55 – What is Open vs Closed? Is all “Open” really Open?

When a company says they are launching a new product that is open, is it really? What does open even mean? The history behind open source, its successes and failures, and all the lies we are told all the time by some Tech players. The truth, unvarnished

Navigation:

1. Intro (01:34)
2. What is Open Source Software – history, definition and core innovations?
3. Open Source ftw (for the win)
4. Lies… when Open is not Open, but a Moat or the Bridge for Closed
5. Conclusion

Our co-hosts:

• Bertrand Schmitt, Entrepreneur in Residence at Red River West, co-founder of App Annie / Data.ai, business angel, advisor to startups and VC funds, @bschmitt
• Nuno Goncalves Pedro, Investor, Managing Partner, Founder at Chamaeleon, @ngpedro

Our show: Tech DECIPHERED brings you the Entrepreneur and Investor views on Big Tech, VC and Start-up news, opinion pieces and research. We decipher their meaning, and add inside knowledge and context. Being nerds, we also discuss the latest gadgets and pop culture news

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Bertrand Schmitt

Hi, welcome to episode 55 of Tech Deciphered. In this episode, we will talk about open versus closed and proprietary. What does it mean in technology to be an open or closed application? You have all heard about open-source, I guess. There is a saying in Silicon Valley, if you are first, you close it. If you come late, you open it.

Bertrand Schmitt

Basically, it means that you might have an advantage being the first player on the field. You might afford to be able to close-source your product, your software, your application. But if you are late to the game, late to the party, and it’s difficult to fight the leading player in the marketplace, maybe an alternative strategy in order to gain distribution is to open-source your product. There have been many examples of this through Silicon Valley history. Today, we are going to talk more about all of this. Good to see you, Nuno, today.

Nuno Goncalves Pedro

Nice to see you as well. Shall we start with history—the history of open-source? It’s apparently the first known system that was supposedly open-source or in public domain was in the ’50s, the A2 system in 1953. Basically, it was a compiler. A compiler is what turns source code into binary code that gets run by a machine.

Nuno Goncalves Pedro

It’s what allows you to run apps on, for example, your phone and things like that, a compiler. I know some of you that are like, I’m a computer engineer. Is that a compiler really or is it an interpreter? Let’s forget that for a second. Let’s call it a compiler just to make life easier for everyone involved.

Nuno Goncalves Pedro

That was the first public domain open-source thing that we know. Then there isn’t much, ’50s, ’60s, ’70s, there isn’t much. Obviously, there was the summer of love at some point in the late ’60s, and maybe through the ’70s, people started thinking through, shouldn’t we be doing things that are more open? One of such people was a gentleman called Richard Stallman, who’s still alive, so you’d shout out to him. He was part of this “let’s call it hacker community” from those days and was doing some interesting things around it.

Nuno Goncalves Pedro

There was this belief that source code shouldn’t be closed, that if you were monetising something quite a lot, and you were putting even certain things in your code, that if, for example, you were using unlicensed applications, so unlicensed binary, that you would run into trouble and have other issues. So he manifested himself against it and came up with something that we’re still using till this day, the GNU or the GNU Project and GNU Manifesto. Now, GNU, this is the funny part—some of you will find it funny, others might not—stands for GNU’s Not Unix, which is a recursive acronym. You have to appreciate computer scientists and computer engineers coming up with things like that.

Nuno Goncalves Pedro

But its GNU is GNU’s not Unix, because at that time, Unix was a proprietary or had been made over time a proprietary platform by a couple of big companies in the market. There was this view that they wanted to, in some ways, get out of that space. The GNU project was born, and we, till this day, have what we call GNU general public licences, GPLs. You probably have heard about this. Now, it’s in the ’90s, early ’90s, that we have the biggest movement, I think, in the history of open-source with a gentleman called Linus Torvald.

Nuno Goncalves Pedro

I probably butchered his name. Linus Torvald, something like that, pushed a version of a kernel that he had. Actually, the first version he had was not open to the public, but then he released it to the public under a GNU licence. And that operating system was called Linux. And the rest is history. Linux has led to many other things after that. It’s a wildly used operating system globally, in particular on the server side, with many variations, and we’re off to the races.

Nuno Goncalves Pedro

That’s the shortened version of how we got here in some ways. Then there’s a lot of cool things that happen afterwards, but that’s like seminal moments are GNU and Linux. That’s the two things you need to remember.

Bertrand Schmitt

Yeah, and if I may say, Linux is really the kernel, and then you have by extension, Linux, the operating system are actually combining a kernel plus many tools from GNU or not GNU. Just to remind everyone, the Internet is running on Linux.

Nuno Goncalves Pedro

On Linux?

Bertrand Schmitt

We’ll talk later about a lot of our other open-source software. It’s not just Linux, but so many components of the Internet that are running on open-source software. Also, just to be clear, the first definition of open-source was coming from our friends at GNU, but ultimately, there has been competing initiatives to define or redefine what is open-source.

Bertrand Schmitt

One organisation in particular, the open-source Initiative, OSI, has tried to codify their own way and probably in a different way, what is considered open-source or not. They have this official definition they published in 2006, and they keep updating them for GNU, they keep generating new definitions and creating new or updating licences.

Bertrand Schmitt

We have multiple licences possible when we talk about open-source, which can create some misunderstanding about what is exactly open-source or not.

Nuno Goncalves Pedro

We’ll come back to the more bad use of open later in this episode where obviously there are people that use open, and it’s not open at all.

Bertrand Schmitt

Yes.

Nuno Goncalves Pedro

But these are seven moments in real open-source. It created a movement, it created a way of doing things. It created a mindset on how people can share each other’s source code. At the very nature, open-source starts from there. It starts from the notion that source code, not the binary, not what’s created by the compilers that then is run as an application, but the source code itself can be shared for free.

Nuno Goncalves Pedro

That’s incredible. That’s like the religion of the time was a religion of we have all these big monolithic companies like IBM, Microsoft emerging, etc. It’s someone that’s saying, “No, we don’t accept the closed ecosystem play. We want to have code that is shared globally.” In some ways, that movement is now probably the dominating movement in the world in terms of source code sharing.

Nuno Goncalves Pedro

Obviously, as we know, there’s a lot of people profiting out of code today. There’s ways of keeping your code intact and keeping things in-house. But the open-source movement has changed how things are done. It is a quasi-religious movement. It’s this notion of you have… There’s copyright. I enforce my copyright, the entitlement I have to this thing that I developed.

Nuno Goncalves Pedro

There’s copyleft, which is a term that came from open-source, which you are obliged to share under certain licences all the stuff that you developed around it. To your point, there are coexistent pieces. We’ll come back to that later when we talk about Android and Google and the Android open-source project versus Android itself. What is closed? What is open, and how do some companies do well in maintaining these two aspects working really well, like the openness and the closeness piece?

Nuno Goncalves Pedro

I think Google does a decent job on Android. We’ll argue later if that’s the case or not. And yeah, it all started, similarly, with this gentleman Richard Stallman, and then with Linus just giving us Linux, and everything changed.

Bertrand Schmitt

Yeah, it’s really amazing when you think about what was happening at the time. If you think about the ’90s, it was the rise of Microsoft, from DOS to Windows, and Microsoft becoming at some point one of the most valued company and at the time certainly fighting tooth and nail against.

Bertrand Schmitt

Open-source was considered evil by some corporations when actually no, it was just a movement and a different approach to business and willingness to develop things in a different way and a way that was more open, transparent, collaborative, and especially important you could argue in the age of deploying applications everywhere, depending on these applications’ stability over time. It is a significant evolution of the history of computers and programming.

Nuno Goncalves Pedro

Microsoft will keep popping up in this episode. Just to be very clear, this is not their first rodeo. They’ve been having these fights or antitrust cases, etc. In some ways, a lot of the reactions we saw, even with Linux, Linux becoming such an important operating system, certainly server-side globally, has to do with a fight to Microsoft.

Nuno Goncalves Pedro

Because obviously, as you said, Microsoft went DOS to Windows, and then they were really managing a closed ecosystem. There was this view like an operating system is critical. An operating system for those who are listening to us who are not computer scientists or computer engineers is what makes a specific device work.

Nuno Goncalves Pedro

An operating system for your computer, for your laptop, let’s say you’re running Windows or macOS, is what makes the device work. Without it, there’s nothing else. It’s the core. It’s what makes it boot up, and it shows something in front of you and all that stuff. And then there’s things on top of it. As Bert talked about it earlier, even in the case of Linux, there’s device drivers. There are things that make other devices that connect to that device work. For example, if you have a keyboard or a mouse, et cetera, you need to have device drivers that support certain types of keyboards and certain types of mouses.

Nuno Goncalves Pedro

And then on top of that, you have user interface, which in general is extended by the operating system, so it’s part of the operating system these days. But you could argue it’s a different logical piece of it. Then you have all the apps, what you run on it. Microsoft Word, PowerPoint, your email client, all of that are apps. They run on top of the operating system. Operating systems are critical because without operating system, the device is a piece of hardware. Nothing happens. There’s nothing happening to it.

Bertrand Schmitt

Yes, totally. Operating systems are critical. Maybe we can go a bit quickly about what is open-source. What is the definition of open-source. If I take the OSI open-source initiative definition, open-source needs to meet multiple criteria in order to qualify as being open-source. One is free distribution. You should not restrict any party from selling or giving away the software. It has to be a free distribution, no royalty, no fee.

Bertrand Schmitt

Then the source code must be included, and you must allow the distribution source code as well as in compiled form. That’s another critical part. You need to be able to inspect that software as a developer, be able to inspect it if you want, so that it’s clearly understandable, and you can make sense of it and potentially do something about it. The third condition is about derived works. It must be authorised. So you must allow modifications and derived works.

Bertrand Schmitt

You must allow them to be distributed about similar terms. Fourth, it’s about integrity of the author source code. There are different ways you can authorise that, but basically creative-derived worked might need to carry a different name or version numbers.

Bertrand Schmitt

There is still a support to make sure that It’s clear what is the initial author source code and what is not. You can modify it, but you cannot mislead people about what is the original product or not. No discrimination against persons or groups. No discrimination against fields of endeavour. You cannot restrict a program to be used in a specific field or in a certain way. Distribution of licence. The rights must apply.

Bertrand Schmitt

There should not be a need for additional licence. So what you distribute has to be all included. Licence might not force you to use a program as part of another product. You might not restrict other software. And it must be technology-neutral. That’s the OSI definition. So if you want to say and claim that your product is open-source, it has to follow these criteria laid out by the OSI.

Bertrand Schmitt

Typically, what people do is that they will choose a specific licence that has already been developed. Basically, instead of recreating your licence, you will pick an existing open-source licence that has been fine-tuned to follow these criteria.

Nuno Goncalves Pedro

Yeah, so there you have it. If you want to do something open-source, that’s basically it. We’ve talked about the terms of licensing already, copyright versus copyleft. Open-source is copyleft. You have to pass it on and it’s free. This gets a little bit muddy because we’ll discuss a few companies later on where some elements of openness, and then there’s some elements of closeness. We’ll talk about Android and obviously Google’s stake in that ecosystem on Android. We’ll talk about actual lies around openness when things are not open at all.

Nuno Goncalves Pedro

Maybe we’ll start with one firm that has gotten quite a lot of heat that now seems to be changing their ways, we’ll see. But certainly many years ago was getting a lot of heat for taking advantage of open-source but not giving back, which was Amazon, and in particular, Amazon Web Services. The reuse of a lot of code that was seen as open-source code, taking it, playing with it, doing things to it, forking it, as we call it, forking is creating an alternative version to it that goes into the future. Think of it as if you watch science fiction, parallel universes. In another universe, something else happens. That’s the fork. It’s like a fork on the road.

Nuno Goncalves Pedro

They got a lot of heat for it, certainly back in 2018, on the fact that they were using but not contributing. Recently, it seems that that attitude has changed, that they’re now much more strongly contributing, but that led to a variety of things from the market, from to the Commons Clause, to the server side public licence SSPL from MongoDB, which tried to address some of the concerns and issues that were happening with some of these big giants just reusing a bunch of code that was out there and then appropriating it as themselves but not contributing back to those repositories.

Nuno Goncalves Pedro

One important piece to take into account is we talk repositories, think of it as containers, things that have the code in it, that makes over time that code to be compiled and then to be executed, so to run as binary code, to make something then work. The importance of this is in all these open-source projects, there are different roles in the open-source projects. Open-source projects themselves have their own governance. There are people that can commit to the open-source project.

Nuno Goncalves Pedro

There are people that can review stuff for the open-source project, and there are people that at the end can approve changes for new versions of the code. Even in these things, even though it’s all open, et cetera, for some of these big repositories where there’s a lot of code being maintained, there’s still governance. It’s not like there’s no governance. This is an anarchical system and people do whatever they want. There is still a governance system.

Nuno Goncalves Pedro

The issue with Amazon is they were appropriating all this code, using it for themselves, which is fine, but they’re not giving anything back in the shape of things that they might have evolved and improved in the code that might have been valuable for the open-source repositories that they were taking source code from.

Bertrand Schmitt

Yeah, I think also in a way, and we’ll talk more later about business models, but it was in some ways probably connected to open-source business models. When you make open-source software, like the Linux kernel, everyone around it is going to help contribute to that kernel because at some point, they will have no direct real benefit except contributing for it or because the development is sponsored partially by big corporations, we intend to use a Linux kernel in some of their other products. So they see a benefit to help contribute to that. Because it reduces dependence on third parties.

Bertrand Schmitt

So you end up having more control. But for some of the open-source projects, let’s say a database, for instance, and we can take the example of MongoDB, part of the business model of that company might be, you know what? We are going to provide the software for free, MongoDB. But at some point, if users want us to host the database in the cloud, that sort of stuff, we are going to simplify and streamline and host it for them and manage it for them. It will be easier for them. And that’s how we are going to make money.

Bertrand Schmitt

On one side, they build a software for free, available for free. But in exchange, if you have some specific use, it was expected that you might use them for that specific host use. But when Amazon comes, take over the source code and host it, it becomes very difficult competition. As a result, your business model is not working any more. So that’s what many open-source companies were facing, basically. It’s the end of their open-source project. Because if they have no more money to deliver on it and Amazon is not contributing, the project is going to die.

Bertrand Schmitt

They felt they had to make a decision. The decision led to new licences or new clause added to existing licence in order to prohibit the Amazon use of just hosting the open-source software and making money out of it and at the same time destroying the business model that have evolved from the open-source community.

Nuno Goncalves Pedro

I know. Just to maybe finalise this discussion on this, this is when then lawyers get involved. Heather Meeker is probably well known. She’s based in the Bay Area, I think still. That’s where lawyers get involved because at some point there has to be a legal framework around all of these things. You can’t just operate outside some line. There needs to be a line on the sand that can be enforceable, where people can take each other to court. We had huge fights in the past.

Nuno Goncalves Pedro

The Oracle fight with Google because of the Java situation after the Sun acquisition. These things matter. Who owns something obviously matters when it comes to code as much as it does to anything else, like a house. That’s why these new rules that were put in place, these new types of agreements, were there to try and frame a different perspective on how things were evolving. Things were getting extremely complex, and there was a need to clarify things and make them more explicit.

Bertrand Schmitt

At the same time, not everything is all good and well under the open-source sky and environment. There might be some issues. Typically, the one people know in a tech industry is a risk of using some copyleft-licensed software. So for instance, if we take a GNU software, many are using the GNU General Public Licence, the GPL licence for short. This one can be pretty dangerous because it’s a copyleft licence. But the problem with a copyleft licence is that you are forced to share everything you built with this software with everybody else.

Bertrand Schmitt

If you are a closed-source business, create new software that is leveraging GPL software, you might be in trouble and might end up being forced to open-source your product and provide it for free. Typically, that’s something you want to be very aware. The GPL is not the only licence that might cause trouble, but it’s certainly the most common one. When you are developing a software these days, typically what do developers, if they are working for a closed-source company, is making sure that they absolutely never used any GPL-licensed software in the process, unfortunately, given the restrictions.

Bertrand Schmitt

As you said, there has been fights in the past. There has been some pretty famous fights of companies who tried to basically leverage new licensed software, GPL software, and that didn’t end up well for them. They had to either settle like VMware or some others like Verizon to open-source their product.

Bertrand Schmitt

As a company, what you do typically would be to scan your source code for different type of licence in order to understand what licence is being used, because sometimes you don’t know when your developers have introduced some software, libraries, copy-paste even some stuff. This stuff could be really dangerous. It’s a big question you have when you do, for instance, financing of the business. When you exit a business, you need to make sure you understand your risk profile and potentially have an alternative to some software before you can go to the next stage.

Nuno Goncalves Pedro

This is a big deal because it’s human nature. Developers can be brilliant, but at the same time, they can be lazy. They just copy-paste something. They’re like, “I have no clue where this is coming from”, and they just use it. That piece of code might have come, to be honest from something that is under a licence that is not beneficial to the company that they’re developing it for. Again, it’s a little bit like, people are like, “Oh, but that’s silly.” It’s not so silly.

Nuno Goncalves Pedro

I mean, think of it, if I’m developing something, it’s like writing a book It happens to be a book that manifests itself in many weird ways. If I’m reusing lines from another book, I need to know what I’m using it from. I tend to understand what’s the right quotation, what’s the right source, what’s the right licence. This is the analogy for this.

Nuno Goncalves Pedro

I know it’s a little bit more complex than that, but it’s the analogy for this. If you’re using and borrowing code from somewhere else, you need to really make sure that you understand where that code is coming from, so that you’re not infringing on anyone’s licences or not embedding your own code with stuff that can come back to haunt you as Bertrand was mentioning.

Bertrand Schmitt

I think the book reference, Harvard lost its President on some copyright issues. It was not copyright, but it was-

Nuno Goncalves Pedro

Quotations.

Bertrand Schmitt

Quotations that were missing.

Nuno Goncalves Pedro

I don’t want to get into a fight with Bill Ackman because I think… No, this was afterwards, right? This was the post. It started with quotations on his wife, and then it extended to Harvard, and obviously, they kicked out.

Bertrand Schmitt

I think it started with Harvard. No, it started with Harvard.

Nuno Goncalves Pedro

No, I think it was the other way around. Eager then got… Then they went after, no? Anyway, we don’t want to go into political quotation issues and have Bill Ackman tweet on us. We’re okay, we’re good. Bill, we love you.

Bertrand Schmitt

I think it’s proving the importance of basically copying someone’s work. It can be a book, it can be an article, it can be a reference, it can be source code. Source code is written work. You want to be careful before doing that. If it has the right licence, it’s okay. If it has not the right licence, then it’s not okay.

Nuno Goncalves Pedro

The open-source projects, and as you mentioned, mindset and movement, this is a movement, open-source movement, has given us a lot more things than just code. It’s given us a lot more things than just software innovation. Given us, for example, very deep organizational shifts. We now talk about remote teams as if it’s, “Oh my God! We discovered remote teams.”

Nuno Goncalves Pedro

The first guys at scale to have remote teams were companies or organizations or projects that were open-source. Because of the nature of it, because there were thousands of contributors from around the world, they were not co-located. In many cases, they were doing this part-time. They were doing development part-time. Linux is a great example of that.

Nuno Goncalves Pedro

These teams were what in the open-source world have come to be known as fully liquid teams. Everyone’s around the world. There’s no real hubs. It’s a fully distributed team. Those projects, those companies that were focused on open-source projects were the real pioneers on fully distributed. That shifted in many ways, for example, on how engineering is done today.

Nuno Goncalves Pedro

Because if you think about it, it’s not just the organization’s different and everyone’s working from around the world. How do you coordinate people on code? How do you bring code pieces together into something that works? When do you compile? When do you launch into production? Who’s doing the testing before all of this happening? How are they doing the testing? It changed everything around software engineering and software development.

Bertrand Schmitt

I guess no surprise that Git was created by Linus Torvalds to help him better manage the development of the kernel. Git is a way to basically to synchronize and historize and a branch source code. We need that first because of that unique aspect of very remote distributed teams that is inherent to many open-source project.

Bertrand Schmitt

It was open-source that created the need and ultimately found solutions to solve these needs. A scale development globally at any time zone, anytime, definitely an innovation from open-source and not just an innovation itself, but they build the tools to get the job done and the processes to get the job done.

Nuno Goncalves Pedro

Git, if it’s familiar to you guys, because you’ve heard about a company called GitHub that was a massive acquisition, and a few other companies, is a source code management tool. It’s a way to basically verify which control version are you guys on in the repository. We’re not putting pieces of code in the wrong version, effectively. Think of it as many of you might not be developers, but if I’ve had this issue, you’re working on one document, which version of the document are you working on?

Bertrand Schmitt

Yes.

Nuno Goncalves Pedro

It’s the same problem, right? You want to make sure that you’re working on the same version, and it’s properly maintained and sustained.

Bertrand Schmitt

If now we talk about open-source as innovative in business model, because again, as we discussed at some point, except some rare exception, there is a need for some business model. If you develop the Linux kernel, you might not do it directly for revenues, but indirectly you will sponsor developers, pay them, or they are employed by your company.

Bertrand Schmitt

They are working on the Linux kernel because your company benefit from the Linux kernel because maybe it’s building hardware that needs an operating system. You don’t want to pay fees to Microsoft. At the same time, you want this Linux kernel to leverage your new hardware. You need to have people who developed for that kernel. That’s one type of very indirect business model. There are other types. We talk briefly about companies like MongoDB that basically does a business model of hosting.

Bertrand Schmitt

Basically, we probably use a source code, but if you want to have a simplified hosting solution for it, we are here, and we are going to give you a subscription. Another typical business model has been around support, of course. The Red Hat probably innovated a lot in there, in terms of subscription model for what was at the source an open-source product, but ultimately became the Red Hat distribution, and they made you pay the subscription, mostly because they will provide you a high level of service and more advanced enterprise-class type of version of the products that were initially open-source.

Nuno Goncalves Pedro

Open-source is supposedly free, but there are hidden costs. If you have a release of something in open-source, the early releases of Linux were appalling, very difficult to maintain. How do you run, for example, a UI framework? UI framework is like you see windows in front of you instead of just text. On Linux initially, it was extremely difficult. You’d have to compile it, you’d have to attach things, et cetera. You need to decide which UI framework you’re using.

Nuno Goncalves Pedro

Then players like Red Hat with their distribution, simplify that greatly and created value for end users by making these things automated, more simplified for a regular user to be able to use at length and therefore charged for it, as Bertrand was saying, for the support of the ecosystem and support of their releases, et cetera.

Nuno Goncalves Pedro

In some cases, the other piece is enterprise-grade. You might have something that’s open-sourced, and it’s been compiled, and it works, but it’s like, does it have the right level of optimal security for you? That obviously generates some options for players to then make money on top of some of these stacks as they move along.

Nuno Goncalves Pedro

Buying large, as Bertrand said, people make money out of support or services, support services. Companies like Docker, for example, initially made a lot of money out of services. They make money out of other variations of the software as it scales and companies come into that ecosystem to create bundled versions of it that are more closed in nature.

Nuno Goncalves Pedro

There’s ways to make money, but the ultimate effect is this is for all mankind. The reason why it matters that there is open our software is, think about it, if it’s free at the point of consumption, it allows people that have less resources, companies that have less resources, countries that have less resources to be able to use software that is high-quality graded software. It allows for people to keep innovating on software without necessarily always having the objective of making money out of it. It’s because people want to contribute back in some ways, the hacker culture.

Nuno Goncalves Pedro

When I was in college, people had this strong objection to hackers, and we always used to distinguish between hackers and crackers. Cracker came from the term used for telephony systems. You tap into telephony systems and get free calls. Crackers were the bad guys. Hackers were not. Hackers, and today we use that white hat-black hat term. White-Hat hackers are the ones that identify issues and raise them and maybe get bounties out of it and do the proper thing. The Black Hat ones are the ones that make the news by taking over services, et cetera.

Bertrand Schmitt

Yes, totally. Going back to the business model, one that I found interesting was used by Databricks, where, for instance, you get the slow version of the software for free. If you want the fast version of the software that has been optimized for much higher speed, maybe 10X improvement, Then you have to pay for the Databricks version. It’s compatible. API is the same everything, but the engine itself is much faster, but you only get the fast engine if you pay your fees. I think that was another interesting innovation.

Bertrand Schmitt

To go back to your point about for all of mankind, that’s typically also one reason why you would pick open-source as a strategy, because as a distribution, open-source can be very strong because people get excited because it’s free, people get excited, they want to contribute, and you don’t even have to potentially pay the developers. It can be a very writer’s model if it finds its market and a very strong alternative to other business approach. Open-source can truly be not just a development approach, but really a go-to-market approach. It’s considered one of the very effective product-led growth strategy, open-source.

Nuno Goncalves Pedro

Indeed. Moving to open-source for the win. The big achievements of open-source. We already talked about one, so that’s pretty obvious. Let’s get the numbers in on Linux. Linux is one in servers. I mean, around 97% of the… Certainly in web servers, 97% of the top million web servers in the world run Linux, 97% of the top million. Top 90% of the cloud runs on Linux. That’s what I call a knockout win by open-source. There’s variations on the Linux that are deployed here. There might be some distributions, but we’ll take it as an open-source win. I mean, huge user open-source win.

Bertrand Schmitt

What’s amazing, we talk about Git that is also open-source and could be also a part of the internet infrastructure, or at least the world coding infrastructure. Let’s talk about some other tools that you might have earned that are open-source. Python, one of the most famous, most used development language is open-source. The Apache HTTP server, which is another part of the internet infrastructure. Nginx, the acceleration caching engine is also open-source. We have Node.js, which is another development language.

Bertrand Schmitt

In terms of database, we have MongoDB we talked about, but there’s also PostgreSQL, MySQL, as open-source version. Going back to coding or environment, we have Electron that is open-source. React as a front-end development language is open-source. And if we go to AI, it’s actually amazing to see how much is open-source. I mean, Python is a part of most AI projects, of course, but PyTorch, SensorFlow, Keras, all of this is open-source. In a way, AI was such a race that in order to participate, you better have to move very fast, convince others to use your product, and what better way than to open-source it.

Bertrand Schmitt

Obviously, it’s not the case of the CUDA language. That one is actually not open-source and has been developed over for a very long time by NVIDIA, and is still a key competitive advantage for NVIDIA.

Nuno Goncalves Pedro

On the consumer side, things that you use on a daily basis that are open-sourced, Firefox, if you use it as a browser, actually, it came from the Netscape opening of the world when the huge fights with Internet Explorer happened, and they decided to open it up. Chromium also came out of that, which is Google Chrome uses it, but Chromium is the open-source piece of it.

Nuno Goncalves Pedro

A signal on the messaging side, bring the fight back to WhatsApp and the big Facebook, which is funny because obviously it was largely funded by Brian Acton. After he made all that money within WhatsApp. It’s funny how these things happen, like Elon Musk with OpenAI and stuff. Anyway, we’ll get back to that later.

Nuno Goncalves Pedro

Open Office, obviously, was a potential alternative in a fight being brought to Microsoft Office, maybe less successful on that side of the fence. You have, I’m sure… Most of you today would have something open-source that you’re using on a regular basis. Again, even on the consumer side, It’s well noted. It’s not just a B2B tools or platforms discussion. It’s more broadly than that.

Bertrand Schmitt

We talked about Databricks, a closed-source company that is actually built on top of an open-source product that they initially built called Apache Spark. Docker was also part open-sourced.

Nuno Goncalves Pedro

Docker scaled on open-source, right? It was a company that was having tremendous difficulties. They scaled on open-source, and then obviously, they created a business model around it to make money themselves. They scaled on open-source. I mean, it’s incredible.

Bertrand Schmitt

Then we have some interesting stories. If we take AI, and we’ll go deeper in other situation, but one pretty famous model, Mistral, pretty new company actually, but already famous in term of models, I shared in an open-source way under Apache 2 licence, three different open-source models, Mistral 7B, 8X7B, 8X22B, that are usable and customizable for a lot of use cases. Again, we see open-source goes, of course, with the business model.

Bertrand Schmitt

If you want to use the optimized commercial models, then you have to pay. The commercial business models, them are not open-source, and you will buy them because they are more efficient, they have higher performance, they have extra capabilities, easily available, hosted. We can see that even with new LLMs, AI is trying to find its way. Open-source is trying to find its new definition in a way with AI and LLMs.

Nuno Goncalves Pedro

Exciting times. Obviously, open-source is one in many dimensions, and I think the world is better off because of it. Companies have been built on top of this notion of there’s an open-source component and ecosystem-building piece around it, but then there’s pieces that are maybe less well-framed. Maybe as a last example, Android. Now, Android, just to be clear, as a trademark, it’s owned by Google. If you put Android in your device, Google is saying this is Google-approved. Now, Android has a project behind it, which is the Android open-source project, a OSP, where you can pick up the kernel.

Nuno Goncalves Pedro

What makes it run effectively, and a variety of other pieces around it, and fork it, as we discussed before, create a new version of it and go your own separate route. There’s a couple of players who have done that. More recently, Huawei has had to go full fork because of the issues we know happened in the US, where Google was not allowed to give them a licence. Part of Android is open-source, clearly at its very core. And there are pieces of it, even some device drivers, et cetera, that are open-source as well.

Nuno Goncalves Pedro

There is an ecosystem around it. There are device manufacturers that make a living around variations, very strong variations on that project, on the AOSP. Now, there are pieces of Android that are absolutely closed. The way I think Google did it is, to be honest, for me, it’s clean. I think some people will probably disagree, but it’s clean. Google, when they launched Android, they launched, I think it was the Open Handset Alliance, OHA, right? Around Android to really make sure that it was going to be an open-source core operating system, etc.

Nuno Goncalves Pedro

Then obviously, Google is Google. There’s pieces that you guys that are using Android today on your mobile devices are running which are not open. Obviously, some of the apps clearly are not open, like the Snapshots of the World, etc. Even one level below, the Google Mobile Services and the Google Play Services piece.

Nuno Goncalves Pedro

The Google Play Services piece is what Google Play is implemented on the ability to develop your own apps on top of that framework is on Google, just shockingly enough. Google mobile services, which includes core services that you guys all properly use as well, like Google Play itself, the App Store, Google Chrome, et cetera, is owned by Google as well.

Nuno Goncalves Pedro

For you to run GMS, this is the issue that happened with Huawei, Google has to have a licensing agreement with you. That’s what allows you to then say, I’m running Android, because as I said before, Android is a trademark owned by Google. It’s open on certain extent. It’s closed on others, but it’s running the world now. It’s doing what Linux did on the server side. It’s doing the same in mobile devices. Obviously, the world is mostly running on Android today or a variation of it of the AOSP.

Bertrand Schmitt

Yes. Without going into too complex stuff, If you build, for instance, a handset on the base of Android. First, we just said that some services, Google services, might not be available if you don’t comply with some Google request, but also some Google apps might not be available. You might not be able to have YouTube, Gmail, and other stuff.

Bertrand Schmitt

That could be huge trouble. In a way, even if the operating system itself is free and available and the core libraries, if you want to be successful in the marketplace with device using Android, you better follow the different guidelines that Google is giving you in order to have their apps installed, to have Google Play, and even to have some apps compatible. If you don’t have these Google mobile services, that might be really big trouble for the success of your device.

Nuno Goncalves Pedro

I was on the other end of a couple of very significant negotiations with Google back in the day, early days, and it’s been always a little bit tricky. So It’s not totally clean, but I would still say for the most, it’s an interesting ecosystem that has worked relatively well for all involved, even when Google now is competing, obviously, through several acquisitions like the HTC smartphone team, and that sort of we want it, but we don’t really want it. Montreal acquisition where they got a bunch of patents. I think they’ve done a pretty good job, but maybe switching to Lies. Lies when open is not open, but it’s more of a [inaudible 00:39:59] or a bridge for a close, as I call it.

Bertrand Schmitt

Yes. I mean, not wanting to point fingers too hard. I mean, business is business.

Nuno Goncalves Pedro

Microsoft?

Bertrand Schmitt

Yeah. On this one, if you are old enough to remember the old Microsoft approach, embrace, extend, extinguish to open-source and open standards. That was in the late ’90s, early 2000s. At least it was alleged that Microsoft had this behaviour. If we’re on acronyms, there were many acronyms connected to Microsoft, fear, uncertainty, and doubt, presenting vaporware in order to block your competitors.

Bertrand Schmitt

At the time, there was a lot of approaches of Microsoft that were not so great, business-oriented, but definitely not very friendly. So at the end of the day, yes, Microsoft has been accused in the past by a lot of open-source promoters, companies to have a very negative approach to open-source. I think it has changed. I don’t think the new Microsoft is representative of the old.

Bertrand Schmitt

I mean, a great example, you talk about GitHub. GitHub was acquired by Microsoft a year ago. In a way, it was a litmus test for the open-source community because so many open-source projects were hosted on GitHub. And I would say it flourished. Microsoft, in a way, has proven that it’s very supportive of open-source project.

Bertrand Schmitt

Microsoft Visual Studio Code, for instance, is an open-source project and has taken the development world by storm. I’m still impressed how so many developers are using it, even people who might not have said good things about Microsoft years ago. It has been a revolution. The old Microsoft 20 years ago was not a friend of open-source, but now at least it’s not an enemy.

Nuno Goncalves Pedro

Just to explain to our listeners the Embrace, extend, and extinguish. It was based on a memo written internally at Microsoft, which said Embrace, extend, and innovate. The extinguish came as an adaptation for the trial.

Bertrand Schmitt

Yes.

Nuno Goncalves Pedro

Embrace is basically you go into a technology stack, open-source, you embrace it, you’re part of the community, you do commits, you involve your engineers, you do stuff back, et cetera. The extent is then you pick up from there, and you start extending functionality, creating your own functionality, the forking piece I was mentioning earlier. Creating your own functionality, added features, et cetera, that go well beyond the core capabilities of the initial repository’s code bases that you were using.

Nuno Goncalves Pedro

Then the experience goes without saying, what it is. Once you have the extra features, you’re like, “I close this, and now you have to pay.” I would allege, maybe I have a slight disagreement with… It’s nuanced, this agreement with Bertrand. I think they’ve changed their ways. They’re maybe slow-pacing us as well on GitHub.

Nuno Goncalves Pedro

I think what they’re doing with OpenAI right now is magically looking a lot like appropriation of something that initially was not an open-source project, but an open project for the benefit of humanity. Obviously, there’s the case in court that Elon has taken them to court because he obviously funded them originally, and he’s like, “This is not what I funded you guys for.”

Nuno Goncalves Pedro

Now, they’re acquiring a lot of stuff around the stack, inflexion, et cetera. I don’t know if they’re slow-pacing us or not. I’ll give Satya, a walk on that and suspension of disbelief. But I don’t know. It’s always the same name that we talk about from the late ’80s, well, even before, right? So ’80s, late ’70s, ’80s, ’90s. Microsoft keeps coming back, so I’m not sure if it’s in the ethos of the company or not.

Bertrand Schmitt

If I remember, actually long, long time ago, maybe was it in the ’80s, but Bill Gates was famous to write a letter explaining how bad was open-source. That was this lecture a long time ago. So, yeah, it’s a long debate.

Nuno Goncalves Pedro

The browser wars. There have been so many of these things that have happened, right? I mean, it’s incredible.

Bertrand Schmitt

It’s as long as a fight between Apple and Microsoft, I guess. The fight between Microsoft and open-source. I think there has been significant improvements, but it’s not as if Microsoft is fully embracing open-sources or built on open-source. Other certainly is being built more and more on open-source. Like a AWS. You were talking about OpenAI with Elon Musk. I mean, definitely, it’s a weird name for a company that is anything but open.

Nuno Goncalves Pedro

That’s not open.

Bertrand Schmitt

I don’t know. Your chips in a package like healthy good food. No, it’s on a healthy good to eat chips or drink Coke, but then they call themselves OpenAI. Personally, I don’t care, except that it feels very much like marketing that is, I mean, basically a lie.

Bertrand Schmitt

Obviously the first and the most important shoulder of OpenAI and the one who helped attract some of the best talent to OpenAI disagree as well with OpenAI and feels he has been cheated. So Elon Musk filed a lawsuit recently in March against OpenAI and actually even said that if you guys rename the company Closed AI, then I will stop my lawsuit.

Nuno Goncalves Pedro

We just call it Closed AI.

Bertrand Schmitt

We can see the power of a name. It can have in the public’s mind.

Nuno Goncalves Pedro

Just to be clear, OpenAI, to my knowledge, was not ever an open-source project. It was a non-profit. It still is actually. It’s a non-profit.

Bertrand Schmitt

It was a non-profit.

Nuno Goncalves Pedro

It’s always been a non-profit. It still is. Just happens that now the non-profit has a for-profit below it. That was created afterwards. As I said, I’ve been involved in something like this in the past. It’s not as shocking as it may seem. It sometimes happens, but it was never open-source. It’s open in the sense that it was a non-profit for the benefit of mankind kind of thing.

Bertrand Schmitt

When you accept donation in that context, I can imagine how it might be to see suddenly everyone trying to make huge money out of it. Actually, Sam Altman is not directly making any money, given he’s not a shareholder. But I understand that he has a way to leverage his OpenAI position to build all the stuff around, and then he directly benefit.

Bertrand Schmitt

What’s surprising is that a lot of general public, even developers or authors, might think that there is something open. But as far as I know, there is not much, if anything, open. There has been some tools that have been open-source, I believe, by OpenAI, but ultimately the core of the company is not open.

Bertrand Schmitt

Another company—and this time I would say that they are much, much closer to being open and being closed—is Meta with LLaMA 3, LLaMA 2. They have released the weights, so not the source code, but the weights of their LLMs. Basically, anyone can run it. They have put a few restrictions that limit you if you have hundreds of millions of users. There are some others for specific conditions.

Bertrand Schmitt

Ultimately, there are some constraints, so it cannot meet any definition of open-source. But I would argue that it can certainly claim some level of openness that is very valuable, especially in the face of OpenAI and other closed-source initiatives.

Nuno Goncalves Pedro

I was just at a session with Chris Messina, who obviously still credits with having invented the hashtag, and it’s like, yeah. When Meta talks about this, but then there’s a limit on how many users you have, is it really open? Then the stuff they’re doing around mixed reality and augmented reality now, I’m not sure I fully trust that this is an open-sourced endeavour.

Nuno Goncalves Pedro

It is for scalability purposes. I don’t know if it’s an embrace, extend, and extinguish playbook play, but it feels a bit like that. It feels a bit like let’s run the open-source gamut in the playbook and then see where we head. In the worst case, if it fails miserably, it fails miserably. If it works well, then I can’t possibly think that they won’t take over the ecosystem.

Bertrand Schmitt

It’s tough to say. Me, I’m just judging based on the licence of the current product. Apparently, there are rumours that they won’t share the weights of the new version with a huge number of parameters. So LLaMA 3 might be the last version, or maybe they will have different branch or pro-version. I don’t know. For me, I’m more judging them based on what they release.

Bertrand Schmitt

For sure, there is no source code, so again, it’s not open-source, but there is open weight. It’s huge because it means that a lot of use cases, 99.9% of use cases, you can use that and pay no licence for it. I would take it as a huge win.

Bertrand Schmitt

It’s definitely challenging the OpenAI of the world and others because when you see the investment from Meta to build this models, we’re talking about hundreds of millions and probably sooner in the billions. It’s not a small gift. It costs real money, so I cannot complain if Meta has a business strategy with that. As we have seen, most open-source companies have to have a business strategy to keep it sustainable.

Bertrand Schmitt

For the other piece, the mixed reality approach, Meta Horizon OS and Horizon Store. Here less clear about what’s really open. This one is certainly stretching it. There might be some openness in the sense that now you can access the store more easily as a developer. You are not relegated to a lab section of the app store for the Quest. That’s it. They are going to licence their operating system to other manufacturers. It’s open in the sense of windows is open. So this one you can laugh as much as you want about the openness, I guess.

Bertrand Schmitt

To be clear, I’m not judging. Every company has to have a business strategy. What you can, however, have an opinion like I have, I believe, is, what’s the marketing you use? To call it open when it’s fully closed in every way, but you are open to even third-party licensing your product? That’s a bit much on the openness.

Bertrand Schmitt

But I guess, you know what? Consumers, developers, companies just have to learn things through the marketing. But again, I will take what is really open and be happy about it. I think that on the mixed reality side, it’s a good strategy, to be frank, for Facebook to licence their product. It would be even better if they don’t push it too much on the marketing side.

Nuno Goncalves Pedro

Yeah, they keep talking about it like it’s open as well, and it’s not. I mean, it’s not their definition of open. It’s true already with LLaMA, right? I mean, with LLaMA 2, et cetera. There are special licences, there’s limits on what you can do, ton of limits, so it’s like…

Bertrand Schmitt

Not tons of limits. It’s not too much.

Nuno Goncalves Pedro

I mean, come on, prove it. It’s used for training other language models. Requires a special licence for deployment in app or service with more than 700 million daily users, which basically means the big competitors, right?

Bertrand Schmitt

Means Google cannot use it. But if you’re not Google, you can.

Nuno Goncalves Pedro

Then they can change the licence tomorrow. It’s not 700 million, it’s 100.

Bertrand Schmitt

No, they cannot change the licence. I mean, LLaMA 2, as is-

Nuno Goncalves Pedro

For future versions of LLaMA, they can.

Bertrand Schmitt

Sure, but that’s their prerogative. But that’s also because it’s not open-source. If it was open-source, it would be easier to-

Nuno Goncalves Pedro

But that’s why I’m saying they’re calling it all of these efforts open, Bertrand. They’re not open. They’re basically saying, “We’re investing a bunch of money into these things, and we’re making this super usable by you guys for free.” It’s like Facebook is open. Facebook is free to consumers, so they’re going to make money somewhere else. That’s the Facebook playbook, free at the point of consumption.

Bertrand Schmitt

But that’s fair. I think that the definition of most open-source businesses today, they have to find a business model.

Nuno Goncalves Pedro

But this is not even open-source, Bertrand. There’s no open-source here. Where’s the open-source of this?

Bertrand Schmitt

For me to have an LLM that I’m free to run in 99.99% of the use cases, as long as I’m not Google. I mean, it’s magic, to be frank. It’s a huge competition. That’s why we have probably some competition like Mistral, is going even more open-source. I’m all for it personally. Again, if you’re a developer, if you’re a company, what are your choices? To pay OpenAI, to spend a billion, to build your foundational model? You don’t have a lot of options, and this is super high quality. This is not trash what they are giving.

Nuno Goncalves Pedro

I don’t see how this doesn’t become an embrace, extend, distinguish play.

Bertrand Schmitt

Potentially, I cannot judge, and I can imagine that they have a strategy. Will it become that? I don’t know. For me, it’s tough to judge before something bad happens. Right now, I’m just, “You know what? Let’s use it, and if it changes, let’s not use it.” Or potentially, of course, let’s consider an alternative. You might say, “No, I’m going to use Mistral because I believe in their s