.NET Discussion Misses the Point

Lots of heat generated by this eWeek article about .NET and VCs, but very little light.
The center of the reaction in the blogosphere seems to be either from Microsoft and related folks saying that maybe Microsoft’s approach with .NET (and perhaps Longhorn) is responsible, while other reactions focus on the misleading headline (i.e. it is not VCs who determine the market direction).
But this all misses the main point — open source is now where significant innovation is happening in software, and thus where VCs are more likely to find suitable investment candidates. Where once innovation happened more or less behind closed doors accessible only with strong NDAs in place, innovation is now starting to happen out in the open.
For example, a new Evans Data study shows that open source adoption is no longer based on cost alone and in many cases not even primarily. Open source users are finding excellent technical quality and suitability of features and functions. The decision to adopt is apparently becoming independent of whether the source is open or not.
The open source world is more a survival of the fittest environment in which code quality, ease of use, and suitability of and features and functions is of primary importance in determining a successful project. Customers can easily go to the next open source project if one doesn’t meet their requirements.
At the Massachussets Software Council Open Source SIG kick off meeting June 24 (which I previously blogged), Nat Friedman and Miguel de Icaza stressed the importance of preserving upward compatibility in open source projects. Failure to do so will also cause defection to other open source projects.
Furthermore, when Nat talked about the Hula project he started in February at Novell, he mentioned (and this is in the slides you can download either from his site or the SIG site) open source as a disruptive market force. The motivation for the “architecture of participation” for the Hula project is to create the industry’s best email and calendaring solution.
And as we have stated on the ObjectWeb open discussion forum for Celtix we are committing to have our commerical product, Artix, maintain consistency with Celtix, not the other way around.
Update: Another blog entry from a VC quoted by Scoble.

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