Cheap versus stable.

Om Malik is writingabout Vyatta and their open source router:

Vyatta is one of the many start-ups that are bringing open source disruption to the highly profitable and closed world of networking. While open source software movement has ravaged the bottom lines of companies like Sun Microsystems; networking behemoths like Cisco and Juniper have continued to enjoy fat margins they earned even before the telecom crash of 2000. Even today, a big portion of their IT budget goes into networking gear. Routers, switches, firewall devices, and even VPN boxes cost thousands of dollars.

Yes routers are expensive, but a big part of that cost we pay for stability; the guarantee that our routers will stay up and running, and a number to call when they don’t. That’s the biggest problem with open source that I can see. It won’t replace the pricier options until it is as stable and well supported. And that support cost needs to be factored into the price somehow.

As Om points out though, open source tools are definitely going to make huge inroads into developing countries like China. In my last job I competed against Huawei who were using open source software and cutting their prices to 50% of ours. At the point you have no choice but to use open source solutions. And that is going to hurt companies like Cisco unless they are willing to take a loss to get the business.

Also, the use of open source tools might allow people to begin to compete with the big telecom companies.

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