The Missing Future On Random Hacks, Eric Kidd says:
... that between MS and open source initiatives, there will be no room in the marketplace for small software companies.

This is an interesting article , one that brings up many good points. Overall, I don't really agree with him. I think, for the most part, commercial software companies will still be able to co-exist with MS and open source in the market place.

Open source software is great, and I think its a great resource of applications for technologically savvy people (especially developers), but it's still not targeted at novice end users (like my mom). Will this change in the future? Probably to some extent, but I still think open source will lag behind commercial software vendors due to lack of marketing and polishing.

On the other hand, I do see a specific niche of the software development market dieing out in the next few years due to the open source movement: custom control vendors. These guys have been lucky for the past decade because most development shops don't want to spend the time writing the next cool button bar, but many developers on their own time love this kind of development. Just look at Code Project. Anytime we need a control for one of our apps, Code Project is the first place we go. Why? Well, not only do we get great controls, we get the source! This way, if something is screwed up (which is has been), we can fix the bug and move on (which we do [and send it to the control developer]).

BTW, if anyone thinks that a small development shop can't exist when competing against the likes of MS and open source, check out fog creek software. Joel has managed to create a profitable software company, that sells a few great products, make a little bit of money and provide his developers offices.

One day maybe I'll be fortunate enough to work for Joel!

[via WebLogs @ ASP.NET]

OpenLink Software has been able to build a profitable business selling ODBC Drivers against a backdrop of Open Source and Free commercial alternatives. Now this is all well and good if decision makers understand our value proposition