Open Source software vendors: recession resistant?

Apparently Red Hat, a vendor of a commercial linux distribution, has been doing well during the recession. This makes sense intuitively, people are looking for ways to cut costs due to the economic climate, and giving Microsoft less money seams to be a good way to go about it.

This reminds me of a classic interview question people get asked by investment banks, “Can you think of an asset with a negative beta?”

So next time someone gets asked that question they can say something besides “funeral homes” (stocks brokers jump out windows during recessions etc.. the most common answer or so I’m told!) . They can say that open source software vendors might also:)

10 replies
  1. Truth Seeker
    Truth Seeker says:

    Proof read!!! 🙂

    The same principle is working for McDonalds right now. Business is booming because fewer people are going to more expensive places (and McD’s ‘new’ menu is still bedding in over time, recovering lost customers).

  2. agnitio
    agnitio says:

    apolgies, randomly an early draft of the post went up so not only was it not proof read, it was missing the last paragraph and the hyperlink to the beta article!

  3. agnitio
    agnitio says:

    @Truth Seeker

    That’s quite itneresting, my intial thought would have been that for many people takeaways are a luxury and thus McD’s might see a bit of a slow down.

    However, it sounds like that may be offset by people that wouldn’t ususally buy McDonalds “slumming it” instead of going somewhere more expensive.

    Do you know if this a general trend for McDs or if it is isolated to the US?

  4. Bill Bennett
    Bill Bennett says:

    An interesting point here is that one of Microsoft’s key arguments against Open Source software is that it takes more time to configure and learn than Microsoft’s products.

    Of course, in a deep recession a lot of people suddenly switch from bging time poor to time rich and have the opportunity to learn and otherwise play with new types of software.

    I suspect the same thing applies to gardening — people will be buying seeds and spades because they now have time to do the garden.

  5. agnitio
    agnitio says:

    @Bill Bennett

    I must admit I spent alot of time playing with open source software when I was studying full time and thus could spend hours trying out diferent linunx distributions etc… Now that I’m working full time I just use ubuntu at home since I can put the disk in and it works straight away!

    Intersting point about Microsoft. Having used open source software I don’t think it’s harder to learn to use at all. I think the issue is more that there is a “switching cost” in that you already know how to use microsoft stuff but open source stuff works different.

    I think if you were starting from a clean slate and had to learn one or the other the difference in difficulty would be neglible. Unofortuantely most of us grow up using microsoft so we aren’t in a “clean slate” situation.

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