By Marvin Tutt, Chief Executive Officer, Caia Tech

The Iron Law of Software Economics

There’s a simple rule in software that most companies refuse to accept: anything that can be commoditized will be commoditized. And when software becomes a commodity, open source wins. Not sometimes. Always.

This isn’t idealism. It’s mathematics.

Why Proprietary Software Always Loses (Eventually)

The Cost Asymmetry Problem

Proprietary software has to pay for:

Salaries for developers
Marketing and sales teams
Legal departments for licensing
Support infrastructure
Profit margins
Reinventing solutions that already exist

Open source has to pay for:

Developers (who often contribute for free or are paid by companies that benefit)
That’s it

When you’re competing against free labor and shared costs, you can’t win on price. Ever.

The Innovation Speed Problem

Proprietary model: One company, limited developers, secretive development, slow feedback loops.

Open source model: Global talent pool, parallel development, public feedback, rapid iteration.

Linux didn’t beat Windows by being better initially. It won by improving faster. While Microsoft had thousands of developers, Linux had tens of thousands of contributors worldwide.

The Lock-in Problem

Proprietary software vendors always face the same temptation: create lock-in to extract more value from customers. But lock-in creates resistance. Smart customers avoid vendor lock-in. Desperate customers can’t escape it.

Open source eliminates lock-in anxiety entirely. You can always fork, modify, or migrate. This psychological safety leads to faster adoption.

The Historical Pattern (Spoiler: Open Source Always Wins)

Web Servers

Proprietary leaders (1995): Netscape Enterprise Server, Microsoft IIS
Open source winner: Apache (dominated for decades)
Current reality: Apache and Nginx run the vast majority of websites

Databases

Proprietary leaders (1990s): Oracle, SQL Server, DB2
Open source challengers: MySQL, PostgreSQL
Current reality: Cloud providers offer managed open source databases as their primary offerings

Operating Systems

Proprietary leaders (1990s): Windows, various Unix variants
Open source winner: Linux
Current reality: Linux runs 100% of supercomputers, 71% of smartphones (Android), 96.3% of top websites

Container Orchestration

Proprietary attempts: Docker Swarm (proprietary features), various vendor solutions
Open source winner: Kubernetes
Current reality: Every cloud provider offers managed Kubernetes

Machine Learning

Proprietary leaders (2010s): Various vendor-specific ML platforms
Open source winners: TensorFlow, PyTorch, scikit-learn
Current reality: All serious ML work happens on open source frameworks

The Three Stages of Proprietary Software Death

Stage 1: “Open Source Isn’t Ready”

Proprietary vendors dismiss open source as “toys” or “not enterprise-ready”
They have feature advantages and better UX
Customers pay for the polish and support

Stage 2: “Open Source Is Good Enough, But…”

Open source reaches feature parity
Proprietary vendors focus on “enterprise features” and support
Price becomes the primary differentiator

Stage 3: “Open Source Is Actually Better”

Open source surpasses proprietary solutions in features and stability
Vendor lock-in becomes the only reason to stay with proprietary
Migration tools appear to help escape proprietary solutions

Why Companies Still Choose Proprietary (And Why They’re Wrong)

“We Need Support”

This assumes proprietary vendors provide better support. Reality check:

Proprietary support often means “file a ticket and wait”
Open source communities often provide faster, better answers
You can hire the actual developers who wrote the code
Multiple vendors can provide commercial support for the same open source project

”We Need Someone to Blame”

The idea that you can sue a vendor when their software fails is mostly fantasy. Software licenses explicitly disclaim liability. You’re paying for the illusion of accountability.

”Open Source Has No Roadmap”

Major open source projects have clearer roadmaps than most proprietary software:

Development happens in public
Feature requests are visible
You can contribute to features you need
You can fork if the project goes in a direction you don’t like

”We Don’t Have the Expertise”

You don’t have the expertise to fix proprietary software either. But with open source:

You can hire experts who know the codebase
You can train your team on publicly available code
The knowledge isn’t trapped in one vendor

The Give Free, Get Free Strategy

For Companies: Why You Should Open Source Your Non-Core Software

What you give: Your internal tools, infrastructure, and non-competitive software.

What you get:

Other companies improve your tools for free
Reduced maintenance burden
Industry-standard tools that attract talent
Reputation as a company that “gets it”

Examples:

Netflix open sourced their infrastructure tools and got a better Netflix stack built by the community
Facebook open sourced React and became the default choice for frontend development
Google open sourced Kubernetes and now controls the container orchestration standard

For Developers: Why You Should Contribute

What you give: Your time and expertise.

What you get:

Better tools for your daily work
Reputation and career advancement
Learning from the best developers globally
Job security (you can’t be locked out of tools you help build)

For Users: Why You Should Choose Open Source

What you give: Feedback, bug reports, occasionally money for support.

What you get:

Software that improves continuously
No vendor lock-in
Ability to customize for your needs
Lower long-term costs

The Network Effects of Open Source

Open source creates powerful network effects:

More users → More bug reports → Better software
Better software → More users → More contributors
More contributors → Faster development → Better software
Industry adoption → More job opportunities → More developers learning it
More developers → More contributions → Better software

Proprietary software can’t compete with these network effects. A single company can’t match the collective intelligence of thousands of contributors.

The Economic Reality: Commoditization Is Inevitable

Software follows a predictable economic pattern:

Innovation phase: New technology, high margins, proprietary advantage
Growth phase: Multiple competitors, feature races, declining margins
Maturity phase: Commoditization, price competition, open source emergence
Infrastructure phase: Software becomes infrastructure, open source dominates

Most categories of software eventually become infrastructure. Infrastructure needs to be:

Reliable (many eyes make all bugs shallow)
Standardized (open standards prevent fragmentation)
Affordable (shared costs beat individual licensing)
Improvable (community contributions beat vendor roadmaps)

When Proprietary Makes Sense (Temporarily)

Proprietary software can succeed in:

Brand new categories where no open source exists yet
Highly specialized niches too small for community development
Consumer applications where UX polish matters more than customizability
Regulated industries where compliance overhead favors commercial support

But even these advantages are temporary. As markets mature, open source alternatives emerge.

The Strategic Implications

For Technology Leaders

Don’t bet your company on proprietary infrastructure. It will eventually be commoditized. Build your competitive advantage on open platforms.

Do contribute to open source projects you depend on. It’s cheaper than vendor licenses and gives you influence over your technology stack.

Don’t try to build proprietary alternatives to established open source projects. You’re fighting mathematics.

For Investors

Avoid pure-play proprietary infrastructure companies. They’re fighting an unwinnable war against free alternatives.

Invest in companies that monetize open source through services, hosting, or complementary products. Red Hat didn’t make money selling Linux—they made money supporting it.

Look for companies building on open source foundations. They have sustainable cost structures and can focus resources on actual innovation.

For Developers

Learn open source technologies. They have longer career half-lives than proprietary alternatives.

Contribute to projects you use. It’s an investment in your own productivity and career.

Choose employers who contribute to open source. They understand how technology actually works.

The Acceleration

The cycle is accelerating. What used to take decades now happens in years:

Cloud computing: AWS pioneered it, but Kubernetes and cloud-native tools commoditized the platform layer
Machine learning: Google’s TensorFlow and Facebook’s PyTorch commoditized the framework layer
Container orchestration: Kubernetes won in just a few years
DevOps tools: Open source dominates CI/CD, monitoring, logging

Why the acceleration? Because:

Software development is faster
Global talent pool is larger
Distribution costs are zero
Network effects compound faster

The Conclusion: Math Beats Marketing

The “give free, get free” principle isn’t altruism—it’s mathematics. When you contribute to open source:

You get more value back than you put in (positive sum game)
You build on a foundation that can’t be taken away
You join networks that compound in value
You avoid the vendor lock-in tax

Proprietary software vendors will continue to exist. They’ll focus on new categories, specialized niches, and polished user experiences. But anything that becomes infrastructure will eventually be open source.

The companies that understand this early gain sustainable advantages. The ones that fight it waste resources on unwinnable battles.

The rule is simple: Give free, get free. Everything else is just temporary market inefficiency being corrected.

Marvin Tutt is the Chief Executive Officer of Caia Tech, building open source infrastructure for the forensic intelligence era.

Learn More:

Caia Tech Open Source: github.com/Caia-Tech
Contact: [email protected]