/tough-economic-times-...


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