Open-Source Operating Systems Open Vast Profit Potential

The software that you are using right now on your computer or smart phone is about change — in fact this change has already started. Early investors in this technology could see vast profits. That is what I am here to talk about today.

Open-source software will disrupt a range of existing industries. Computing is already undergoing radical upheavals, but eventually, even our banking system will transform due to the open-source revolution.

I’ve written before to my Breakthrough Technology Alert subscribers about the open-source software controversy and its impact on investors. It is such an incredibly important story, however, that I’m going to expand on the subject here.

As resentment of Microsoft grows, so does the open-source movement. Many outsiders view this movement as an extension of the hacker community. Microsoft allies have gone as far as to accuse open source of being anti-capitalist, even anti-American.

The open-source community, however, is not a motley crew of counterculture anti-business “code monkeys” eating Fritos and drinking Mountain Dew in their parents’ basements. Those types are part of it, of course, but the largest contributors to the open-source cause have been Sun Microsystems, Oracle Corp. and Google.

Proponents of an open-source operating system protest that their cause is not anti-capitalist. Rather, they say, it is about establishing industry wide standards and infrastructure that encourage innovation.

The heart of the open-source movement is Linux. Anybody can use and modify Linux, free of charge. Modifications, however, must be open source and made available to others.

Many believe Linux operating systems — and there are many flavors — are superior to Microsoft Windows. Open source has never held a significant share of the home computer OS market, though. The MS advantages of widespread use and installation by computer manufacturers have been too much to overcome. Behind the scenes in the technically sophisticated server world, Linux dominates.

The Verge of Convergence

Among those who study the evolution of electronics, it has always been known that “the convergence” was inevitable. The convergence refers, basically, to the fact that increasingly powerful chips would eventually make computing ubiquitous and fungible. All devices, including cars, home robotics systems, phones and televisions would overlap in their capabilities. Wireless connectivity would link them all together through the network or “cloud.”

The most obvious sign that the convergence proceeds apace is the dramatic emergence of the tablet computer. Part phone and part computer, sales are accelerating. Desktop computers are dying, and laptops are losing sales to increasingly powerful tablets. The recent forced resignation of Acer’s CEO, Gianfranco Lanci, due to his failure to see tablets coming is just one sign of this disruptive convergence.

Apple made a splash by being first to market with the iPad tablet. No one, however, really thinks Apple will hold onto more than its traditional base of Apple partisans for long. It has become apparent that the mobile version of Linux, Android, has already won the mobile OS war.

You may recall, incidentally, the Kleiner Perkins Caufield & Byers launch of iFund for venture investment opportunities mobile technologies in 2008. It took place at Apple’s headquarters. At the event, the firm heralded the iPhone iOS as the mobile platform of the future. Today, however, Kleiner Perkins is increasingly focused on Android.

Other data points to note regarding the Android disruption include the overtaking of Nokia as the world’s third-largest phone maker by HTC Corp. The Taiwanese company. HTC started out making phones with Windows Mobile OS, but switched to Android and has met with enormous success.

Leading tech consulting and forecasting firm Gartner Inc. is predicting that the Android operating system will have half of the worldwide smartphone market in 2012, supplanting Nokia’s Symbian as the leading mobile OS.

Android, by the way, is not a Google OS, though it is often referred to as such. Though Google bought the original developer of the mobile platform, Android Inc., it has turned over the OS to the Android Open Source Project. The OS is legally open source.

I hope you can appreciate this deliciously ironic development half as much as I do. The open-source movement utterly failed to win on the device they were fighting for, the personal computer. In the subsequent computing generation, however, open-source Linux-based Android has emerged triumphant in mobile devices.

The implications are profound. No longer will the OS owner be able to manipulate or hinder application developers for its own benefit. Innovation in mobile computing will accelerate. In fact, it is exploding.  This wave of innovation will only be good news for early investors in this market.

Yours for transformational profits,
Patrick Cox
Penny Sleuth

May 2, 2011

Open-Source Operating Systems Open Vast Profit Potential was originally featured in the Penny Sleuth. Check out Wall Street’s 5 Most Profitable Penny Stock Patterns Report.

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