Mixed proprietary and open source business model: the case of Android

I blogged about an insightful article about open source business models posted by Mike Olson, Chief Strategy Officer at Cloudera. 

Mike Olson makes the case that there were very few successful large stand-alone open source vendors.  He counts Red Hat as the only one that has not been acquired or has not failed.   The problem Mike Olson sees with open source products is that as they becme large and generate signfiicant revenue, it is easy for potential competitors to create competive products because the source code is available.

Android is an interesting case that seems to support Mike Olson's hypothesis.  According to a recent article on ars technica, Android has always been a combination of open and closed source (proprietary) components.  Originally, the closed source code comprised just clients for Google's online services, Gmail, Maps, Talk, and YouTube.  Google kept these apps closed source, but built the rest of Android as an open source project (AOSP).

But as Android increased its smart phone OS market share to about 80% at present, new closed source apps were introduced to replace existing open source (AOSP) modules.  Apparently, as soon as the proprietary version was launched, all work on the AOSP version was stopped basically turning it into  abandonware.  According to the article when "Google rebrands an app or releases a new piece of Android onto the Play Store, it's a sign that the source has been closed and the AOSP version is dead."  The result seems to be to make more and more of the Android you experience on your smart phone "Google" proprietary.  It would seem that this would make it increasingly difficult for potential competitors to create competitive products from the AOSP source code, which supports Mike Olson's argument that when open source products get to a certain size they need to adopt a mixed proprietary/open source business model to remain viable from a business perspective.