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Now, with the improvements to open-source software, using products such as Red Hat Linux, Apache server software, MySQL, and JBoss is a viable option, according to Kalanick. In the past, one had to have plenty of technical know-how and patience to use open-source software. Although tech know-how is still required, the programs have gotten much easier to use and the support much better.

Open-source software was also a key for Aaron Levie, CEO of, a remote file storage company, which has just been launched. Levie wasn’t around in the boom days, but he says that standardization makes the software “good for development, troubleshooting, and to get work done.”

In a statement that will likely strike fear into the Suns, Oracles, and Microsofts, Levie assesses the attitude of his fellow 20-something entrepreneurs: “My extended network is all in the younger crowd. I don’t know anyone who’s not developing on Linux.”

Another company that might find itself feeling the heat from this trend is Apple. For decades, the Cupertino, CA-based company has dominated the education market, with deep discount pricing and software and easy-to-use interfaces. Not surprisingly, the open source/commodity hardware trend is hitting this market, too.

On August 4, Linspire, a San Diego-based company, announced a deal with the state of Indiana to provide every high-school student in the state with a desktop computer running Linux. The project will use computers from Wintergreen, a low-cost manufacturer, and Linspire software.

“We came in substantially less than other solutions,” says Kevin Carmony, CEO of Linspire. “It’s a one- or two-year rollout period, and now there’s some discussion to make this K-12, not just high school.” Courting this market has another major benefit, as Carmony points out: “With the education market, you can influence the future of America.” (Read: future buyers of software and hardware.)

But for Kalanick and others the next generation is now.

Asked to express the importance of open-source software and cheap hardware, Kalanick had to think at first: “It’s like asking the inventor how important the light bulb was that was in the room where he did his work. It’s so commoditized and such a small portion of what you think about now….But, if it weren’t there, a lot of entrepreneurs would be in trouble.”

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