Open Source Economics

Phil Mattison wrote:
> I've been trying to understand the economic rationale behind the open source
> philosophy, and I think I see an apparent contradiction. From what I've seen
> so far it seems there are two economic motives for contributing to open
> source projects. (Ignoring those who do it just for fun.)
>
> 1. For young programmers making their mark, it is an opportunity to gain
> experience and prove their worth, enhancing potential for future paid
> positions.
> 2. For companies with proprietary software that doesn't sell well as
> shrink-wrap, it is an opportunity A) to reap the benefit of the unpaid labor
> of those in [1], and B) to generate revenue through support services,
> because they are the only real experts with a particular package.
>
> The apparent contradiction is that if the source code is so convoluted that
> you really need the services of those in [2], it amounts to "vendor lock-in"
> in practical terms, which is consummate evil in the minds of the FSF, or so
> they say. If nobody really needed those services there would be no economic
> motive besides [A]. If there is a less cynical explanation I'd love to hear
> it, so long as it is economically practical. As it is, it looks to me like a
> glorified internship program. That, at least, resolves the contradiction in
> my mind.

Interesting points, however, consider this. A piece of software is dependant
upon the health of its owning company to survive. If that company fails (I am
speculating here) one of three things happen:
1) Company and software vanish
2) Company vanishes but GPLs software
3) Company sells software to someone else
So ultimately all software will either sit on a shelf somewhere thus vanish or
be released under some open source license and continue to live on. As some of
the open source projects continue to grow they will become quite good and they
themselves will be very hard to compete with. And companies don't last forever.

So consider a future where Microsoft dies ... lets say 10 years down the road
... after 10 years of work on OpenOffice ... roughly competing with MS Office
... where will OpenOffice be? In a very good position. What will MS do with MS
Office?

Actually the thing that made me think of this was the attempted acquisition of
Peoplesoft by Oracle ... and Oracle claimed they would discontinue the
Peoplesoft software. That is rather inconvenient for the people who have paid
millions of dollars for that software. If they were using open source software,
the worst that could happen is that people could stop actively developing the
product. Well, that won't keep people from using it, and since its open source
there will probably be lots of consultants you could hire to fix things for you.

So, ultimately software has to be opensource to survive in the long run. Thats
not to say there won't be proprietary software .... but the stuff that everyone
uses will be open source ... in several hundred years at least.

Austin

PS - OK, this may be a bit excessive, but I think some of it makes sense.