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Free Can Mean Big Money - The Open Source Economy
Gentu writes "People are always accusing Open Source proponents of being communists, but an editorial by the OSNews publisher, ex-Red Hat employee David Adams, takes a critical look at whether Free and Open Source Software is really anti-capitalistic or is, in fact, only a product of the free market at work. Does wide availability of high quality, low cost software harm or help the world's economy?"
That whole thing assumes communism is in any way bad... It's biased to begin with.
This of course assumes that OSS = high quality. That is definitely NOT always the case. OSS is just software, and can be good or bad quality. That being said, talk amongst yourselves...
My beliefs do not require that you agree with them.
There's a BusinessWeek article today advising the Linux community and those in product development to drop GPL and release under BSDesque licenses in order to stay more business-friendly.
...that you can still sell services based around that free software.
dmiessler.com -- grep understanding knowledge
Linux is not Just One Big Thing.
Just because you go into a linux service business does not mean you have to support ALL linux systems and run into spirals of madness therein.
Make your own. Make it specifically yours. Make it free to the world if you like, but also make it so you only do paid support for the system from people who have your exact defined distro.
You're in a service business, not a software business then. It doesn't matter if people copy your software, or improve on it, or spread it worldwide. You still provide services to your customers. They still pay you to maintain.
That';s the bit most of the big boys don't get. "The software is free! Free for anyone else to use! Free for all! Free and they can copy it!". True. But you the service company knows that your services are not free. Your time is not free, and you spend your time keeping your customers running smoothly and you earn from that.
What's better about a Linux service economy than a Win one - a service business based on proprietary software may come up against roadblocks. limitations in the software that their proprietary vendor does not address. Limitations that may make your clients go elsewhere, "switch" as it were.
With linux, you can implement that change. You can make the product you give away perform as they need, and keep supplying service from then on.
Linux - It's a service economy now guys. The only money to be made is in serving free software and in being the service provider known to be the best for a situation. Implement functions your clients need first, get paid first. TRUE market driven innovation.
(thank you this marketing rant was brought to you by 3 straight days awake and sixty coffees)
It's as simple as this, if people save money by going with OSS then they have more money to spend elsewhere. One industry shrinks, another grows.
I install Linux, Microsoft loses. Because I installed Linux I now have more money in my pocket, Brewing industry gains.
As long as such changes are gradual, the impact on the economy is nil.
For all intensive porpoises your a bunch of rediculous loosers
The notion of "From Each According To His Abilities, To Each According To His Needs" which is the core of Karl Marx's philosophy is also the core of Open Source ideals. Those of us who can code give away our code so that everyone who needs software can benefit.
The fact that the Cold War happened and 'communism' became a dirty word in the U.S. and other western nations doesn't make Open Source any less about ensuring that everyone can enjoy the fruits of the labor of the most talented without the necessity of enriching the producers of the software or discrimination against those that would not be able to afford software if it was proprietary and commercial.
There are several companies that have embraced FOSS and are making good money. Not by charging money for the software, but by providing services. We always think of Red Hat and the like, but now think of IBM and they way they have embraced the FOSS world yet still make mega bucks providing their services. Linux, for instance, is not the basis of IBM's offerings, but merely one solution they provide. They don't charge for that software, but they do very well capitalistically speaking. There is no conflict between capitalism and FOSS, it merely shuffles the equation around a little. Instead of charging for the software, you charge for your knowledge in other areas. Then you 3. Profit!
Closed-source software houses that screech about their lost profits and how important it is to America to maintain their stranglehold on this part of the economy sounds just like the RIAA. "Save our artificial business model!" Well, it's articifical, and as a business model its time is drawing to an end, or at least being marginalized. Time to make the choice, do you want to be like the buggy-whip manufacturers and the RIAA? Or do you want to be like IBM and make profits from embracing FOSS.
My own perspective is that Open Source can play a major role in reducing major concentration of power (both financial and political). I tend to see both communists and capitalists(even anarcho libertarians) as largely favoring concentration of power-despite much rhetoric to the contrary. Overall, I tend to see decentralization of power as a very good thing.
However, there are some issues that concern me:
will decentralization have negative side effects like getting advanced weapons technology into the hands of folks that seriously misuse that technology?
Lets take for instance if all the telecommunications companies in the US were forced to give up their lines and hand the upgrading and maint of them to a centeral company. This company would be regulated by the government for prices and what upgrades need to be done through contributions by the "Telecommunications Services Companies" and taxpayers.
It would be my belief that you would see wide adoption of Fiber to the Premises in a much quicker manner than currently being shown by SBC and Verizon. Futhermore those companies that have this huge debt cloud that the fiber would never make money can then focus on providing services over those lines. Also they would not be restricted to the areas they are currently in so in essence I could be a Verizon Customer until I get a better deal then switch over to Comcast who would provide services via my fiber connection.
In essence the national telecommunications network would be considered the Linux of our telecommunications backbone. Verizon, SBC, Cable Companies etc would be considered in the same light as Redhat, Novell, Mandrake and others. It's a common platform and the services are being provided.
The only problem with this is that Linux has yet to be standardized in a acceptable manner. Mandrake looks different from Redhat who looks different from Novell. Fix that, standardize what's being done to the kernel and fight for customers with support and product contracts and we can kiss MS goodbye.
Linux service providers (LSP)'s should be going to Corporations and telling them we'll provide you this service that will eliminate this problem or situation. You have to adopt Linux on that platform but for a fee we will make it do what you want and provide training and support for the life of it.
Other companies should be investing in end to end solutions built on Linux that are standards based and drum up companies to adopt this. We see it in many places today but adoption is slow but picking up very quickly.
Other companies who are standing on the sidelines wondering about this SCO business need to realize all the money they are throwing away and finally need to give the finger to SCO and get on with the conversion. Service disruptions to a Microsoft based virus over the last 2 years have far outshined any royalty payment you would ever have to pay SCO if hell froze over and they won their court cases. Go out and find those balls you had when you made these companies so great and use them again for once.
I make all my money with free software these days.
I design a database...What do I use? Hmm Oracle? Can't afford it. MS SQL? Can't afford it. Guess it's MySQL or PostgreSQL, with the added benefit that I can charge a couple grand over the liscensing fees for either of those and make nice profit.
Deploy a firewall file server for some business? Win2003? Yea right. Solaris? Too expensive. Linux? I can charge ten grand and beat all my competitors.
Webserver? Apache. Office? Open Office.
MS Zealots can talk TCO all they want, but these people pay me a few hundred dollars a month to keep an eye on their stuff, and it never really breaks. I can admin three dozen boxes by myself, and I'm laughing all the way to the bank.
ad logicam Claiming a proposition is false because it was presented as the conclusion of a fallacious argument.
Well, IBM can "make" money from Linux while contributing back to Linux at the same time. IBM needs to meet it's customer's needs, and if Linux doesn't satisfy those customer's needs, then IBM can modify Linux to suit those customer's needs. However, the customer isn't paying for Linux, they are paying for the custom services/software on top of it.
Linux allows IBM to quickly build a solution for that customer without having to "re-invent the wheel" or pay software license fees. Thus IBM can get the job done for less, they can pass some of those savings on to the cutomer, and the Linux community can benefit from their additions. So, in essence they made money....
I've never understood how people took the rant about free software being communist seriously.
:p)
Are lawyers doing pro bono work destroying the market for lawyers? Are doctors who work in a clinic as volunteers destroying the demand for medical services? Are all the people out there who write articles or novels and give them away for free "destroying" the market for books? Of course not.
It's foolish to assume that the best OSS software authors act entirely selflessly. If you could make $50/hr at a corporate software shop, or make a name for yourself on 10-15 hrs/week in coding for free and then command $150-200/hr for the other 25-30 hrs a week, what would you take? I'm making way more money than I ever did in a "real" job as a consultant, and I do it on my schedule and my terms. I got this by releasing a little OSS package... one that isn't even in use any more because I didn't have time to maintain it and it was fairly early-stage. But within weeks of putting it out, I was getting inquiries about modifying it on a per-hour bsais, and I've had a full schedule for over 16 months and more than 1 full time job offer that I've turned down.
Also, it sort of assumes that there's some competition between OSS and certain alternatives. If I had a choice between a free IIS and a $100 copy of Apache, I'd buy Apache. If I had a choice between a free winXP, and paying $89 for linux, I'd take linux. (And I'd dual boot to free windows so I could play games
I'm sure for a lot of people, "free" is a nice thing. But you know what? It's been pointed out before: license fees on software are often a tiny fraction of TCO. OSS is often superior not because of the software cost, but the associated costs.
As far as the "World Economy" goes, this question is in the "Give Me a Break" category. It's like asking whether free medicine would help or harm the world economy. The only difference is there isn't an army of altruistic and excellent drug manufacturers like there are software developers.
He missed a major point in section 7.
LINUX MAKES JOBS.
Its very simple, Microsoft's revenue is $36.8B it employs 55000 it has a high revenue per employee of $669k. It has a monopoly so that high revenue/employee is not suprising.
Other companies are not so lucky:
GE revenue is 140 Billion, it employs 305000, thats $459K per employee.
Citigroup $240K per employee
Walmart $183K per employee...
If companies spend less on Microsoft products and invest it in their own business with similar results to their existing business, then they will create more jobs.
So, if Walmart saves 10 million by not buying Microsoft licenses and switching to Linux
and invests it in its own company, it will likely create 55 jobs.
Microsoft will lose $10m (i.e. 15 jobs). A net gain of 40 jobs.
Walmart jobs are low grade, a more realistic example is Citigroup. 10 million saved on Windows licenses is worth 26 extra jobs.
My point is, it isn't just that companies spend the money on themselves, it's that they employ more people for each $ revenue than Microsoft, so every dollar saved creates more jobs than a $ going to Microsoft.
It should be painfully obvious by now that Microsoft's current MO (aside from funding the litigious bastards at SCO, and their current astroturf campaign about patents) is to lead everyone in the wrong direction about what "free" means (i.e. gratis instead of libre) and then tear down any claims made by that assumption.
Don't fall into Microsoft's trap. When talking about open source with colleagues, customers, etc. make sure they know about the true benefits. Lower TCO is part of the picture (and it does have a lower TCO when anyone not reciving Bill Buck$ is doing the measurement), but there's also the ability to interchange components at will, and the ability to interchange vendors at will, which gives everyone more leverage with their vendors. With open source, everyone wins except for software companies who have built their businesses around lock-in.
If nothing else, this whole thing should serve as a stellar example of why the phrase "open source" is an order of magnitude more versatile than the ambiguous "free software." There's no confusion as to what it really means.
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Ever hear of Social Security? Medicare? Welfare? Public education, non-toll highways, government funded research?
Yea sure, some people think these things are bad, but they're scary in the other direction.
Marx would have liked it, because it's a dialectic, eh? On one side, Capitalism--heartless and evil. On the other Communisim--mushy and incentive-free. Combine them? Excellent system.
It goes the same way with open source. We give it away, and we reap the rewards. Sure, its not the same kind of money you'd make if you were out to fuck everyone, but it's steady and solid, and the repeat business is kickin.
ad logicam Claiming a proposition is false because it was presented as the conclusion of a fallacious argument.
Actually, there is a difference between money capitalism and free market capitalism. Adam Smith was a free market capitalist. Money capitalism is actually pretty much the same as communism but administered in a different fashion.
Unfortunately, in the US, we are moving more and more towards money capitalism.
Engineering and the Ultimate
I'm a laissez-faire, free market, anarcho-capitalist libertarian. Nothing could be more pro-free market than protecting the right of people to GIVE away their creations for whatever motive they choose. It just so happens that there are economic incentives to do so in many cases.
Anti-free market would be if you decide the government has to step in to "promote competition" (i.e., stamp out activity that seems to weird for the politician's radar and/or threatens established business models). Anti-free market would be if you RESTRICT people's right to give away what is theirs. The fundamental of the free market is the right to do what you want with what is yours.
Anti-free market would also be, IMO, granting any kind of monopolistic or exclusive rights to people or entitites, for example, "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." A real free market solution would let the free market promote the progress of science and useful arts instead of doing it by government compulsion. And we are seeing that when there is a vibrant set of public works available through public domain and/or favorable licensing terms, science and useful arts advance dramatically as almost all discoveries and inventions build on prior art. Removing these restrictions would do so far better.
Secession is the right of all sentient beings.
First, I think that it is fundamentally wrong to assume that public works and benefits are somehow communist in the way that Communist governments exist today. This sort of thinking has been a way of attacking public sector projects in thinking that "I don't want my tax dollars paying for it."
Instead, it seems to me that we are talking about some sort of continuum between Capitalism and Socialism where the difference is that Socialism has a number of public works controls which help to redistribute wealth and keep in check the big business capitalism.
I use the term communism to refer to Soviet, Chinese, Eastern European, and Cuban communism. Whether or not they are the ideal is irrelevant. They are the examples of communist governments that we can reference. Communism in this perspective seems to be a socialist feudalism with state control and ownership of producers. This state control has limited utility and consequentially at some point one has to move to a person-based (corporations are artifical persons) ownership model.
Hence the move from Feudalism/Communism to Capitalism/Socialism seems to be a one-way road, provided that one only allows one ot consider a transition complete once it has really taken root. I.e. the family succession of elected offices in places like Singapore indicate that feudalist mentalities are still alive and well in the psyche of the citizenry.
The problem with open source from a capitalist perspective is that the means of production (in this case intellectual property) have become socialized, in the words of Marx. However, this is fundamentally different from Communism as I have defined it because socialized doesn't mean "owned by the state" but rather "owned by the producers and users." In other words this is a move towards community ownership which on the surface seems more like communism. To be fair to Marx he seemed to indicate that capitalist institutions such as corporations and the free market would likely continue to exist in his vision of communism.
I am willing to admit (as Wilhelm Reich quite strongly advocates) that Lenninism is NOT to be equated with the theories of Marx, and that Communist parties are simply wishful thinkers and daydreamers. In this theory cooperative businesses are the true manifestation of Marx's ideas of communism, but the term communism can't be used because of confusion with the communist party and the Soviet regime. He uses the term "Work Democracy" in his book "Mass Psychology of Fascism."
Of course what we have here is a strange way in which work democracy is implimented here where the "workers" including "corporations" own the means of production. This is something which could be equated with Marx's communism but bears no relation to the state-controlled Feudal political philosophy which has started in Russia during WWI. Indeed, when compared to the ideas of the "Communist Party," open source more closely resembles capitalism because it assumes no state ownership and the operation of a free market.
LedgerSMB: Open source Accounting/ERP
The success of Free Software in a capitalist market is illustrated by considering the iterated prisoner's dilemma. Self-interested, profit motivated corporations will cooperate for mutual benefit. The GPL maintains a Nash equilibrium by punishing defection (cheating).
Logic is not Divine.
Mormons were originally so communal it was damn near communist.
Two fundamental differences between the Mormon's United Order and communism are (1) Mormons who wanted to join the United Order voluntarily gave their means/property/output to the Order, whereas in communism, it is taken from him by force, as others on the list have pointed out, usually with an AK47 to his head. And (2) if a person was lazy, in the United Order they were put on probation and then kicked out if they didn't work. No so with communism.
Force vs choice. Work vs indolence.
Rather fundamental and critical differences, if you ask me.
For another practical example, study up on the first colonies settled in the New World. They started out as a communal society (crops, etc), and after the first winter, switched to a private-property-driven capitalist society. The Governer had some interesting words to describe the difference from the first year to the second!
Don't steal. The government hates competition.
"Linux brings us the ability to benefit Small-Medium Sized Businesses with powerful tools at no direct cost, direct meaning no purchase price -- the time involved in implementing it, however, is a factor dependant on the skill level of the IT Staff."
This is not meant as a troll.
The problem, being a small business owner, is with this "factor dependant on the skill level of IT staff." Most small businesses don't HAVE AN IT STAFF!
They depend on outside contractors. Ouside support folks for Linux earn more than their Windows trained counterparts. Try finding an accounting system that runs well under Linux, and then try to find a CPA that will work with it! Seeing technical people, who don't own small businesses that are not technology related recommending FOSS is all well and good, but it means more COST for me!
Basically, buying shrink wrapped Linux costs more than Windows. Hiring folks to work on it costs more than Windows. I can't get the apps that I need to run my business on Linux. They are out there for Windows.
Explain the value proposition for a small business owner from Linux. I would like to "stick it to the man" as well, and support Linux. However, I am in business to make money, and not run my computer systems.