17.2 How the GPL Built Cygnus's Monopoly

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The GNU General Public License was also a bit of a secret weapon for Cygnus. When their competitors won a contract, they had to release the source code for their version when they were done with it. All of the new features and insights developed by competitors would flow directly back to Cygnus.

Michael Tiemann sounds surprisingly like Bill Gates when he speaks about this power: "Fortunately, the open source model comes to the rescue again. Unless and until a competitor can match the one hundred-plus engineers we have on staff today, most of whom are primary authors or maintainers of the software we support, they cannot displace us from our position as the 'true GNU' source. The best they can hope to do is add incremental features that their customers might pay them to add. But because the software is open source, whatever value they add comes back to Cygnus.. . ."

Seeing these effects is something that only a truely devoted fan of free software can do. Most people rarely get beyond identifying the problems with giving up the source code to a project. They don't realize that the GPL affects all users and also hobbles the potential competitors. It's like a mutual disarmament or mutual armament treaty that fixes the rules for all comers and disarmament treaties are often favored by the most powerful.

The money Cygnus makes by selling this support has been quite outstanding. The company continues to grow every year, and it has been listed as one of the largest and fastest-growing private software companies. The operation was also a bootstrap business where the company used the funds from existing contracts to fund the research and development of new tools. They didn't take funding from outside venture capital firms until 1995. This let the founders and the workers keep a large portion of the company, one of the dreams of every Silicon Valley start-up. In 1999, Red Hot merged with Cygnus to "create an open source powerhouse."

The success of Cygnus doesn't mean that others have found ways of duplicating the model. While Cygnus has found some success and venture capital, Gilmore says, "The free software business gives many MBAs the willies."Many programmers have found that free software is just a free gift for others. They haven't found an easy way to charge for their work.