Adam Smith

What Open Source Can't Do

December, 2008

Host software services. This is a pretty big deal for entrepreneurs looking for business opportunities. Let’s look at some examples.

LogMeIn, which filed to go public in 2008 is basically VNC with a web only client side and central servers that will facilitate NAT traversal across firewalls. Various VNC developers had written software to do this but nobody was willing to maintain the servers. That’s created a business opportunity and a competitive advantage against open source alternatives.

Fog Creek Copilot took advantage of the same opportunity, and in this case they actually used VNC software.

What about a place to host your MP3 play history for other people to see and for other software to mine? Audioscrobbler started to do this, but morphed into a startup called

I’m sure open source blogging software was around when Evan Williams launched …and look what happened to Blogger. I wonder what percent of blogs today are ran in the old fashioned way: someone went to and installed it on their shared server, versus using a company set up to host the blog for them. I’d bet in favor of the hosted service.

It’s too bad, really. There’s no doubt we’d have better software today if open source projects could get servers and operational resources for free. We’d probably all be using an IM client built around Jabber.

But it’s an opportunity for entrepreneurs, and one that will grow in the age of web services and web experiences. Ask yourself: what open source software exists that solves a big problem in a large market? Can you add value by hosting it in the cloud?

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