The Inversion of the Open Source - Big Corporation Divide?

I try to avoid thinking about corporations and business models as much as possible, but this morning i had a thought about something that's been troubling me for a while and i thought i would try to post about it.

It has to do with what seems to me like a particularly ironic change that's happening regarding who is benefiting from Open Sourcing their software.

Note that I'm not talking about who benefits from *using* Open Source software -- I'm talking about which developers benefit from releasing their software as Open Source.

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It seems to me that not too many years ago, large companies focused on profit were loathe to release their software products as open source.  Intellectual Property was their competitive advantage, and having the unique product to offer was key.  And small independent developers focused mainly on the creation of some useful tool could release their software open source fairly certain that, while they might not be making any money from their work, it was at least very unlikely that anyone else would be making money from it either.

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But it seems to me that with the shift to web-based services, we are starting to see a troubling inversion of this pattern, where the bigger and more powerful the corporation, the easier it is for them to benefit from releasing code as Open Source, while for small developers, releasing software as Open Source seems increasingly likely to result in it being used by an independent corporation to make money.

I think the reason for this shift is that with the move to web services -- it's no longer the intellectual property that is valuable -- it's a combination of computational resources needed to host a large and busy web service, and the resources and money available to market and support it.

A giant corporation like google can afford to open source most of its software because it's not the software that's valuable any more -- it's the company infrastructure that enables them to serve so many users, and the cross-marketing resources they can throw at the userbase any time it looks like they might be losing market share.  Open sourcing their software is merely a way to get more free publicity and free bug fixing for their code.

For web services, making the intellectual property of the source code available freely no longer does harm to these big corporations because it's not the important thing any more -- having the money to pay for the marketing to maintain a large user base and maintain a farm of fast servers to keep the service fast is what matters, and those are things that small upstart competitors rarely can compete with.

Meanwhile with the focus on online web services, for a indie coders without the money to compete with a large corporation, the paths forward are daunting.  If you create something new and innovative, unlike the case with desktop software, you have to know that you won't be able to scale up the service to handle a large volume of users.  This means that your likely best chance of surviving is to sell out to a large corporation who can.  And perhaps it's only by preserving the exclusive rights to the software they've developed and the intellectual ideas for it that they have a chance of going down this path.

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So i'm not sure these ideas are fully fleshed out, i'm just thinking aloud here -- but i'm troubled by how much more difficult i see things getting for small independent developers in this new world where online web services are king.

One sliver of hope may be the in small developers giving up some control and accepting a 50/50 partnership with these large corporate web service back-ends and cloud application services; it may mean the end of purely-independent small developers, but it may blunt the worst of my fears, and mean that small indie developers can operate on almost equal footing with large corporate infrastructures, as long as they are willing to split revenue, which isn't a terrible thing.