The present can often be judged by the past. The open source revolution, which could be loosely named, has been one of the greatest trends in business and technology over the last 25 years. Although the notion of sharing source code is not yet accepted by many traditionalists, the idea of utilizing existing open source software is. We are getting to a point where almost all major non-niche programs are open source. On any Android device, on any Mac computer, almost every major web technology: browsers, servers, databases, compilers; all open source.
This is a big contrast to the time when I wrote my graduate dissertation. “Open Source Software in the Enterprise Environment”. Soon after ESR had written, “The Cathedral and the Bazaar”. Microsoft was the leader with its massive closed source code repository. It was undisputed that only a few serious commercial uses of open source software were possible.
What was the reason for the shift? Was the “bazaar” model the right choice? No, it was not just an idea that made the difference. Furthermore, the concept of a distributed workforce, in which each individual has an interest in working together as a whole, is not revolutionary.
Software development was perfect for decentralization. What was missing was a universal communication infrastructure to allow developers to easily share code and collaborate without interruption. Not surprisingly, the rise of the Internet, CVS, IRC, Usenet, mailing lists and open source software coincided.
Could the original “cathedral” model still do something? Yes, it could facilitate a lot of business activities that we could loosely call “value plumbing”. It incentivized developers: they were paid for dedicating their time and effort to a project. It also provided all the necessary support resources for development (hardware and software, tools, educational materials, etc.). It was a source of funds and collected payments from all those who benefited from the work. In short, it managed the cash flow and made a good profit by enabling and encouraging the production of solutions.
At first, software was not as important as it is now. It is often used as a hobby by many people. But we cannot deny that “value plumbing” still plays an important role in human activity and in the provision of services.
What does this mean for the future? The service industry has traditionally used a “cathedral” approach to commissioning, provisioning and management of services that could fall under this “value plumbing”. It could be characterized by tight coordination, enforced coherence and centralization. The fact that one legal entity has authority and responsibility for large areas of production is a clear indication of this.
As a platform for enabling, eBay was a pioneer in true global decentralization. It was a key enabler of small businesses and cottage industries in the developed world. With the Web 2.0 and mobile platforms (which are closely intertwined), we are seeing new classes of decentralized applications. The so-called “sharing economy” is beginning to take shape with Uber, AirBnB and TaskRabbit as examples. Like eBay, these operators reduce the relevance of a whole group of “structural intermediaries” and replace them with a tech-savvy matchmaker.
They often involve a high degree of deconstruction. Uber’s “safe driver fee” and AirBnB’s “cleaning fee” are common examples of learning more about your match service provider. So what do taxi companies, hotels, or teams of unskilled, semi-skilled labor have in common? This is what makes them important examples of “decentralized services”. Where do their profits come from that allow them to be scaled down to an automated scale?
They manage their reputation through word of mouth, advertising, marketing and promotion, manage their workforce (through financing and hiring), manage their market (by adapting and changing the levels of supply and demand) and manage their risk (verification and compensation, bonds and insurance).
Although they cannot claim to have created new or open markets, they are working towards it. They are a kind of shareware in the world of open source software. It is not 100% free, but it is certainly not commercial. There are still distinct entities. That is why there is a decentralized veneer to the state, techno-social.