Interesting Ask Slashdot posted today entitled Is Open Source Software a Race To Zero? Some good responses from the crowd which I recommend reading. The basic consensus boils down to "Innovate or Die" but there are lots of counter-points and nuances that were not made. One thing I don't hear discussed often is how many really smart Open Source contributors are college students and how their work has the threefold effect of helping the community, getting them a job, and reducing the overall amount of jobs.
In a way it's like a prisoner's dilemma. If you work on OSS in college, you are more likely to get recruited to a job because you have real experience and something valuable to contribute. Perhaps you've demonstrated working with a team or perhaps you've shown creativity. Regardless of what you contributed you added value. And that's comforting to companies and beneficial to the Open Source community.
At the same time, it becomes much more difficult for a company to compete in the software business. At some point the software that a company sells gets to the saturation point. So even if Openoffice is 4 years behind Microsoft Office, it's now serviceable enough to do what 95% of users require. Given the pricetag of MS Office, I choose to go with OpenOffice instead. The result might be the split up or firing of the team at Microsoft. Jobs lost.
So is it that the future is just Bespoke work? Or is there a future for mass-software products of any sort? Right now it's entirely possible to open source code for websites like Reddit and not have it affect your business model because of the network effect. I wonder if a technology comes out that reduces or eliminates the correlation between eyeballs and revenue what developers will do to earn money?