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No matter what your view, Open Source software is basically free software that you can use without having to worry about paying for a license and you can even make changes to make it better if you know how. There are plenty of great technical books out there about OSS, many in an attempt to remain timeless usually discuss the ideas behind the software without really going into the nitty gritty parts of why it’s so useful and that was my purpose in writing this book. I wanted a way to explain this technology to people who weren’t already immersed in the world or business of computers and give you a better understanding of what’s out there. So whether you are a novice or an expert, I hope this book is helpful as you learn about OSS.

My view of Open Source is a little different than mainstream, much like the Internet I believe open source is a great tool to level the playing field. Just think about it, a small group of programmers can get together and build something that is just as great if not better than what the guys from Redmond and others would charge billions of dollars for. If properly implemented, companies can save millions if not billions of dollars in software or even hardware costs and every day folks can save hundreds on not having to pay for name brand. Many large companies love Open Source because many of the programmers who work on the code are not employees but people who do it out of a love for the product or because they know that people will really get some use out of it. There is one unmistakable truth about OSS, that is it’s forcing people to look more closely at how much they spend on software but for just that reason alone it’s here to stay.

There are plenty of books out there that also discuss the history of the Free Software Foundation and other OSS organizations, for now I will try to only touch on some of the history. To understand Open Source Software (OSS) one must understand the concept of a commodity. For decades people have used commodities as a means to buy the same product from multiple producers or vendors in order to keep prices low and so that they are not completely dependent on a single supplier. An example is when you go to the store to buy milk, the milk you buy today may be from a completely different farm than the milk you buy tomorrow. The grocery store chain or the company that supplies the grocer may buy milk from a different farm or producer on different days depending on who can offer the cheapest price. Regulations on certain food items as well as market demands has made milk an almost standard product across the board so it doesn’t matter whom you buy it from, the product usually tastes the same.

This process of making a standardized product is called a commodity and many businesses use this as a means to keep expenses down while still providing a low cost product or service to its customers. The invention of mass production in the early 20th century allowed for an even greater ability to create commodity products because products could be standardized in large numbers ultimately reducing their cost. Almost every industry has some kind of commodity component to it so whether you are buying parts for your car or purchasing furniture for your house, a commodity allows you to focus on the price of an item knowing that some level of quality will be there. Open Source Software is ultimately turning software into a commodity and though this may ruin the software industry to some extent, it will boom the field of technology in a great way.

Now you also have to understand that when something becomes a commodity, something else that is tied to it becomes priceless and necessary for the use of that commodity. When milk was commodity, it helped the cereal industry to boom because Kellogg’s and others could provide a great cereal without worrying about the quality of the milk being served with it. In a similar way the computer industry is plagued with a history of components that became commodities and made other things valuable.

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In an attempt to make the very popular search engine profitable, Google did not go to the advertising powerhouses and Madison Avenue men of the time to find companies wanting to advertise on the site. Instead it reached out to anyone and everyone wanting to advertise on their site because much like their motto, it believed that people could do the job better than executives. The idea was simple; its ads would not show up on the front page to discourage or confuse newcomers to the site, one cannot target an ad to someone who has not given them what one wants to know about yet. However, once someone does a search, Google provides relevant ads through Adsense which makes sure that an advertiser’s ad is on a corresponding site. By removing the middle man of advertisers, Google was able to reduce the ad costs significantly making them the cheaper. As an example, Adsense is now selling TV ad rates 50% less than the average ad agency because they don’t care too much about getting a large commission from it and are a more obvious choice for businesses.

In Adwords, advertisers would have to bid on a particular word or set of words and depending on how many people wanted that spot, the market would choose the price of the advertisement based on demand. Busineses also only got charged based on clicks which meant that one’s ad would run for as long as it needed to and the advertiser would only get charged based on tangible results, something never seen before in advertising. This created a fair market system where users did not get bombarded with irrelevant advertisements and businesses, in return the site only gets paid when those users show an actual interest in their products by clicking on the links. Of course Google gets a cut of that ad money depending on the data. They avoid getting executive kick backs and sweet heart deals which forces Google to focus on making their system better and more efficient. This makes Google more profitable in the process and creates quality data that advertisers can trust. The advertisers can see when a user clicked on an ad and when as well as match that information with when financial transactions where made on their site to see if Google is bringing in paying customers.

Google has always depended on data and user choice to run the business. There have been many attempts to trick or side track this dependence such as creating link farms, websites solely dedicated to linking to each other and to other sites, for the purpose of tricking Google. Yet even those attempts eventually go away as the search engine learns and adapts to what people do and click on. Aside from giving higher rankings to sites that have been registered online longer than others or demoting sites registered for less than a year, Google has had to do very little to curb these kind of abuses. Letting the user vote on what is better eventually creates a stronger more powerful search. What this all boiled down to was honesty. Google could have sold their search spots like many other companies did, but it believed that their customers needed to trust that it would put their needs above profit. Google’s reliance on data based marketing means that the better and more trustworthy their advertising data is, the more profitable they become.

Marketing executives look at Google and fear their ability to give a better product then they ever could. Yet their ability to do what they do so well has inspired many Ad agencies to join them instead of compete against them. The pay per click system has changed the way advertisers see the business. If I as an individual want to advertise my product, I simply go online and pay Google a few dollars to put my site on their search engine and Adsense websites, it does not cost me a million dollars and I can reach only those who are interested enough on my product to click it. No longer is a company willing to pay for an imaginary number of viewers who supposedly see their ads based off of the Neislen Ratings system; Instead they can use the dependable system within Google to choose where to put more of their money towards with confidence. The trust that is garnered in a system where numbers beat out suggestions makes Google’s advertising seem more like science and the Ad Agencies look more and more like alchemists.

Many would criticize Google saying that they are taking away from current Ad revenues, some spell the collapse of modern business because they no longer have control of modern day advertising. I say that let Google take them apart and make them cheaper and more efficient. There are better advertising systems than Google, and not every product can be sold or advertised this way, but for the most part Google has proved its method by its earnings. There is a boot maker in Arizona who sells his $5000 dollar boots with Google Adwords, he does not need to place an ad on television or in local newspapers and his business still has more orders than he can produce. That is what makes Google better.

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In the old days of the Internet, companies like Yahoo or Ask Jeeves hired editors much like newspapers, in order to filter the content online. It was relatively easy and cheap to do back in 1995, even with the Internet growing by millions of pages a year. Their thought process was that they needed to categorize the sites on the web much like the Yellow pages categorized business phone numbers. They could then charge more to get people to rank higher on search results. This would create a tier search system where if a user typed in Nike or combination of Nike, only Nike.com and other Nike related sites came up no matter what combination of the word Nike a user typed in. The older search engines and not Google were trapped by categorization and bad taste thus making the Internet not at all a reliable place to gather and store information. A user was lucky if they even found what they were looking for at all and then came Google. The first part of making Google synonymous with search was that they figured out what was wrong with Internet search at that time.

When Google founders Larry Page and Sergey Brin first started the company back in 1999, they did not simply want to create another search engine such as Yahoo or so many others that existed at the time. Their plan was to create a company that based what it did on pure data with the belief that customers and not executives held the power to make the company great if given the chance. Sergey and Larry’s idea was simple, much like MetaCrawler who by its name crawled the Internet looking for websites link by link. They would use that same kind of random Internet surfing idea and take it one step further. Since they had the data of Internet sites and who they linked to, they would take which sites had the most links coming to them and use that as a basis of importance. The reason they did this was because they believed that if multiple web sites linked to a single web site, there was probably something of value or worth in that web site. This was their initial basis for Google Search. It worked, but they did not want to do like many other search engines and settle there. The second part of associating Google with search was that they revolutionized how a search engine worked right away.

Upon review of the data coming into their Google Beta Search engine they realized that once a user typed in a search query, they would have to scroll from page to page trying to look more specifically for what they were trying to find. So the next step of brilliance came in saving user click data. If they saved every click to a website that a user made for every word that they typed in to search they could rank that particular site as being more valuable to the topic at hand and thus should rank higher overall for that particular word or phrase. That is one of the reasons why to this very day, Google has saved the information for every search and click it has ever received since the very first day it launched. It does this to ensure that the search results are as complete as possible and that users get the best response possible for their queries. The third part of making Google synonymous with search was that they continued to make their searches better by changing it at every step.

This single revelation turned out to be the brilliance of the Google way of thinking put into action. Instead of hiring legions of editors and staff surfing and cataloging the Internet as many companies had before them, they would allow their users to be the ones to catalog the Internet for them. With every click of the mouse and every search on Google, they ensured that the engine got smarter because they believed that a smarter engine would be able to give better results to its users. Google could then create a cycle of perfect harmony between the program and its customers that forces companies to play nice and allows every site to have a level playing field. No decision is made inside of Google without having hard concrete user data to back it up.

Even though Google loses millions in mistakes with product research it eventually makes up for the loss in billions. Besides the money, Google also learns as much as it can from the mistakes it makes. With Google Gmail, Voice and Wave in the horizon, it plans on using the same lessons it learned from it’s search engine creation to revolutionize Email, Telephones and Social Networking.

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Inefficiency and mass thinking is like a cancer that is eating its way through modern businesses; many small companies as well as Fortune 500 enterprises operate no differently than the big government bureaucracies which they so adamantly rally against. Businesses do and can still make money the old way, but if they are to survive in the next ten, fifteen or twenty years, they must adapt to a different way of thinking. If they do not do so, companies run the risk of having their businesses cannibalized from the ground up by smarter, faster and more open competitors. Google’s way of doing business has changed the rules and allowed new and old corporations to cannibalize themselves and revolutionize their way of thinking for the better.

The first of many issues plaguing corporate culture is Customer Service. The relationship between customer and company has changed for the worst over the last few decades and we seem to think of it as progress. Small business imitate large corporations in everything they do including how they handle customer service because they believe that it will bring them similar levels of success. Whether small or large, companies cannot afford to put a customer on hold for long periods of time no matter how much they continue to tell them that “your call is important to us!” As the internet has shown, people are looking to interact with these companies, to tell them what they want from those companies; the question is are they ready to listen to their customers? Give the customer control of your product or service, and they will use it for the better to help you create value in your company. If one listens to the users and cherishes their ideas, even the bad ones one will succeed.

The advantages to giving control is that the worst customer can become a best friend. Dell Computers ran into some problems a while back when they where first known as having the best customer service in the industry. Yet when random blogs began to pop up chanting the atrocities of Dell’s Customer service department the company ignored it, thinking like many do in old media circles that if peope do not give it credence it will just go away. Yet the internet has freed the customer to speak out against a large organization and for everyone to have a shared discussion of any company together online. The more the company ignored it, the worse the problem became, until finally, when users did a search for Dell on Google, a popular site called “Dell Sucks” became number two on the search results. With the advent of social networking sites like Twitter and Facebook, companies are scrambling to learn how to use them to the most advantage. Dell immediately told their customer service staff to look on every page and every blog for problems and ordered them to start answering customer concerns. Many companies would claim that they do not have the man power to do such searches and answer every customer problem online. However if they tried, they would recognize that it is possible to do so. Dell’s customers were already having a conversation about them; it was up to Dell if they wanted to join that conversation.

The second advantage is that the best customer is now the best partner. The best example of this is Google’s Gmail service; they could have launched it out like so many other Email providers like Yahoo or Hotmail, but they kept it in Beta (testing version) for nearly five years before they even offered it as a product. They handed control of the service over to their users for free and got so much feedback that it is now one of the most powerful webmail clients used by enterprises world wide. The critics would say that it is great if one is offering a free product to people, but what does one do when people have to charge their customers. Salesforce.com charges their business customers for access to a platform they built and they themselves use. Their business is Customer Resource Management and they do it well, if there is something that their customers need, they immediately implement it and offer that feature to all their other customers without a problem. They do this by creating an internal network for their customers to communicate with each other and ultimately do business amongst themselves.

In the previous case we saw with Picture People, I was a loyal customer, I loved their product and their service, but when I told them not to print all those photos, they did not listen to me because they felt they knew better. Picture People’s business belief is that if they force their employees to do it, the customer will fall in love with it and want to take it regardless of the price. Not to say that some do not but it is a waste and probably not very profitable. Plus the picture I take there is Copyrighted so that means I cannot make my own copies of a picture of myself. Why cannot I take this picture and post it on Facebook or Twitter? What makes them think that I am going to come back to them for reprints if it costs me a fortune to do so and what gives them the gall to make me feel like a criminal for doing it myself. If Picture people made the customer a partner and allowed them to post their pictures for the world to see, it may gain more customers. My love for their product should be their greatest asset, not their chance to nickel and dime me for every cent. In a world with so much choice, customers will no longer be content with a business’ half hearted attempts at customer service; one must go above and beyond for their business.

The second solution is that business needs to look at is the way it views the new economy. Small is the new big. Large corporations with hundreds of employees is too costly when one factors in Union Worker Costs and employment benefits. A company must manage abundance and not scarcity. When Adams wrote the book Wealth of Nations he explained that scarcity raises prices and thus is what they need as a business man to look for. Airplanes have a limited number of seats so they can charge more for those seats, Theaters have a limit of people that they can have in one movie so they charge more based on the number of people who want to see a film. In a world where a start up company can compete with a Fortune 500 in a level playing field, it pays for a company to stay small both for their clients and their share holders. Businesses need to think distributed in that they must share and network with others and not hoard for themselves. Instead of wanting the customer to come to the business, go to the customer. The news paper should look for its local bloggers, invite them to write on their print paper. Websites in exchange would promote the newspaper’s own website and content. Many newsmen will say that this cannot be done, that their profit margins will be too low to support the paper, the solution is to gut the paper. It is better that they canabalize their own business and not allow a competitor to do so. They should not see Bloggers as a threat but instead view them as a valid cheap resource for news stories that senior news men can view and edit if necessary. The news papers can also turn over their ad services to Google allowing it to do find their advertisers for them so that they can focus on what they do best, find the news. The more a business focuses on its area of expertise, the more Google will search them on that content and make them the experts on the subject.

The first advantage of new economy is the ability to rid corporations of the inefficiencies in business and focus only on what will make the business profit. In the case of Picture People, their inability to be efficient will probably be their downfall, a better and cheaper photo place will do a better job and take them down much like they took down Olen Mills. Google’s view is that one needs to manage abundance of information and not control scarcity of what the customer does not know, instead of linking to select websites with guarded information, Google search is built to get better as they get more sites on the internet in order to be able to search them and give their user a more concise answer to the question. Nothing that is done at Google can be done without data, there are no hunches at the board room. No single executives pics the product because they think it is a good idea. If an employee has an idea, they must come to the boss with hard data to back up that idea. If they want to make a change to a site, they run tests of different designs and see which customers found easier to navigate. If they want to create a new product they do Beta runs for customers to give them feedback that then they can present to the CEO. If one cannot come to the boardroom without the data to back up everything they want to do then they do not get to present it. If one does then the board votes on what they feel based on the data shows the most promise. Many will say that this is an absurd way to do business, that employees should be doing their jobs and not collecting random amounts of meaningless data on something as random as a website change, yet Google has proven itself a leader in innovation at every turn because of this method. They manage their abundance by allowing their customers and users to get more and more data back to them so that they can then create a better product.

The second advantages businesses must remember is that we now live in the gift economy, free as a business model. Everyone of Google’s products is free in some way shape or form, they make their money off of advertisements that are geared towards the niche needs of their users. So the better Google gets at offering ads to niche markets, the more money Google gets from it is advertisers. Walmart has destroyed man small businesses who sold the same product as they did and at a much more expensive price, they sell mainly to mass market needs and can control their prices in order to wipe out the competition. Any company wishing to compete against the Walmart’s of the future must think Niche, they must offer products that one cannot find at the mega stores thus creating a niche economy that they lead and own. The mass market is dead, the economy of niches is the new paradigm. A boot maker in Texas uses Google to sell his $5000 boots online, he only sells to a select set of customers that find him based on his niche market and with the help of Google sells hundreds of these per month. This niche product will not be found on Walmart shelves any time soon, but ask the boot maker if he is complaining? Remember Picture People, their absurd prices for their photos prompted me to realize that if they changed their business model they could increase their customers and grow their value. Instead of Copy-writing the photos they take, offer them for free online. Charge a hosting fee after the pictures have been taken that allows their customers to go online and pull the pictures from. They know their customers will want to go to Walmart or other Photo sites to print their pictures so offer them that as a service. Give them the ability to purchase through Walmart and make a few cents on the dollar in the long run. Allow the customer to post the pictures on their Facebook or Flickr accounts so that they can share it with everyone and thus promoting the business more. Do not hold the customers to one’s standards but instead allow them to create their own and make money in the process.

Most businesses would look at this and think it is absurd, “I sell a product” the say “not a service or a website,” Yet one does not always to see free as something business offers their customers but it can also be a means to learn from them as well as their employees. Google offers a 20% free project for their workers, this means that during an 8 hour day, employees are allowed one and a half hours to work on their dream project or innovation. Google benefits from this time because almost all of the projects invented during this 20% become full time Google products later on. Everything from Google Maps to Gmail was once someone’s 20% and is the lifeline of Google’s innovation. This also creates employee love for their work and most will spend their free unpaid time working on the project in an attempt to get it out there. Google gets this kind of work almost for free because it gives rather than takes from their employees and customers the ability to work on their dream projects. This is the new Google economy that every business must understand, the ability for businesses to stop marketing to the mass and create products that will still be found and sold in a large way but can be geared at a certain audience with specific tastes and loves.

Ultimately there are many more things that one can do to make their business more like Google, but the key is openness and throwing off the previous notions of success in mass in exchange for customer loyalty and brand honesty. If a business gives their customers control of the product, they will make it their own and love it, the final decision is still in the company’s hand but they can ensure success by welcoming the customer into the conversation more. Businesses need to remember that their customer does not have to come to them to have a controlled discussion of their products or services, the business must go to the customer by listening to their feedback and going where they are. The customers are already having a conversation about the product, the business just needs to find out where that discussion is going on and join in on that network. They also need to create a platform for the customer to work with and build on, this creates customer loyalty and brand respect. Finally a business must join the new economy by not over charing their customers for what only they can provide but instead offering them a free or low cost solution where the customer can do what they want and the business can manage the abundance from it. Using free as a business model is important whether one is implementing a free time for their employees to innovate or are offering a free service to the customer in exchange for data, customers and employees can go somewhere else for what one has to offer them, give them a good enough reason to stay. Google’s way of doing business has and will revolutionize every industry on the planet. With the ability to instantly gather and sort information steadily growing and getting better, we will soon not be able to run our businesses without these principles managing everything we do.

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