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Forbes Ventures Bold Predictions For IT, Linux
LinuxThis writes "Everyone's favorite, Daniel Lyons and other Forbes journalists have made some bold predictions about IT in 2004. Interesting quotes include 'Microsoft warms up to open source, and tries to make a buck off it', and the best, from our main man Daniel Lyons himself: 'The end of 'free'. Free didn't work for dotcom pet food stores, yet much of the rhetoric around technologies like Linux and voiceover-IP still involves this crazy notion that companies can make money by giving things away. They can't.' Even better, he suggests: 'SCO Group will settle its lawsuit against IBM. Both sides will declare victory. The Linux community will turn on IBM.' This is interesting considering his previous observations about OSS.."
...to anyone, technie or luddite alike, that IBM has a vested interest in seeing this lawsuit through to the end and making sure SCO is crushed into a fine-grained dust.
Yes, it would probably be cheaper for them to stop short. But that's kind of like negotiating with people who take hostages - you do it once, and it encourages others. Which is why this one is going all the way to the end, and IBM will not settle for anything less than complete victory.
To make laws that man cannot, and will not obey, serves to bring all law into contempt.
--E.C. Stanton
It's not 'the end of free' for Linux by any means. Debian, Gentoo, LFS, Slackware (probably) and many others will still be free because of either their non-comercial status or their comitment to the community. After all, who wants to pay a company to use software they wrote? Not me ...
Is that what they call a blow torch being applied to the Belly of the Beast these days?
It is possible to make money giving stuff away for free, but you have to be very precise about how you do it. You just need to give out enough of your product to make the public want the stuff you need to pay for. A good example of this is the IRL company 'Primerica'. They're a financial managment service that gives out financial evaluations for free. That is, they will take what you make, how much you want to retire off of, how much debt you have, etc and figure out a way to make everything managable and possible. However, they make money off debt consolidation so you can pay off your bills faster, insurance, etc. You go in, get everything sorted for free, and then hopefully you'll get your loans and such from them. They're making a very large profit from this strategy, from what I can tell. Another good example is a band who releases low-bitrate MP3s for download off their website. You get the songs and can tell if you like them or not. However, if you want the versions that don't sound poor with all the case artwork and such then you'll buy the CD.(This is what got me to buy both of Rilo Kiley's CDs.) I've noticed that the reason a lot of these companies fail at selling stuff by giving other stuff away is because they give out the wrong stuff for free. It's like crack - give them just enough to give them the need for your product and you're set. Kinda like Google's expert search. Can search google for free, but if you need help finding that one obscure thing then you can pay to have others with a lot more experience do it for you. I'm rambling. Damn, do I love coffee.
Why is everyone so afraid of the concept of anything being 'free'? Is it that radical of a proposition that a broad-based community can create and support an infrastructure without the need for it to turn into a for-profit corporation? Community WLANs, VoIP, Open Source projects....aren't these things all technologically and socially proven by now? All of these analysts and experts can't be that shackled to the bottom line, can they? Paradigm shift, anyone....
...if I can get a linux distro that recognizes the bloody luscent driver that came with my a20m thinkpad.
Now centering ourselves on the topic. I love Linux, but it's still mainly for the computer geek or the Soho user that has time enough to experiment and discover things for him/herself.
Distros has to center themselves. The fact is that many of them offer too many options and most people are a little bewildered: "Geez I liked it better when it was only Windows, Office and IE."
On the other hand, the way LINUX has implemented new solutions over the years (USB, Firewire, all sort of mass storing devices, and so on..) it's simply amazing.
I love the current policy of offering things free for download or very cheap in a package and charging for the know how. When more and more people say to his boss Geez, I like Linux plus OpenOffice better, and the boss adds some figures in his head we'll start seeing things change
... y Dios vio que Linux era bueno... Genesis 99.666
"...(and unreliable) hardware" *cough* *sputter*
I might call Sun hardware a lot of things but unreliable ain't one of em. Sorry but the only x86 hardware that comes close is the top end of the Proliant line and the "mainframe" stuff from Unisys. As far as performance goes remember that mainframes are often several generations behind the bleeding edge and yet most of the worlds usefull computing is done on em, some of the time its about knowing that a job will get done on time, not how quickly it *might* get done.
There are 4 boxes to use in the defense of liberty: soap, ballot, jury, ammo. Use in that order. Starting now.
The shills at Forbes are so obsessed with money that they have no understanding at all of the technical aspects of SCO vs. IBM, and live in a reality distortion field. Remember the outrageous article that called linux users terrorists? And of course, the "Linux's hit men" article showed that the author is unable to perceive the difference between GPL and public domain. These people are mentally retarded, there's nothing else to describe them.
If they were dealing with an entity with lots of money they would likely have been sued for libel or whatever, but since its a community they can take their liberties with their "analysis" and "predictions". When I looked at Truman holding up a copy the Chicago Daily Tribune making fun of the analysts' predictions (in the recent cell phones article), I realized that this is perhaps what we need. And in fact, slashdot could be the ideal vehicle for that. What I mean is, if we had articles laughing at them and ridiculing them and exposing their idiocy every time one of their tech "predictions" went hopelessly wrong, and if some other news outlets picked up on it once in a while, then may be it would knock some sense into these morons' heads.
Another ridiculously bad prediction in his article (unrelated to OSS but I'm sure willl be fascinating to slashdotters) is his final bold claim of "To repeat last year's prediction: "In 2004, Nintendo will have followed Sega's lead by exiting the console business." In 2004, it will." This guy obviously doesn't pay much attention to any sales numbers outside the US where Nintendo is well ahead of Microsoft in terms of console sales worldwide. In fact Nintendo was close to getting caught up with MS in North America but a shortage of Zelda bundle Game Cube's towards the late stages of the holiday season caused a slight drop in sales. He's just trying to make a lot of US corporate friendly predictions get people talking, he either doesn't believe what he is saying or is simply looking for attention. A lot of it is pretty ridiculous.
The method of forecasting by asking a few people what they think is going to happen is called the Delphi Method It is, in my opinion one of the overall weakest methods by far, and especially if the views are collected the way Forbes has done. In normal practice the initial and raw opinions are improved by feedback to the group for more refinement, which obviously has not happened in the Forbes article - hence, the almost idiotic "predictions."
And as you rightly said, these people don't have the faintest clue as to what is happening. Their job is to get paychecks by telling their clients what they want to hear ... and they will keep on telling it ... Henry Blodgett anyone ?
There are tons of other methods to do Technological Forecasting, (an article that I wrote many years ago) and I wish some more work that has more solid basis is presented for Tech Forecasting at /. We deserve better "predictions" than this ....
To see a world in a grain of sand, and then to step back and see the beach where the sand lies
The end of "free," huh? So, the way I read this, just because someone failed to make money off of an untenable business model, the people who make and use Linux, who weren't doing it for money in the first place, are going to fold up their tents and head off into the desert?
The more I read pieces like this, the more I think that people like Lyons are just plain incapable of "getting it." Their world view just doesn't allow for people doing a large-scale project like Linux because they enjoy it, and doing such a good job of it while they're at it. So, they try to map what the FOSS community does onto their world view, and it's hardly surprising that the mapping looks pretty strange to us.
Ah well, the FOSS community will continue to do what it's been doing all along, irrespective of what people like Dan Lyons thinks of it. Happy New Year.
Someone you trust is one of us.
IBM could hardly care less about SCO's fate. What is at issue here to IBM is the far more important issue of their software systems' legitimacy in the eyes of the market. SCO has done far more damage to that reputation than anything Microsoft could ever dream of, given their position as a clear competitor to both IBM and SCO. Since SCO/Caldera was very much a Linux company, their FUD rumors have had a tremendous chilling effect.
Now, there is no way to undo that damage with a settlement, as far as I or anyone I've read on Groklaw can tell. Even if SCO admits egregious errors in public, without a clear ruling from a judge and/or jury on the issues of IBM's rightful ownership of their e.g. AIX code, all of IBM's competitors will forever be able to twist the knife in their back. It no longer matters what SCO says or does, because their credibility is only intact with their own investors at this point. IBM, on the other hand, needs to clear their name.
Air is free, yet people make money from scenting it, compressing it or incorporating it into other products like balloons or ice cream, and selling the result.
Water is free, yet people make money from purifying it, bottling it or flavoring it, and selling the result.
Linux is free, yet people make money from packaging it, enhancing it and supporting it and selling the result.
Linux, like air and water, is free for all, yet through effort and ingenuity one can still profit from it.
Someone you trust is one of us.
http://www.datanation.com/fallacies/falsean.htm
It's really a shame you lead with a fallacy because it highlights your bias and obstinance.
By its very definition, "Open Source" must remain free. Perhaps you mean you that will cease to exist? Well, perhaps. But if it does then it's because it's unable to keep pace with the innovations from the non-Open Source development programmes. That's possible, but not likely.
1. Lisa DiCarlio: More cash-rich tech companies start to pay dividends. Microsoft continues to struggle to make its software secure, which means another great year in 2004 for Symantec. The complexities of integrating Legato and Documentum weigh down EMC. HP's stock doubles. IBM buys SCO to shut it up.
These don't look too far-fetched except for the last one. If anything I've seen on groklaw has any connection to reality at all, IBM will fight to the end in this particular battle. Score 0.7 tempered by a -1, Unlikely...
3. Daniel Lyons SCO Group will settle its lawsuit against IBM. Both sides will declare victory. The Linux community will turn on IBM.
IBM vs SCO as before, IBM will not stop at anything less than full victory. And IBM as the new enemy? Whatever would have happened to Microsoft then? He might be seeing something I do not see of course, it just seems too unlikely. Score 0.2
4. Victoria Murphy: Microsoft warms up to open source, and tries to make a buck off it.
Much as I'd think that would be a smart move on MS' part, I am not sure if they can leave their current closedness behind in time. To them it would be a big change. Maybe this explains what happens to MS in the previous prediction. Score 0.6, I Wish it Were True.
What does concern me is that some managers may read all of this and not realize it is all matters of opinion.
SIGBUS @ NO-07.308
Yes, he is. It's getting to the point that he's starting to sound like one of those "Apple is dying, Apple doesn't have a future, Apple can't compete, Apple is dying" drones that go on year after year.
He seems to be trying to start that tradition now with Linux/Free/Open source software, even though it's going strong now for 10+ years and getting stronger and stronger.
The guy is a joke. And it's obvious no one who reads Forbes takes him seriously, as Linux still makes huge inroads to business.
"Music is everybody's possession. It's only publishers who think that people own it." - John Lennon.
I predict that Daniel Lyons will, after continuously having made completely false analysis and predictions on everything from SCO to Linux, either lose his job at Forbes (watch that MBA smile dissappear in a split second when he gets the slip) or be moved to the comics section, where he will at least do somethiing productive at Forbes.
I see this guy (and most other so called tech analysts for that matter) as one of the worst things to ever happen to both markets and journalism. This is one of those people who were still pushing the dotbomb revolution when it had already collapsed, and then, in true two faced lying son of a bitch sell your soul marketing fashion, turn around and say they had seen it all coming and that people are dumb for not having listened to him.
I think that the best remedy for scum like this would be to actually give them the job of ceo of some tech company and see how long it takes them to run it into the ground.
I see five conditions under which the free model can work.
1) Price insensitive customers: "Free" can work as long paying customers are tolerant of paying higher prices to support the cost of providing some level of free product or service. For every "free' customer (e.g., who does not pay for the bandwidth & IT to provide the download) there must be a paying customer who is willing to make up the difference. If two companies are equal in quality and features of the product and service offered but one company is "giving it away for free", then the free company will have extra costs from offering that free product/service and have to charge higher prices. If customers are very price sensitive, they will eschew the company that offers "free" wares and pay lower prices at the non-free company.
2) Low total cost of "free": The unreimbursed cost of the free product or service must be low relative to the revenues generated by paying customers. This occurs under a combination of two subconditions. First, the marginal cost of the free product or service might be low (e.g., the modest cost of bandwidth). Second, the fraction of freeloading customers might be low (e.g., something prevents everyone for taking advantage of the free offer). The lower the marginal cost, the higher the tolerable percentage of freeloaders.
3) Customers who contribute services: The viability of free is enhanced by service contributions from customers. Thus the definition of a paying customer goes beyond money -- some customers provide valuable services in the form of code contributions, beta testing reports, and support on discussion forums. These contibuting customers provide a voluntary service in exchange for the "free" product. Although such customers do not help pay the bills, they do reduce the organization's costs (eliminating salaried programmers and helpdesk personnel) and they increase the value of the organization's offerings (thus justifying the payment of subsidies by paying customers).
4) Nonconfident customers: If customers are not confident of their choices, they may prefer the "free" model as a way of try before you buy. At some level many proprietary software companies do this by offering "free" trial versions of their software. The companies give away a time or function-limited version of the product and get paid for the full/unlimited version of the product.
5) Obligatory follow-on purchases: "Free" can also work if acceptance of the free product obligates the customer to buy additional products or services down the road. Giving away the printer in order to gain an ink cartridge customer is a good example of this. The challenge, for the provider of the "free" item, is to segment the customer population to ensure that only heavy users of ink cartridges, for example, will accept the offer of a free item (maintain a low percentage of freeloaders who take the printer but don't use it much).
These are neither mutually required, nor mutually exclusive conditions. Some combination of all 5 can ensure the viability, even the superiority, of the free model over more pay-for-what-you -get business models. I'm sure others here can think of other conditions that enhance the viability of the free model.
Two wrongs don't make a right, but three lefts do.
It's simple economics. Everything must be assigned a price and the purpose of production and distribution is profit.
Anything that reduces profits is, by definition bad. Anything that reduces profits reduces the GNP which is, by definition, a social evil.
If a thing has no price it has no value. Replacing things that have a price with things that don't reduces riches. The more of these things you have the less you are "worth." (As if value only meant "price." The primary value of your house is that it provides you with shelter)
From the standpoint of economics free software is just looney. That would be like cars just being free for the taking, like leaves on the ground in the fall. Everyone would be poor if they just get what they wanted like that.
Wealth means buying shoddy things with a high "value." Less stiches, more riches.
Of course things that are "free" can be used as well. Since the river next to your plant has no price it's fine to use it to dump toxic waste into. Clean water and air have no value because you don't have to buy them. They're just there until you pollute them.
Now businesses that aren't directly tied to the ideas of the software industry as part of the their own profit or adding to the value of the GNP are now starting to realize that OSS is like that stream next to the factory now. You can just use it. For free. (And maybe pollute it, but that'a another post).
But if you're in the software industry or an economist the idea of reducing an item that can be produced for free and "sold" (over and over again to the same customer) at usurius profit margins to free as in leaves on the ground is just daft. It can be literally unthinkable.
Of course from the "consumer's" point of view software is truly a consumable. You buy it. You use it. But you don't have anything of your own for it. Your "worth" is reduced. Then you have to buy it again. The flow of "value" is all one way.
But from the economic point of view that's a good thing. There is a schizophrenic rift in economic theory between man the consumer and man the producer.
Everyone's heard about it, but no one these days has read it. Pick up a copy of E.F. Schumacher's classic work "Small is Beautiful." It delves into these very issues.
Finding a copy of Stephen Leacock's (professor of economics at McGill) "Too Much College" wouldn't hurt either.
Even the autobiography of G.K. Chesterton has some interesting things to say about the issue, just ignore the religious stuff if you are so inclined.
KFG
I disagree that IBM will settle with SCO. That prediction is just plain silly.
I do agree that the Linux community will turn against IBM, not not for any reason Lyons would be able to see from his relatively technology-free writing cubicle.
The Linux community will turn against IBM after the SCO dragon has been laid waste and after the community figures out IBM's model for making money from Linux. There aren't too many mysteries in the former, but the latter seems little understood. Yet.
IBM is making money right now from Linux, not by charging for Linux itself (although they slipped recently and wrote of "licensing Linux" in the same terms as their oldline OSs, a Marketing brain fart, no doubt) but by charging the user for permission to use the CPU.
How can this be? Don't you own the CPU?
Well, yes and no. If it's a traditional IBM PC or pre-pSeries RS/6000, yes, you own the CPU(s) and you can run any free software you can manage to load. If you look carefully, though, you will notice that such straightforward platform designs are disappearing from the IBM landscape.
The trick lies in the mainframe-izing of unix and Intel chips as they are packaged and offered by IBM, following a very old model that has served them well since the 1950s. Imagine a PC for which you have to pay an annual proprietary BIOS license and you'll begin to see how this works. Sure, load any OS you want, but you can't load and run it without the help of the BIOS, and the license fee you'll pay for permission (and software) with which to do that will be based on the OS you want to run. IBM is not going to allow itself to be trapped into competing in the commodity server box market.
In the 1950s, when punch card machines were all the rage, IBM didn't sell them to customers -- they rented them. Your punch card machines would be delivered chock full of features, mostly in the form of expensive relays hidden under the skirts, but the Customer Engineer would install and remove jumpers to disable any of the features you weren't paying to use. The profit margins were so high that even in those days of super-expensive hardware the fact of millions of disabled relays sitting unused in customer machines was a cost IBM was easily able to absorb.
The way this translated to IBM's mainframe scheme, which they are now moving to the "new" RS/6000 -- the pSeries platforms -- and others, including the Intel-based "z" machines, is to surround the processor(s) with a complex of hardware and software such that you can't gain access to the CPU(s) without licensed IBM software that is separate and distinct from the OS. What it boils down to is that yes, you can buy the CPU(s) but no, you don't have permission to use the CPU(s) without paying recurring license fees exclusive of whatever, if anything, the OS may cost.
Right now you can run Linux on monster S/390 mainframes, but not for free. In the S/390 world you have to pay for a license to use each processor in a S/390. How much you pay depends on the value IBM has placed on the use to which you want to put the processor. It might cost $250,000 to "open" a processor for MVS but only $125,000 to "open" the same processor for Linux. To the Linux community member unfamiliar with IBM's mainframe business model this may seem like cause to retch and reach for the barf bag, but for mainframe customers well-accustomed to paying Big Bucks to IBM for everything, including the time of day, it's an incredible bargain.
With the introduction of the pSeries platforms ("pSeries" is not just a new name for the RS/6000 line), IBM's mainframe business model has arrived in the PowerPC unix server world. Same for IBM's Intel-based "z" platforms. The older RS/6000s will be orphaned as IBM drops support for them
Look at the bright side: there's always seppuku.