NEW YORK – Is the concept of open-source finance a contradiction in terms? That was the question posed to a panel at the O’Reilly Money:Tech conference here Feb. 6.
The question spawned a discussion as to whether open-source technologies were fundamentally at odds with the zero-sum world of capital markets and whether it is possible to make money while sharing intellectual property.
Apparently, the short answer is no. Investors of all sizes are taking advantage of open source to share technologies, ideas and find more profits, panelists agreed, belying the notion that there is a contradiction between the open source and capital markets worlds.
James Altucher, the president and founder of Stockpickr LLC, a subsidiary of TheStreet.com, said value resides in the combination of open-source software and the services provided on top of that.
“Companies in this space need to differentiate themselves by building open-source applications that give access to data and providing services around that,” he said.
That is the strategy adopted by Graham Miller, co-founder and CEO of Marketcetera, which provides open-source software for automated trading systems.
“The game for us is creating the platform and then supporting others who want to develop on top of it. Anyone who wants to can use any of the pieces of our system they want to as they build their own, which enhances their ability to make money since it just doesn’t makes sense to develop everything from the ground up,” he said.
Miller admitted that companies need to determine the benefits of using open-source technologies and sharing code with the community versus the benefits of keeping that proprietary.
Stephen Bate, vice president of software development at FOLIOfn, an online brokerage firm, noted that “open source helps people get to market faster, and in many cases lowers the cost.”
Are Open Source and Capitalism Worlds Apart?
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Wikinvest, a research portal where users can contribute information on company profiles, investment concepts or chart analysis, will soon launch a new data service that compares the productivity and performance of specific companies, said co-founder Michael Sha.
Wikinvest is one of a growing number of investment sites leveraging the idea that good investment advice is not restricted to professional analysts and money managers but can come from individuals.
Sha said this service is a more thorough and easier way to compare company metrics than Yahoo Finance and the other finance portals. It will provide non-traditional metrics like which airlines have the lowest fuel and non-fuel costs per available seat mile, he said.
The new service will seed the wiki with data on companies in approximately a dozen industries and then count on members to fill out the rest, Sha said.