NEW YORK (TheStreet) -- There is a "house of cards" problem that hit Microsoft (MSFT) with Windows 8, and is hitting Apple (AAPL) as its iOS gets bigger. The new version, iOS 8, may not load on older devices, and its bugs are delaying the company's entry into health care. These bugs could pinch investors.
Writing software is like building a house of cards: The bigger it gets, the more complex it becomes, and the more difficult it is to improve and maintain.
This has been known for decades, and was detailed in Fred Brooks' 1975 book The Mythical Man-Month: Essays on Software Engineering, whose subtext was the trouble-filled birth of the IBM (IBM) 360 mainframe. He wrote that software problems don't yield to having people or money thrown at them.
A process such as parallel processing that breaks software problems down into pieces builds teams around the pieces and then coordinates the assembly.
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Open source is no less susceptible to the house-of-cards problem. It is usually managed through sponsors that take responsibility for the code, such as Red Hat (RHT) , or foundations that create shared responsibility, such as the OpenStack Foundation.
But this doesn't always prioritize the needs of big open-source users, which is why some of the biggest, including Facebook (FB) , Google (GOOG) and Twitter (TWTR) , on Wednesday announced Talk Openly Develop Openly.
TODO's idea is that companies that most depend on open source will share experiences, develop best practices and work on common tooling. The outcome is supposed to be faster releases of bigger, better open-source software that will help these companies compete.
This open-source process can work for investors.
Since its initial public offering in 2012, Facebook shares have doubled, and Google's have nearly doubled, while those of Microsoft are up just 44% and Apple 25%. Twitter shares have followed the Facebook pattern since its late-2013 IPO, falling below the IPO price in April but up over 60% from their bottom in May.
This isn't Facebook's first try getting others to help it paint Aunt Polly's fence, as Mark Twain wrote in Tom Sawyer.
Three years ago it launched the Open Compute Project, aimed at helping it build bigger cloud data centers. That group has board representatives from Microsoft, Intel (INTC) , Rackspace (RAX) and Goldman Sachs (GS) , among others.
Although Open Compute was a builder's group, TODO is more of a big users' group. These users have often built their own software, then spun off control of it as open-source projects.
Google did this with its MapReduce program, originally built to answer its own queries, which has evolved into the Hadoop big-data project. Facebook did something similar with a database program called Cassandra.
After Twitter bought a password security company called Mitro in July, it made that code open source.
By getting together formally, the biggest users of open source hope that they can act more like one gigantic software company than a collection of merely huge ones.
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But that "house of cards" problem will remain. What investors most need to understand is that software isn't subject to Moore's Law.
As much as we improve the tools, the management and the coordination of software development, it is still written by hand, and the more complex it gets, the more difficult it is to keep moving forward bug-free.
At the time of publication, the author owned shares of AAPL, GOOG and GOOGL.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage
TheStreet Ratings team rates FACEBOOK INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate FACEBOOK INC (FB) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the stock itself is trading at a premium valuation."
You can view the full analysis from the report here: FB Ratings Report