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Joel On The Economics of Open Source
Stephen writes "The ever-incisive Joel Spolsky discusses the economics of open source software in his latest Joel on Software column. Why do so many large companies want to develop open source software? It's not because they have suddenly converted to Stallmanism."
Anyone else misread that as "Stalinism"?
Simple. With no web browsers out there, there wouldn't be much demand for web servers, would there? In this case the strategy is not to grab market share from the competition but, in the words of Dubya, to "make the pie higher!"
step 1: make a inovative open source product that will benefit all involved and distribute it freely.
step 2: ???
step 3: Profit
I thought the article was well worth reading, but the statement that browsers were a good complement commodity to servers seemed strange to me. How so?
Name-brand recognition.
The part you mention is actually the one flaw in an otherwise great article: he mentions that Netscape gave away the browser in hopes they'd be able to sell servers-- which, in the time immediately after the free MSIE hit the market, was true-- but then neglects to mention that this did not work. Which is a large part of why Netscape is no longer a company. For the exact reasons you mentioned-- interchangability and stuff-- Netscape's browser presence meant jack shit for their web server platforms and enterprise servers and such.
(This may be a good time to mention the theory that AOL bought Netscape not just to grow, and not just so that they had the browser to use as political leverage against MS, but also so that they had control of the netscape.com start page. AOL worked out that supplying the browser does give you control over the default start page, which many users will ever change-- which, to a media company like AOL, equates to an ungodly number of hits as your page pops up every time someone opens a new window. Somehow, though, AOL doesn't seem to have used this to the same advantage MSN has.)
Forget that they're supposed to use common protocols and whatnot; imagine that in order to view stuff from a MS server, you need an MS browser, to view stuff from a Netscape server, you need a Netscape browser, etc.
Real life isn't quite that simple... for the basic stuff the browser doesn't matter, but for the more advanced stuff (browser-based administration, XML datasets being transferred around, applet support, etc...) you're going to get better results with the "native" browser.
A better example would be streaming media - you nead a RealPlayer browser to get data from a RealPlayer server - and (to tie it into the browser argument) if you control the web browser, you're in a much better position to control the media browser... or the instant messenger... or the mail client.... etc.
So if 99% of people use IE, and thus use Windows Media Player and MSN Messenger, it's going to be pretty appealing to use the Windows server package, rather than use a patchwork of other people's servers.
Except that with Free/Open Source software, you are being paid: you are being paid with fantastic programs that would be impossible for any one individual or company to replicate. Releasing software Free is the appropriate expression of gratitude to the community.
:Peter
The greatest lie of our market-based system is that time equals money, in all circumstances. (Please note the qualifier.) We should not become so obsessed with money that our activities are dictated by it.
A lot of good points, but the Cathedral/Bazaar point is still a good one.
The argument here seems to be people make free-as-in-beer software because its cheap. But they may also do it because it produces better software (therefore reducing the TOC for the other products).
These two things are not necessarily in conflict.
Frankly, I also think that a number of arguments used are pure Aunt Sallys. Has anyone ever really said IBM have converted to communism? If so, which mental institution were they speaking from at the time?
Joel says Sun made a mistake in releasing Java, which makes hardware a commodity.
I say the reason Sun released Java was to allow all the Windows app programmers to make apps that work on SPARC chips and Solaris as well as Windows.
It was a strategy of weakness, a "Me too" strategy. Not aimed at promoting their hardware, but demoting the more numerous boxen of their competitor.
*And* demoting their competitor's OS, which also had far more apps.
And Microsoft was very afraid of this possibility.
Still is (C#, anyone?).
The greatest lie of our market-based system is that time equals money, in all circumstances.
... like going out to dinner because you enjoy eating out, and enjoy a woman's company, etc.).
Exactly!
If you and your girlfriend are having sex (for free), do you regret it because you spent six hours making passionate love and didn't charge her for it? Does she regret it because she didn't charge you? After all, time is money and hookers typically charge a couple hundred bucks an hour.
(I won't bother with the "did you buy her dinner, then you paid for it" argument, since it misses a number of nuances
Contrary to popular myth greed ins't good, and most of the time time isn't money. Greed may be a reality we have to live with (especially living in a society that deiefies and nurturs it the way ours does), but it comes at a very high cost. I could charge someone for the time I spend boring holes in the sky in my little Beech Sundowner, but since I'm doing it for pleasure, and taking a friend along for a ride doesn't cost me anymore than flying by myself does, the only thing greed would bring me in that context is a little money at the expense of taking a hobby I love and turning it into Yet Another Mundane Job. No thanks.
The same applies to free software. Those who write free software (myself included) do so because we love to do it, not because we are trying to get rich doing so. If you're writing free software because you hope to get rich by doing so, then you're in the wrong field.
The amount of great software I've received for free, not to mention the amount of freedom I've gained in both my business and home life by using free software, more than compensates me for the time I put into it, whether it is writing stuff as a hobby, or testing it (and reporting bugs) for my job. The payoff is in the collaboration, a collaboration to a degree which wouldn't exist between people blinded by their myopic, Ayn Randian Greed.
The Future of Human Evolution: Autonomy
Nice article, until he comes to Java and Sun at the end, then he misses.
1) Java wasn't made from a hatred of Microsoft. Heck, they event contracted Microsoft to handle the Windows implementation of the spec (before Microsoft decided to violate the contract).
2) Sun make implementations for Windows (for the market share) and Solaris (their stuff), because Java is software and Sun is a hardware company that coincidentally also makes software.
The Solaris platform already was semi-crossplatform in that it's another Unix: If you write software that will run on Solaris it can be modified to run on most other Unixen.
So why didn't Sun go the Apple route and make a totally proprietary and closed architecture and operating system? The same reason Apple left their "route" and embraced BSD, PCI and whatnot:
Because proprietary sucks.
If you're the only one going your way, you end up taking all the chances, doing all the work and become your own "weakest link".
If you go with published specs, open standards and shared source, you will get competition, yes, but you will also get better quality though that competition, and you will be able to benefit from the work of others, because you can more easily understand what they do, and be able to match their features.
You win.
It's almost ironic that the author pics such dead or dying companies like Netscape, Transmeta, IBM, etc for his examples
.. in order to dominate the server market. This would have been plausible in, say, 1997.
His point wasn't that it was a necessarily *successful* strategy (although arguably Microsoft makes up for all the other failures) - he was just providing the motivation for companies to adopt open-source, presenting the argument that they're not doing it for moral reasons.
If you think he's wrong about their motivation, go ahead a present a different one. But saying that he's wrong because some of his examples haven't been successful completely misses the point of his article - it wasn't "Why companies should adopt open-source", it was "Why companies *are* adopting open-source".
Anyway...
Netscape is trying to commoditize the browser market
Which is the era which he was talking about...
IBM is investing in open source software to bolster its consulting services
IBM spends a *small* amount of money relative to the amount it brings in from consulting... by adopting Linux and Apache, it can bring in huge consulting dollars without spending the money to develop a whole OS or web server. The money is in the skill used to put together the consulting package (ie. web applications with WebSphere, etc.), not in the commodities (the OS and web server, as well as the hardware, in this case).
Anyone else misread that as "Stalinism"
... this is just a little more extreme than most (and quite a bit less appropriate than most, for a site the prides itself on being a supporter of free software).
Of course not. That was the entire point of coining the term "Stallmanism." It is the use of language to subliminally implant and drive home a particular political stance, in this case a strongly anti-RMS, anti-FSF, anti-freedom (or at least, apathy-toward-freedom) stance.
In short, the usage of such a term is a cheap form of propoganda on the part of the Slashdot poster (the term is not used by Joel Spolsky in the article itself). Which isn't really surprising, since most slashdot article posts have a strong bias in their summaries
The Future of Human Evolution: Autonomy
If I put a dollar value (imaginary money?) on everything I did, *I'd* be Bill Gates. Come on, folks, not everything comes down to money, and it's kind of a flaw in our culture, IMNSHO, that nothing is seen as important unless you can dollar-figure quantify it, package it, and sell it.
This argument from above so are you saying those two hours of your time is not worth any money is similar to the MPAA's "lost sales" argument especially in cases where in reality no sales would have actually taken place -- you can't make income off a job you don't have. More simply, if no one is willing to pay you for doing whatever it is you're doing, you can't make money doing it. In that case, you have two options: you can do it for free because you like to (in my case, the concrete example would be "publish for copies"), or you can go off in the corner and sulk.
Incidentally and additionally, the previous poster's argument only makes sense at the individual level, and not at the organizational/business level. Businesses have to do things that will make them money; that's what they're for. However, further deposition into the logical consequenses of that statement leads into politics and ideology, though, and is irrelevant to this comment.
I'm not a geek, I'm just a clever script.
Yes, but the cost is really widely distributed, so that compensation for any individual is complicated. Let me give you an example.
I run Linux. I also have an HP printer, so I use the hpoj software. I also like the CUPS print spool software. HPOJ and CUPS don't integrate very well. So I wrote, and distribute under GPL, a CUPS backend that allows it to integrate with HPOJ. I contributed about 2-3 hours of time to get this to work. But in return I got hundreds and hundreds of other people's work. I got a working printer and a very flexible print spooler running on a free operating system! And for that I made it so that other people can do that too. I contributed 2-3 hours of work that has value, because it saves time for whoever else uses it (2-3 hours multiplied by the number of users). Thus it contributes back to the economy of opensource/free software, making it all more valuable. I pay small amount of time, and I get back huge amounts of time. Moreover, my contribution makes it so that the next guy will get even more back for his/her contributions. Everyone that contributes a small amount of time, gets paid back much more than they contributed.
What makes opensource/free software different is that it allows large numbers of people to contribute their work to each other, and cumulatively save themselves tons of work. I gladly trade 2-3 hours of work for 2-3 hundred hours of work. It saves me time and money.
I like Joel's article, but it doesn't explain the tradeoff of how people get paid in opensource. It doesn't explain the small amount of effort input for huge amounts of gain returned that opensource/free software allows and encourages. And that's got to be part of the economic equation that explains opensource. It only tries to explain the economics of why IBM, HP, et al, are contributing to opensource. It ignores the fact that IBM, HP, et al, are also trading their small contributions of time for the huge amount of time and money that they save.
Key to financial independence: Spend less than you earn. Save and invest the difference. Do it for a long time.
There's this zen koan:
A lord asked Takuan, a Zen teacher, to suggest how he might pass the time. He felt his days very long attending his office and sitting stiffly to receive the homage of others. Takuan wrote eight Chinese characters and gave them to the man:
Not twice this day
Inch time foot gem.
The day in which you coded that software you gave away for free will not come again. A small bit of your time is more valuable than the largest diamond. It's limited and you can never buy more. Never put a price on your time. It cheapens it.
(BTW, if anyone knows exactly which characters Takuan wrote down, I'd be eternally grateful if you told/showed me, email is jcsehak.at.yahoo.com)
c-hack.com |
The article tries to build from basic economic principles, but conveniently misses one, the problem of free riders.
Actually this is not a failing of the article but a failing of the people the article references. Many people like to think that the reason that Open Source is popular among businesses is because it is "free as in speech" which although being a nice fuzzy-feelgood reason is not a BUSINESS reason. On the other hand, trying to commoditize a certain market while making money of off its complement "giving away the razor and charging for the blades" is a well known tactic amongst business types and is something that can fully be brought to bear with Open Source. In this case Joel's article clearly articulates this point with numerous examples.
However the problem of Free Riders tends to be orthogonal in well executed versions of the "give away razors" strategy. In well executed versions of this strategy, the business is uninterested if the market it has commoditized now has a low barrier to entry as long as there is still a significantly barrier to entry in the market for its complement. Specifically, IBM doesn't care that any Johnny Come Lately can enter the Linux distro business because the same doesn't apply to their consulting or hardware businesses that benefit from the commoditization of the OS.
It's almost ironic that the author pics such dead or dying companies like Netscape, Transmeta, IBM, etc for his examples.. Look, I like these companies as much as anybody for their past, but let's face it..
Anyone who considers IBM to be dead and dying knows nothing about the current state of the software industry.
Of course, the original author never claimed the strategy was a success. He was asking "Why did they do that?" not "Did it work?" His explanation of why they did it makes a lot of sense. They didn't think that making a clone PC would be held to be legal, so their strategy obviously didn't include clones.
So the unspoken lesson here is, you might have a solid economic reason for doing what you do, and still get spanked in the marketplace.
The Mongrel Dogs Who Teach
Where does Spolsky get these myths? Does anybody seriously believe that Gerstner has gone all hippy-love on his shareholders? Has anybody published the idea that Sun and HP are ideological converts to Free Software? Does this even past the "huh?" test?
They're mild parodies of what seem to be mainstream views on Slashdot. You'll find lots and lots of people arguing, for example, that record companies are evil and all music should be given away free. People *love* to hear that IBM is doing work to support Linux, but that the same time don't remind them that IBM is a business. They don't want to hear that. They like to think that IBM is doing this out of the goodness of its heart.
In general, Slashdot represents the ideal of college students without much disposable income.
What I most like of this theory is that hardware is a commodity today. If open source can turn software into a commodity, the real value will be in the people putting systems together (as the IBM example shows).
Most of the slashdot crowd are technical heads so I would say that it is in the best interest of most of us to get GPL'd stuff working, with the possible exception of packaged closed software developers, about 5% of all developers.
This way the money will go to us, instead of CEOs or marketing departments.
When his defense asked, "Which computer has Jon Johansen trespassed upon?" the answer was: "His own."
To expand on the author's analogy of chicken to beef (chicken being OSS and beef being something proprietary); sure, the chicken might be free, but in this situation, you have to butcher the chicken yourself and hire a chef to prepare it for you, whereas you can simply walk up to a the counter and order a hamburger./I.
Uhm.... Bullshit.
The secondary costs of installing and using MS-Windows is about the same (or perhaps more) than installing and using Linux. That, coupled with the primary costs of using MS-Windows (licensing and media fees) puts MS-Windows at a higher cost than Linux.
To extend *your* extension of the analogy, it's like you can walk into a diner and order a hamburger, or you can get a chicken sandwich for a couple of bucks less, because the chicken costs the restaraunt nothing.
This idea that MS-Windows has no secondary cost because it has a primary cost is stupid.
Microsoft is to software what Budweiser is to beer.
I don't think even the most rose-glassed optimist thinks that IBM hase jumped on the Linux bandwagon so enthusiastically out of "the goodness of their own heart"
OF COURSE IBM is doing so out of a business/profit motive. I defy you to find any actual person who thinks otherwise.
But the point is, it doesn't matter what IBM's motivation is - as long as IBM plays by the rules that govern Free Software, everybody benefits (including IBM)
Do I care if my neighbour acts nice to me because he likes me, or if he's buttering me up for future favours, or because his God commanded him too and he's in fear for his soul if he does not? No. All that matters is that he be a good neighbor.
And there is every indication that IBM is a good neighbor to Free Software.
The news flash here is that IBM has managed to convert itself into a company whose business plan is based around contributing to the common good, rather than locking everybody into proprietary, IBM-only solutions, as had been their modus operendi for the previous 40 or so years.
DG
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