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The a16z Show

a16z Podcast: An Open Source Business Model That Works

The a16z Show

a16z

Culture, Innovation, Entrepreneurship, Software Eating The World, Disruption, Business, Technology, Science

4.21.2K Ratings

🗓️ 31 July 2014

⏱️ 23 minutes

🧾️ Download transcript

Summary

Open source software has permeated practically every nook of the software world. The biggest companies and largest-scale systems all lean heavily on open source code. Yet, with the exception of Red Hat, no one has built a great business on top of ope...

Transcript

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0:00.0

Hello, this is Peter from Andresen Horowitz, and I'm, it's my honor to be joined by Ben, who's the CEO of DigitalOcean.

0:11.5

Ben, how you doing?

0:13.8

Doing really well.

0:15.4

Thanks, Peter, for having me on.

0:16.8

Good.

0:17.4

Yeah, great.

0:18.1

So one of the things, Ben, that I've spoken quite a bit about recently

0:24.4

in sort of the data center of the future and the future of enterprise technology is the notion

0:32.7

of open source economics finally working and specifically kind of contrasting open source being used

0:41.0

being used as a service like what digital ocean does versus let's say the red hat model of

0:48.5

you know on-prem free software and then charging for for you know, the most charging for support and maintenance

0:56.7

as the economic model.

0:59.0

And my belief is that there's really a very beneficial model by having open source as a service,

1:05.8

open and proprietary source as a service, again, as a way to really drive economic value out of open source.

1:13.9

And I'm just sort of curious.

1:14.9

I mean, you guys are, you've built a company on this.

1:17.7

So I'm curious on your thoughts and how you guys think about that.

1:22.9

Yeah, definitely.

1:24.5

So we built our cloud on top of KVM's virtualization technology, which in and of itself is an open source project, and we deliver a ton more value than just the virtualization engine. So we've created an entire interface and API to interact with the infrastructure that we're providing.

1:47.7

And we've also put thousands of servers into a data center.

1:52.1

Now, all of this is powered by KVM, and we've turned it into a infrastructure as a service provider.

2:01.9

Without the work that was put into the open source project,

...

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