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Tocqueville Blames U.S. IT Troubles On Free Software

twitter writes "The group that told us closed source was more secure than open source, now tells us that "Open source software, also described as free software, is the neutron bomb of IP" that will destroy 85% of the market value of US companies and drive companies who are currently outsourcing to "draconian measures even worse than outsourcing." So, there you have it, free software is responsible for bad laws, out sourcing and bad hair days." (Remember who funded the same group's report on open source security?)

23 of 642 comments (clear)

  1. Same guy by Anonymous Coward · · Score: 2, Interesting

    Isn't this the same guy we were saying was so smart the other day because he predicted patent problems for penguins?

  2. Am I the only one? by grasshoppa · · Score: 1, Interesting

    Call me naive if you must, but am I the only one who doesn't really care about IP laws? Wouldn't it be more innovative if we got rid of the ip laws and let it be free reign on creation and development? Then, the market truely would be customer driven.

    Without IP laws, companies would be forced to do as good of a job designing and implementing the product for fear of a competitor coming along and doing it better than they.

    Why the hell *do* we have these laws?

    --
    Mod me down with all of your hatred and your journey towards the dark side will be complete!
  3. You know... by blackholepcs · · Score: 3, Interesting

    I'm sick of all this crap about free software is the devil. Free software isn't the problem. Crappy software and hike prices and outsourcing are the problems. If companies who charge for their software would quit producing fodder and being dicks, free software wouldn't be an issue for them. Maybe they should just start producing quality products at a fair price that are made by people who speak the same language as the country they are selling the product in.

    --
    Halitosis - (n.) Halle Berry's Camel Toe.
  4. Meanwhile in another story...... by MrIrwin · · Score: 4, Interesting
    There is a report about the explosive growth of smaller software companies offering IT solutions specifically tailored and maintained to local customer requirements.

    A large service industry that is not outsourceable.

    --

    And if you thought that was boring you obviously havn't read my Journal ;-)

  5. One Question... by Chordonblue · · Score: 2, Interesting

    What Linux-based company has been convicted of running a monopoly?

    Yeah, I know, you'll 'get back to me'.

    --
    "...Well, there's egg and bacon; egg sausage and bacon; egg and spam; egg bacon and spam; egg bacon sausage and spam..."
    1. Re:One Question... by Swamii · · Score: 1, Interesting

      IBM.

      --
      Tech, life, family, faith: Give me a visit
    2. Re:One Question... by Chordonblue · · Score: 2, Interesting

      Yes, but this was before Linux AND... IBM does not control Linux, per se at any rate.

      --
      "...Well, there's egg and bacon; egg sausage and bacon; egg and spam; egg bacon and spam; egg bacon sausage and spam..."
    3. Re:One Question... by Minna+Kirai · · Score: 3, Interesting

      This kind of over-generalization and mud slinging doesn't help anyone.

      Microsoft is one specific legal entity. By definition, an attack against it is not a "generalization".

  6. Re:Business Model by MrIrwin · · Score: 3, Interesting
    "There are a lot of businesses making some fine money from selling that free software. Redhat, Gentoo,"

    Of course Gentoo's founding father and chief architect had to throw in the towel recently because he was not making any money from it and had run up $20,000 of debts.

    --

    And if you thought that was boring you obviously havn't read my Journal ;-)

  7. You're not the only one by winchester · · Score: 2, Interesting

    One of the major pro-oss arguments made within large military organisations is exactly this point. OSS may or may not be more secure, but at least with OSS everyone is at a level playing field with regards to the ability to audit source code.

  8. Lies, errors, half-truths and suppositions by iPaul · · Score: 4, Interesting

    1) That liberal IP policies and free software will shrink the value of existing IP property. False - it will probably raise the total amount of IP capital over the long run. More producers of IP will have access to more tools and be able to provide more solutions on more platforms.

    2) Outsourcing is bad - okay outsourcing is bad.

    3) Outsourcing ruins US IP. The value a company places on a process, technology etc, is purely subjective. There's an accounting value - which is a function of the acquisition cost and r&d costs, but if they value an asset they will protect it. Companies that take core business processes overseas where IP property theft is rampant are either stupid, or these processes don't have a lot of value.

    4) GPL only allows you to develop GPL software - Where do I begin - he said shaking his head in dismay. You can write (and people do write) closed source software based on an cooperating with Open Source software. In some cases you must release certain parts of code, in other cases you can keep it all locked up. Either way, Oracle, IBM, BEA, Sun, etc. all have proprietary software that runs on GPL based platforms.

    5) The author assumes that the accounting value of IP = the real value of IP. In some cases you have large "IP assets" that are worthless. Think OS2 software. However, you have to depreciate them on your books because of accounting rules. Also, it doesn't follow that enforcing all your IP claims will make the economy better off. If everyone started suing everyone else over IP, then no one could produce software and what little there was would skyrocket in cost. Remember IBM owns a little here, Oracle some ther, Intel has some, etc. but no one owns even enough to make a complete O/S.

    That what's in GPL'ed software is necessarily valuable IP. In some cases these are concepts that have been written about in O/S textbooks for 30 years! Many are based on industry standard APIs or widely adopted practice. Read - Unix like kernels and related software are good, stable technologies but not exactly hot off the press.

    Summary - The Tocquaville author is an idiot

    --
    Leave the gun, take the cannoli -- Clemenza, The Godfather
  9. Re:Cough-Cough-Bullshit! by Anonymous Coward · · Score: 3, Interesting

    0) MS said they couldn't reveal source code in court because it would be a national security risk.

    1) MS has allows China (and other countries) to see the MSWindows source code.

    2) closed source is better for national security.

    3) 1+1=10?

    4) ?????

    5) Profit!

  10. Re:Market value vs. productivity by Rich0 · · Score: 2, Interesting

    Also - most programmers could care less if their employers lost 85% of their value - they only care about having jobs...

    Given a choice of an environment where lots of programmers are employed but their employers can only make modest earnings off their work, and an environment where big companies make a fortune but fire all their programmers anyway, they'd probably rather go for the former.

    Also - open source basically forces companies to continue to innovate - since anybody else can pick up one vendors work and resell it. If a company keeps coming out with version after version of software with great support and lots of useful features, I'll probably pay more and get the software direct from them. Other resellers will probably be a few steps behind them at any given time. On the other hand, if I don't need cutting edge, or if the vendor turned out one great product 5 years ago and is trying to milk it, then I can go to a reseller who will give me the software itself virtually for free and provide their own support for a lower cost.

    If you are at the leading edge of innovation, then it won't matter that others can redistribute your work - by the time they do so and develop good support structures you'll be a step ahead. And if you listen to your customers then customers will buy directly from you to have more input in the development process.

    On the other hand, if you made an OS which was good for its time 10 years ago and achieved 99% market share and now you just want to sit back and collect, a move to an open source world where others are free to fork your project is obviously a scary thought!

  11. He misses the point of OSS by mrhandstand · · Score: 2, Interesting

    I got started with Linux and OSS for two reasons.

    1) I'm a cheap bastard (I was anyway...I was a college student with little extra $$$).

    2) I hate piracy (My family owned a software business.)

    I appreciated the usage of the software, sent thank you letters or meager donations when I could, and never claimed the work as my own. If Ken Brown is de-crying the theft of IP, then my example helps to refute his argument. I did not have any incentive to steal. This prick wouldn't understand generosity or community if it slapped him in the face.

    --
    Always value the individual over the system. --Bruce Lee "I don't need a Sig - I have a custom 191" - me
  12. Obligatory Netcraft check: by sammy+baby · · Score: 5, Interesting

    According to Netcraft, www.adti.net is running FreeBSD.

    Why, oh why, does the Alex de Tocqueville institution hate freedom so?

  13. Re:The american way and open source. by gowen · · Score: 5, Interesting

    Well, its an interesting thought. My own opinion is that Open Source Software is merely a natural reaction to the fact that software is, essentially, outside most economic principles, which are firmly grounded in scarcity.

    Well, excluding Duke Nukem Forever, what little scarcity there is in software is artificially created ("We'll make this stuff expensive, because our coders have got to eat"). If suitably licensed, I can share it around at almost no cost to myself.

    Capitalism says "get hold of something scarce and barter it for other scarce things." Communism says "gather together all the scarce things and try and share them out equally." Diametrically opposed, but both relying on scarcity.

    Linux is immune, because there isn't a limited amount of it to go round.

    --
    Athletic Scholarships to universities make as much sense as academic scholarships to sports teams.
  14. Here are some counter-arguments and fixed mistakes by mmurphy000 · · Score: 2, Interesting
    All quotes are from "Outsourcing and the global IP 'devaluation'", the lead de Tocqueville article linked to in the original posting.
    If 85% of the assets of the Standard Poor 500 shrinks by even 1% percentage point, it devalues U.S. corporations by billions of dollars.
    It's unclear exactly how he anticipates IP assets shrinking, per se. The original analysis he cites compares market value to hard assets, to come up with tangible vs. intangible ratios. That's where the 85% intangible comes from. However, that's based on market value, not IP value. If a firm's market value drops by 10%, that's not saying that X% of its IP value is lost somehow -- leastways, I kinda doubt that individual or institutional investors have their HP 12c calculators out and are computing their take on the firm's IP value and are proactively using that in their investment decisions that drive market price.

    In other words, Mr. Brown's argument here would seem to be smoke, and possibly mirrors.

    Third, and even more serious, these initiatives are continually pushing U.S. intellectual property asset values downward.
    Mr. Brown offers no proof of this assertion. More smoke.
    Open Source activists that want to see Linux succeed argue that eventually, they want all intellectual property protection to end, including patents and trademarks.
    Mr. Brown offer no proof of this assertion. If he limited his statement to stopping protection of software patents, he might have a leg to stand on, as it would appear the open source community tends to be anti-software-patent.
    The bottom line is this: a non-IP future means that all companies in the Baruch Lev study go to from 85% to 0% in intangible asset value.
    See my original point -- intangible asset value is not IP value. At most, if somehow commercially-distributed software were eliminated and patents revoked, intangible asset value will decline a modest amount, because there's other intangible assets. Even in the area of software, FOSS has no problem with firms keeping private IP private, and so that IP has value. For example, even if FOSS ruled the roost, Google's IP value in their search technology, massive server farm management technology, etc. still exists.
  15. Re:For god's sake by Cognitive+Dissident · · Score: 2, Interesting

    No, this is not 'nonsense' and we must not think of it that way. It is propaganda of the most blatant sort. Having produced several 'studies' that try to make corporate officers and staff fear Open Source, they have now moved on to inoculating ordinary IT workers against the idea. Have most 'rank & file' IT workers thought much about Open Source even if they have heard of it? Probably not as they are too busy trying to keep up with their workload. But they might well read some of the website and magazines that this article will be featured on.

    This is advertising a point of view, just like commerical or political ads. And it will work if it is not countered, just as it has worked for countless candidates and businesses already. It doesn't matter if the reasoning is flawed any more than it matters for other forms of advertising. It's not aimed at people who are calmly analyzing what they read. It's aimed at harried IT workers who are skimming the IT journal of their choice for any 'trends' they need to be aware of to keep up with their job. They'll swallow it whole just like most people swallow political 'soundbite' ads whole. People tend to believe what they hear repeated over and over. Dismissing it as 'nonsense' is as stupid and dangerous as Dukakis dismissing the Willie Horton smear campaign as nonsense.

    How much 'public relations' work do Open Source businesses do? Maybe it's about time for the FSF and other bodies to actually purchase advertising and increase their other explicit efforts to promote understanding of the Open Source movement. If they let Microsoft sponsored propaganda defined them, they are headed for the same sort of high-minded defeat that Dukakis suffered.

  16. Perfect competition != capitalism by karzan · · Score: 2, Interesting
    the customer looking for, and receiving, the best value

    That's a feature of perfect competition (a theoretical state which is in actuality impossible and never exists, as it rests on 0 bars to entry of an industry, perfect information, and various other impossible conditions), not of capitalism (a real economic system more often characterised by oligopoly or monopoly conditions, imperfect information, and intentional 'distortions' of markets by firms).

  17. Not OpenSource, CEO Fraud. . . by jafac · · Score: 2, Interesting

    What destroyed 85% of the Market Value of "software" companies (dot bombs)?

    CEO fraud. Not Open software.

    Supply constraint doesn't work on free software. Find something else to sell. Like talent.

    --

    These are my friends, See how they glisten. See this one shine, how he smiles in the light.
  18. Increase in ANTI-FLOSS propoganda.... by borgheron · · Score: 2, Interesting

    Has anyone else noticed an increase in ANTI-FLOSS propoganda since it became clear that the SCO debacle isn't the answer to the status quo's problems?

    GJC

    --
    Gregory Casamento
    ## Chief Maintainer for GNUstep
  19. Foreign developers by eric76 · · Score: 2, Interesting

    The article fails to note that a large number of the developers of Free and Open Source Software are foreign.

    In fact, remember that Linux was began in Finnland, not the U.S.

    Does this mean that we are importing free IP?

    In reality, I agree that it will reduce the IP value of some companies. It won't eliminate it, but it will reduce it.

    Is that such a bad thing?

    It seems to me that if we eliminated software patents, the hardest hit would be those leach companies who patent some nebulous idea and then wait for real companies to develop something similar so they can hit them with enormous lawsuits. Would it be so bad if these firms all went under?

    There would still be plenty of IP around. Those maintaining most or all of their IP would be those who use that IP for legitimate, constructive purposes instead of leaching off the work of others.

  20. Re:Cough-Cough-Bullshit! by Global-Lightning · · Score: 4, Interesting
    Yep,
    Anytime someone trots out these "Open Source is bad for the goverment" pieces,
    I like to hit back with the MITRE report titled Use of Free and Open-Source Software (FOSS) in the U.S. Department of Defense

    Choice quote (emphasis added):
    "The main conclusion of the analysis was that FOSS software plays a more critical role in the DoD than has generally been recognized. FOSS applications are most important in four broad areas: Infrastructure Support, Software Development, Security, and Research. One unexpected result was the degree to which Security depends on FOSS. Banning FOSS would remove certain types of infrastructure components (e.g., OpenBSD) that currently help support network security. It would also limit DoD access to--and overall expertise in--the use of powerful FOSS analysis and detection applications that hostile groups could use to help stage cyberattacks. Finally, it would remove the demonstrated ability of FOSS applications to be updated rapidly in response to new types of cyberattack . Taken together, these factors imply that banning FOSS would have immediate, broad, and strongly negative impacts on the ability of many sensitive and security-focused DoD groups to defend against cyberattacks."

    Overall, MITRE carries much more credibility in the government than some apparently politically and economically motivated "thinktank"