Talk about a provocative headline! But suddenly, recession talk is all the rage amid rising U.S. credit woes and sinking earnings in the financial sector - at least for now. And what about tech? Well, if IBM’s unexpectedly strong 24% increase in Q4 earnings is any indication, things may look especially good for open source.

ZDNet’s Open Sources blog asks if IBM’s results are due to open source?

“Should this count as an open source win, a validation of the open source concept?

I think it should. But there’s more to it than that.

IBM long-ago unified its product lines under Linux and open source. Through projects like Eclipse it has learned how to share basic costs and add value for its customers.

Sounds to me like IBM has learned to leverage both the developer and customer communities for the benefit of all — including Big Blue. It’s worth noting that IBM’s results have a sizable foreign currency component, which means non-US customers made a significant contribution to the bottom line.

On the other hand, ZDNet’s Hardware 2.0 blogger Adrian Kingsley-Hughes post — “Is open source recession-proof?” — offers a different take.

“Well, first off, I think that any business model that relies on volunteers could certainly see interest decline if times get tough. … The flip-side of this though is that being an active part of an open source project is a lot different to spending all day on YouTube or Flickr …”

One reader, Slashdot’s SatanicPuppy, responded this way:

“Far from being bad for OSS, recessions are GOOD for OSS. You lose your job, and freelance while looking for another one…What are you going to use? Companies have a need, and no budget to fill it with commercial software…What are they going to use? Sure, if you specialize in zillion dollar OSS deployments, you’ve got problems (problem #1: You’re mythical), but the true strength of OSS isn’t in giant deployments, but in filling in the gaps…When the gaps get bigger, there we are.”

Last week’s post on open source CEO forecasts for 2008 didn’t spend much time worrying about a recession. But what about you? How will an economic slowdown affect enterprise open source companies? Will they fare better, worse or the same as closed source firms? Post your comments below.

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This entry was posted by Ryck on Monday, January 14th, 2008 at 11:04 pm and is filed under Community, Enterprise open source, Open Source projects. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.