Open Source Economics

Am 23. Jan, 2004 schw=E4tzte Phil Mattison so:

> I've been trying to understand the economic rationale behind the open sou=
rce
> philosophy, and I think I see an apparent contradiction. From what I've s=
een
> 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.

Yup, a good way to feed the resume. If a project does well, it might also
turn into a job or other income.

> 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 la=
bor
> of those in [1], and B) to generate revenue through support services,
> because they are the only real experts with a particular package.

3. For companies who need software that isn't part of their primary busines=
s
model. The Cisco model, as esr calls it.

4. Interface for hardware. Some manufacturers just need the software to
work, so they can sell hardware. I believe most video card manufacturers
write the m$ drivers for their cards.

> The apparent contradiction is that if the source code is so convoluted th=
at
> 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 econom=
ic
> motive besides [A]. If there is a less cynical explanation I'd love to he=
ar
> it, so long as it is economically practical. As it is, it looks to me lik=
e a
> glorified internship program. That, at least, resolves the contradiction =
in
> my mind.

Look at Red Hat and Monta Vista. Both companies are doing fairly well
providing only Free Software services. The $monopoly is Red Hat's largest
issue. I bet Red Hat has been more profitable than OS/2 was :).

Also, look at it from the customers point of view. All customers of softwar=
e
should demand Free Software. If that's what the customers are demanding,
then that's what the vendors need to provide.

ciao,

der.hans
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