OSS Thoughts
Random thought. Picture this: A small band of highly-skilled engineers create some revolutionary research project that changes the way people use computers. They open source it. It becomes popular. There is yet no commercial product that can compete with it. It gains enough interest that other intelligent open source hackers join in and start contributing code. Everybody wants to use it, but companies cannot spend the time to deploy the system in their own organizations, so they hire the developers to install and deploy it. Now the developers have an influx of capital, so they expand their development efforts. In effect, they have created their own business model based on support and services by providing an open source product.
Or maybe Microsoft would just spend $5,000,000,000 and one-up the open source guys, taking all of their money.
That would be... so awesome.... (passes out)
TOMORROW THE WORLD
Hm. Makes me think of that IBM (or was it Intel) technology that combined lip-reading and voice recognition, to make an almost flawless technology. I heard it was open source. Although this doesn't go with your "small band of researchers" theme.
I have to wonder. If this new process of whatever is revolutionary and world-changing, who would open-source it? Since the project is apparently worth $509383094830843 to Microsoft, it is therefore worth that much to the original developers.
A lot of research starts in academia or research parks (XEROX PARC, IBM research, Microsoft research), which tends to keep software open source for peer review and such things.
You're right, some awesome research goes directly into product. Google, for example.
Actually, I revised my thoughts a little and realized that some of what I was talking about is already taking place. There are projects like OpenSG which have never been done before, and rather than getting paid for "support", companies and universities pay the developers for continued development. Over time, open source actually can make money, just not in the same way. It represents a shift from creating and selling a product to selling services and time.