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The Open Code Market
The Open Code Market
The peer reviewed magazine FirstMonday has published one paper I wrote on the business possibilities of Open Source titled "The Open Code Market".
In short, The Open Code Market aims to become a Free Market for software, as well as a market for Free Software. The OCM introduces into the Free/Open Source movement an economic incentive, to help align the priorities of Free/Open Source developers with those of the end users.
Between the final draft and publication, I received many valuable comments on the idea. I am very grateful to all those who dedicated some of their valuable time to read the paper and make insightful comments.
Some of those comments led me to an earlier similar effort by Brian Behlendorf named SourceXchange (originally at www.sourcexchange.com). After contacting Brian, his comments were probably the most valuable, since he had gone through the the actual proces of running a project similar to what I am proposing.
His main line was that:
a) while the market made profits, it did not reach the levels of profitability that were expected in the middle of the dot.com boom, and investors looked for other (more lucrative) endevours
b) That the dot.com boom also addedd costs (high salaries, etc) to his attempt and
c) that it is difficult to commoditise software creation due to the uncertainties over time / effort required to write the software, and the difficulty of the role of "project manager".
My line on all this is that
- The project may be easier to develop now as expectations for profits (and costs) have decreased, and that sourcing on low-cost countries (i.e. India, Vietnam, etc.) would reduce costs significantly.
- I also expect that the market will take off only as Free Software/Open Source (Linux in particular) moves to the mass market of the desktop, thus generating the necessary economies of scale, visibility and consumer-mass. In my idea, the target end-users of the market are not IT companies, but mainly individuals with no IT knowled (nor desire to acquire it) and Small and Medium Enterprises with small or no IT departments.
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I could see this kind of thing working as a try before you buy market - use the code and pay when you release the product.
-- "Can't sleep, clowns will eat me!"
I'm working on an open-source location search (Mobilemaps) which aims to create a collaborative market for developers/portals using it.
The right service in this case is geotargeted advertising for local businesses wanting to gain some visibility on the net. It's an extension of a proven business model used by search engines like Google.
The plan is there's no need for developers to be paid for their code, they just earn money by participating in the advertising service by operating the location search for their local area.
The OCM introduces into the Free/Open Source movement an economic incentive, to help align the priorities of Free/Open Source developers with those of the end users.
The one thing Microsoft has done well is focus on end users. They are able to hock woefully inferior file, database, and mail server solutions because they make sure that Word's macro engine can cook your breakfast for you if you want it to. If users want a feature, it will be in the release product - performance, stability, and security be damned.
I don't necessarily think we should follow MS in this regard. It doesn't seem to have really worked out for them. Let's focus on what is really attracting people to free software - choice.
who are those slashdot people? they swept over like Mongol-Tartars.
Here is a question I have had about open source code since taking a computer ethics course and also wondering whether we as computer professionals should be certified.
If company A is using an open source product and said product causes a customer of company A to lose millions of dollars whos is liable? Some may say company A is liable which may or may not be true, but lets remove company A now. Many businesses want someone to be "responsible" for the software they use. If that software is written inhouse or by a third party then the liability is obvious. If open source is used would you go to source forge (as an example) and get the user ids working on the project and sue them for liability? You see businesses can't just think about what is the best piece of written code, but also perhaps which piece of code will cover its backside the best. Is that the best situation? I do not know, but it is a situation that exists, why do you think major corporations and even small business owners have lawyers and liability insurance?
That's a good point and the intimately related, if less eloquently stated, question is whether ideas really should be sold as property at all.
I've been on both sides of the fence and technically I still am, but I'm a lot closer to being all the way on the FSF side these days.
For years I've worked in educational multimedia publishing and I've seen the market go all to hell, but I'm still in because I did so much work in the past that there's no such thing as being out. New work in the same vein is a like second nature so I still do it although the profits are god awful slim.
Obviously that stuff is all very Microsoft and very much based on images of magic secrets and such and everybody is selling bit of information they can possibly package. It's such bullshit. It's just a big orgy of trying to screw people.
But seeing thast despite being so "competitive" there's still next to no money in it, so I've been developing a forums web site all based on open source and I'm so much happier with the latter. The whole point of this forum isn't to make momey, it's to develop a knowledge base.
Now you can say bring up the "how do you pay the bills when working for free" issue and this has come up plenty already. But the point is that the money sucks either way. By just dropping the whole issue and getting on with using a free and open forum to focus on a new and specific skill set, you can get onto making products that you can sell instead of selling data.
To me this has become the bottom line. You shouldn't sell data. I do it myself, but I'm coming to the conclusion that it's simply the wrong approach. If the information you're selling can be used to make a product then why not sell that product. If the information you're selling doesn't make a product, then why should it cost?
As for services like education. I seriously think those are things that governments should be able to support through taxes. We don't need a free market in educational software materials. We already have one and it is so fucked up.
Sounds like he's proposing what I've already done, pubsoft.org. We take tenders for software, whether for entire new pieces of software, or improvements to existing software, and seek to put together developers and users. Multiple funding models are supported: matching grants, whole grants, or the Street Performer's Protocol. We've funded the up2us program (which never made it out because of the difficulty of tracking up2date development), and are currently funding FreeS/WAN, and GNU Radio.
-russ
Don't piss off The Angry Economist
This initiative is doomed to fail if they do not have very strong policies on IP. The GPL provides no guarantees on IP; for example, I could implement a patented algorithm and release it and users could get sued.
The article does not even mention the words "intellectual property." Something to consider!
"...a lemming is a little mole-like creature that once in a while commits a mass cuicide."
This article points out that lemmings "do not, however, commit mass suicide by leaping off cliffs, a myth compounded 45 years ago by Walt Disney's White Wilderness film - which showed lemmings apparently going to their doom."