Harvard Concludes Linux Will Remain Second Best

watzinaneihm writes "A Harvard Study which uses formal economic modelling to determine "Will OSS ever displace traditional software from its market leadership position?" came to a (not so?) surprising result. Linux is likely to remain second best as long as Microsoft has a first mover advantage."

Comments

OSX

[Transcendent]

Now that Macs are developing/supporting a BSD based OS, I think Linux will also lose some desktop share here as well.

In fact, I know of a few friends who chose to get a MacBook and keep OSX on it because they described it as "Linux with more hardware support" (or at least better support directly for the Mac). Not saying this is true, but that it is another well supported Unix alternative.

Second Best Where?

[nbannerman]

Surprisingly enough, I'm finding the exact opposite to be true.

I've talked at length about how I deploy an entirely Microsoft-enabled enviroment for my college. 600+ machines, all running XP and Office 2003. 24 servers, all 2000/2003. A pretty typical Microsoft-enabled environment really.

However, I've personally just gone down the Linux route for my work laptop, and I'm giving projects like Edubuntu serious consideration for older, non-Vista compliant hardware.

I have no doubt that companies with ££££s to throw around will buy new machines that are pre-loaded with Vista, and they'll inevitably begin the Vista rollout come SP1. But big business is not everything; I know many of my fellow network managers in education are giving serious consideration to OSS solutions.

We're educating the business people of tomorrow, and if they are introduced to OSS at a younger age, I think we'll see some interesting changes somewhere down the line.

Well, I hope so... ;)

problem right now is that linux is unknown.

[Albert Sandberg]

When we (and by we, I mean the linux community) hit a larger portion of user base, say 10% of desktop market (if that will ever happen) linux is going to be well known, and I don't mean that just by the name, but people will actually from time to time use a computer that has linux installed.

Then and not until then will my mother think "why do I need this windows for anyway?" and might try linux out on the home computer. Then the kids start getting used to it (from home, school and most important, friends) and the adoption to linux REALLY hits, because no household will pay $$$ for an operating system if they know one that's usable for free. Not to mention the applications.

Alongside, user friendly distros such as ubuntu, mandriva and feodora will grow even easier to use (as a matter of fact, I think ubuntu is easier (and faster) to install than windows XP or 2000).

Of course...

[ackthpt]

Intel always thought they'd be #1, eh?

I think Vista is where Microsoft will fork strongly. There are several smaller forks out there, people who refused to leave NT or 2000 or 98 SE, their PC's do what they want and they see no reason to buy new hardware everytime Intel or Microsoft say "Yow! New! Must have!"

No mention of vendor lock and switching costs

[140Mandak262Jamuna]

Looks like these two researchers are still using lessons learnt in the marketplace for actual physical objects and applying it to non-physical, intellectual products. The entire article introduces a term demand-side learning . But does not mention the words "vendor lock" or "switching costs".

If you are selling garden hoses, the cost of switching to a competing brand is just the replacement cost of a garden hose. If a company is switching software from one vendor to another, the switching cost is considerably more than just plain cost of new software. Like changing the garden hose requiring you change all the plumbing fitting and pressure valves in your home! The first mover advantage is directly proportional to the switching cost. Where are Lycos and Hotbot now? All vendors know that and they strive hard to increase the switching costs, from AutoCAD, Ansys, Fluent, Cadence, to Oracle, MSFT every dominant vendor in the market tries as hard as possible to make it inpossible to switch.

The reason why garden hoses, light bulbs and tires have low switching cost is because of standardization. Standards defined by independant third parties, not by the manufacturers themselves. People, consumers and corporations are beginning to understand the issue, as seen the recent moves by Massassuchetts to mandate ODF as the archival format for its documents. It is inevitable that people will see the advantages of interoperability and standardization. The first mover advantage will diminish as consumers level the playing field by demanding interoperability and standardization. At that time the "second mover" into these fields will be OSS with value added services.

Stealing Windows

[twfry]

Interesting paragraph from TFA

In addition to this main result, we were also surprised to find that piracy may end up increasing Microsoft's profits. To understand why, notice that there are two types of pirates: those who would not have bought Windows in the first place because it is too expensive, and those who would have bought Windows but now decide to pirate it. The first category increases Windows' installed base without affecting sales. As a consequence, this group increases the value of Windows. And thanks to these pirates, Microsoft is able to set higher prices in the future (because the value of the system goes up). In addition, having these pirates means that Linux's installed base does not grow as much as it would have if piracy weren't there. The second type of pirates (those who in the absence of piracy would have bought Windows) reduces Windows' sales and profit. Thus, if the proportion of first-type pirates is sufficiently large, Microsoft's profits will increase with piracy.

Conclusions Flawed but Very Interesting.

[twitter]

The summary is not as much fun as the article, which declares Microsoft's future dependent on FUD, sabotage, intentional waste and dumping rather than code quality. The whole summary reasoning boils down to, "It will be like this tomorrow because it's like this today." Even M$ knows that's not true. What M$ and IBM did to DEC used to keep Bill Gates up at night, and still might despite all of his ill gotten wealth. The authors have much more interesting things to say and do not really conclude M$ will always be around. The authors, while they do overplay the importance of an undefined "network effect" don't make such a gross error.

The authors don't really understand free software development but they do understand what M$ must do to stay alive. They understand the M$ network effect, which is difficulty working with people who don't have the latest and greatest M$ crap, but completely miss the free software networking effect and much of free software's social benefit. The more free software does, the more it will be used and the more it will grow. It's a power function, not dependent on large organizations and we are still at the very start of the curve.

One of the key flaws I found in the author's reasoning was this:

However, with a monopoly, the efforts to develop new software and improve the platform are directed towards one system only and this may turn out to be better from a social welfare perspective.

That's seriously flawed for two reasons. First there is no such thing as a "Linux Monopoly". It's only freely publish standards that make it look like a coherent whole and it's only M$ intentional ignorance of those standards that keeps both systems from interacting freely. The second, they seriously underestimate the size of the free software community and it's growth potential. The free developer community is and will allways be larger than the non free community. The whole point of the non free monopoly is to charge people money to participate. Free participation will never cost more than time and effort. GCC comes with most GNU/Linux distributions and there is a fantastic library of source code for every purpose no further than a network request away. The cost of a full version of M$ Visual Studio is close to $800, after you have paid the OS tax, and you need to buy a new one for each programmer every year or so. How economists could miss such a basic part of their model as cost of raw materials is beyond me, but part of it is a flawed assumption that free software is dependent on government and business support:

This questions the social desirability of policies aimed at guaranteeing Linux's survival. ... This [corporate] support is important because there are tedious portions of the code that would rarely be developed spontaneously by members of the Linux-developer community.

Wile corporate and government participation are welcome, studies don't bear out the necessity of their involvement. Companies and governments are going to increasingly use free software because of the tremendous flexibility and cost savings. There are hosts of things you just can't do with non free softare and most programmers spend all of their time making things work. Most programmers would be just as happy or happier with free software as long as it does the job.

Recognition of all the evil things M$ must do, while common here, are welcome from economists and business types. Formal recognition of the SCO and other FUD attacks, dumping by "piracy", the Halloween Documents, even sabotage of free software by "encouraging forks" are nice to see in print from a "respectable" organization. Remarkably, nowhere is there a statement that M$ has or must improve the quality of their code. Their conclusion is telling:

We conjecture that there are multiple equilibria and that the use of FUD to mold perceptions about future value becomes crucial.

Essentially, M$'s future is depends on lies. That's not a very bright future. Admission to that fact is all it takes for them and all of their intentional waste to dissapear.