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Why is OSS Commercial Software So Expensive?
An anonymous reader asks: "Our startup honestly wanted to use OSS products. We do not want to spend time for any OSS bug fixing so our main requirement was -official support for all OSS products-. We thought were prepared to pay the price for OSS products, but then we got a price sticker shock. Now behold: QT is $3300 per seat. We have dropped the development and rewrote everything to C# (MSVS 2005 is ~$700). Embedded Linux from a reputable RT vendor is $25,000 per 5 seats per year. We needed only 3 seats. We had to buy 5 nevertheless. The support was bad. We will go for VxWorks or WinCE in our next product. Red Hat Linux WS is $299. An OEM version of Windows XP Pro is ~$140. A Cygwin commercial license will cost tens of thousands of dollars and is only available for large shops. We need 5 seats. Windows Unix services are free. After all, we have decided that the survival of our business is more important for us then 'do-good' ideas. Except for that embedded Linux (slated for WinCE or VxWorks substitution), we are not OSS shop anymore." Why are commercial ports of OSS software so expensive, and what would need to happen before they could be competitive in the future?
Let's draw an extremely fine line here: commercial parts/versions of OSS products, and products built on OSS.
Commercial versions of OSS products aren't worth it, anywhere, almost ever. Just look at the prices above. In almost every case, go with the closed soruce version, and you'll save yourself a hell of a lot of money.
Now, look at two highly successful products built on open source: Fonality PBX (Asterisk) and Barracuda Spam firewall (Spamassassin). We use 'em both. I'm our entire IT department - just me. I already have too much on my plate, and when we were in the market for a new antispam solution, the natural pick was a Linux-Exim-Spamassassin/RBL frontend to our Exchange 2003 server. Powerful, effective, free (aside from hardware).
Problem: I'm already working tons of overtime - do we pay a contractor $120/hour to come in and try to set a system up, then rely on me to support it when I already don't have time? Or, do we pay a company like Barracuda Networks $1300 for their itty bitty model of the spam firewall and get a system that's guaranteed, backed up by all the time they've spent developing their hardware and frontends, 24/7 support, automatic updates, and license-free monitoring and filtering? I don't have the numbers with me, but the cost in staff + contractor time + hardware vs. the Barracuda system (which is overkill for our little network) was something like 3:1.
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But you say you want support, that's why you're paying. Hate to break it to you, but an OEM license of XP doesn't buy you any useful support. Neither does a $700 VS license. Microsoft, like everyone else, charges for support contracts.
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How much support do you get from Red Hat for your $299?
How much from Microsoft for your $140?
Which would mean that all software begins life as insanely expensive and then comes down in price? My experience sez that's not the case.
Quality and reliability
Yeah, I've never had to track down stupid issues in open source software. Never!
Support
Since the common wisdom seems to be that Microsoft charges a lot of money for nothing and it's super-easy to replace "propietary" software with FLOSS equivalents (MySQL vs. Oracle, GiMP vs. Photoshop, etc) I'd say that's about the only thing you could conceivably be charging for, other than packaging and/or integration. So I suppose the issue here is really "why are support contracts so expensive?" rather than "why is the software so expensive?".
Either way, my (relatively limited) experience with FLOSS vendors is that they tend to be a bit arrogant in the sense that they'll tell you that whatever you're using right now is "shit" and they have the solution to all of mankind's problems (including yours), and then they have absolutely no idea how to create things like tiered pricings and segment/volume discounts for different types of customers. That's something commercial software vendors do very well. The commercial ones will also tell you that they'll get you off the "shit", but then they can walk the walk. FLOSS vendors seem to be all talk.
In our case we ended up going without a support contract (insanely expensive) and hired a guy that was an expert with the software. He did all the customization work we needed for about a year and he made a good $50K with virtually guaranteed future contract work. The "vendor" (if one can call them that) ended up losing out to the hacker kid in mom's basement - literally.
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I mean, you want to sell a product that a community developed. Which means its quality could be variable. On top of that, you want to support it. The depends on excellent documentation which isn't enforced in the open source community. There's probably a lot of dead OSS projects for every one successful OSS project. You'll notice that the software itself is very very free ... what the summary is complaining about is 'seats' (training or support).
How is anything you just said unique to F/OSS? The quality of proprietary software is variable, and so is the support. The quality of documentation for proprietary software is likewise spotty. Proprietary software projects die on the vine all the time; at least F/OSS projects can be easily picked up again, if there is any interest.
As for the article's premise, that commercially supported F/OSS software is expensive - how is that any different than proprietary software? There's a reason that Paul Allen and Larry Ellison are in a boat building competition. I really with the Slashdot editors would spend a least an iota of energy attempting to filter out the trolls; but maybe they just enjoy the flamefests.
What I find surprising is that, in the few responses I've skimmed (including yours), I haven't seen anyone mention that these companies need to pay programmers. There's this tremendous myth that OSS is all written by good Samaritans in their spare time, and companies that sell it commercially simply rebrand it, box it, and ship it.
It's like people think that Linux is free, so why can't Redhat distribute it for almost nothing? Redhat and Novel employ programmers, too. In fact, the paid programmers make a tremendous contribution to all of this FOSS we benefit from. That's right, sometimes it's the big companies' work that makes the FOSS version so good, so the commercial companies aren't getting all that work for free.
I don't mean to insult anyone here, and I don't want to quibble about the ratio of good Samaritan contributions vs. paid contributions. Still, you can't discount that there are Redhat-employed programmers working on Redhat, and sometimes Redhat's work ends up in the free stuff.
So what I'm saying is, businesses selling commercial OSS have the same costs as a closed shop, even though they receive some free help. And for all the free help they get, these savings are offset by the fact that people don't have to buy their software. So let's say they cut their programming costs in 50% (just a number I'm plucking out of the air), their revenue is also cut by 75% (another made up number) by people who would buy it, but decided instead to download for free.
And this doesn't even take into account the whole dynamic of competition in commercial OSS. In short, for whatever Redhat spends in development, Novel also gets that work for free, and vice versa. Now maybe Novel doesn't want to use that work, and maybe Redhat is benefitting from Novel in just the same ways, but it sure does complicate the business model.
The $140 (for XP Pro) is the cost of the OS without other software. Red Hat comes with a compiler suite and a lot of other useful items, so the direct comparison of the costs of the packages is not really a valid measure.
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Not the kind of stuff this guy is talking about though. Personally I think the problem is he's comparing apples to oranges... I don't have numbers, and I'm not going to go get them, but let me point out a few of the obvious flaws in the summary IMO.
- RHE to WinXP OEM: Uh, no... Ubuntu to WinXP OEM, RHE to Win2k3 Server
- QT to MSVS2005: Why not go GTK+ vs. C# Express, both free
- Embedded Linux
... that's about volume, if you're embedding linux you should be saving a small fortune per appliance vs. putting WinCE on each of them, but yeah, the development aint cheap. - Cygwin commercial vs. Windows Unix tools, I think you're mis-understanding what each of those can do.
Right tool for the job, sometimes it's OSS, sometimes it's not... but the above post is like me complaining about the cost of steel vs. plastic because a caterpillar bulldozer is pricier than my nephew's sand bucket.To my experience with commercial OSS solutions, commercial OSS with a project taken from the community is practically illicit competition. A company can live up with 2 or 3 integrators and sell software made by 10-20 people, manpower-wise. Sure they still have to pay for those 2 or 3 programmers, but it is way less than hiring, sustaining and training a whole staff.
That's why I call it a scam. Starting up a project to be commercial OSS it's a nightmare: you get almost no support by the community till you have something working, especially if you aren't endorsed by one of the well-known OSS VIP who seems to be the only one that can say "I opened a new OSS project to improve my salary and climb the industry ladder" and get people working without salary for them. You are stuck with the same expenses and problems of closed source management, with the added value that a competitor can start integrate your solution once it works and make it better with 10-20% the money you invested in the project, assuming you are able to make it even with all the expenses to win the inertia of starting a business. Sure, given the time patches will start to come in (especially from early adopters, not necessarily by the extended community) but it too much risky to make it commercial open source from the start if you plan to start from scratch. Most of the successful OSS commercial solutions started up from hobby project or are simply integrations of other people work, they are not fair when they define themselves successful commercial enterprises, since they didn't deal with the startup costs and started with something of value by itself.
In addition, for enterprise grade software, OSS makes no difference over proprietary solutions. I now work on a small corporation based on 7 different nations and everywhere, while the platforms used vary from full OSS (my preference) to totally Closed Source, the customer gets always the sources on software developed with full control over it. The added value of OSS for them is on the infrastructure (no money spent on anything is not strictly the software), not on the project itself. Wonder why corporations are moving to SOA? That's the reason, no more clients getting the source code to turn on the less paying maintainer, since they are getting only the services.
Aside several enterprise projects, most of the OSS software reside in the realm of user-oriented utilities. Here, aside for being free, there's still too small interest on the source for the end users. I usually say to our managers that aside to fork a project to add a sterling point on your CV, nobody cares about sources on OSS software for personal use, since the selling points of these applications are cost (the less the better) and functionalities (the more the better). Sure OSS ensures these small projects will be alive even if original devs abandon it, but here more than anywhere its almost impossible to make money: if you want to get paid a bozo can start forking a free version again. If you get commercial someone can still relieve your software and make it better with less hassle, outselling you. There are a lot of commercial implementations of OSS software that are so much polished and user-captivating that outshadow community driven ones, most of them are on dog eat dog mode, continously cannibalizing other competitors in functionalities and sparky features (take a look at the jabber clients). So, if you are the one developing the software AND you are also in need to improve it to remain competitive, you are pretty much rising your internal costs and are more likely to be outsold by competitors that only integrates waiting on the road for code to come. Improvements have less impact than new features, but they are still costly. Planning new versions of your software while improving your current one to remain commercially competitive, if you aren't backed by a license that allows you to ask money from competition, pretty much kills you, otherwise your project will start to stagnate on itself (like many OSS do, to
Matteo Anelli
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