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Getting the "Free" Business Model Wrong Doesn't Mean the Model is Flawed

While "free" seems to be an increasingly popular business model, there are quite a few people who seem to be completely bungling what to do with "free" and then complaining when it doesn't work. Techdirt takes a look at some of the arguments surrounding why free as a business model may or may not work and why many of these arguments, while prevalent, just don't hold water. "you give away the infinite goods, not the scarce goods. Your time is a scarce good. No one is saying that everything needs to be free -- they're saying that infinite goods will be free, because of it's very nature in economics. In fact, Poole's argument is particularly weak when it comes to programmers, because most programmers don't earn any kind of royalties for the software they write. They are paid a salary, for their time -- but not for the software itself (which is an infinite good). And, I won't even get into the number of programmers who work on open source projects for free ... or the fact that Poole is blogging for free ..."

10 of 218 comments (clear)

  1. Re:I laugh by jeiler · · Score: 5, Informative

    I wish I could be so lucky. My boss won't let FOSS anywhere near the system with the exception of one lonely PC set up as a webserver. He knows commercial software has its problems--his biggest problem with FOSS is "lack of support." I've tried showing him that there is support available, but when he wants support, he wants to be able to pick up a phone and get an answer the same business day.

    Of course, this is the same boss who says "I'm not using anything I need to compile myself." Go figure!

    --

    If you haven't been down-modded lately, you aren't trying.

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  2. Re:I laugh by basiles · · Score: 5, Informative

    I wish I could be so lucky. My boss won't let FOSS anywhere near the system with the exception of one lonely PC set up as a webserver. He knows commercial software has its problems--his biggest problem with FOSS is "lack of support." I've tried showing him that there is support available, but when he wants support, he wants to be able to pick up a phone and get an answer the same business day.

    He can buy that kind of support. Of course, it is probably expensive!
  3. Let's answer Poole's question... by argent · · Score: 3, Informative

    But if there's been a comparable success by a band that hasn't already gained its cultural capital and name-recognition through the evils of copyright and corporate promotion, I'd like to know about it.

    Jonathan Coulton?

  4. Re:How ignorant. by Seska · · Score: 3, Informative

    I don't see how this is relevant. Techdirt's article was all about how real business models need to reflect both the near-zero marginal cost of additional copies of media and (therefore) the need to make money on scarce commodities.

    For example, programmers generally charge for scarce commodities (time or solutions), and don't attempt to trade for the free stuff (additional (marginal) copies of their completed software).

    They then point out how the blogger blew it (trying to get paid for near-zero marginal cost items) and how Radiohead didn't. Similarly, Google gives away searches (near-zero marginal cost) and sells the scarce stuff (ad space on often-viewed and topically related web pages).

  5. Thank you for bringing this. by Zombie+Ryushu · · Score: 3, Informative

    Keep in mind that I am a supporter of the Free software movement and its ideals. I just think that in some ways, the F/OSS model and software in general could use a modified lesson from Edward Demming (too bad he is worm food.)

    I speak strictly to the Linux economy when I say this, and this is one reason why Linux isn't as popular an OS with commercial development as it is.

    First:

    Do not write your applications with a blatant double standard. Examnple:

    Windows version: Nice GUI interface.
    Linux Version of same App: CLI if lucky with text file configuration.

    That is really really really disrepectful. I'm looking at you: synergy

    Second. There are established methods of installing appication software. e.g. RPMs, Debs. I hate to say it. Disregaurd the other package formats. make an RPM or a DEB and you have 95% of the Linux market covered. RPM and DEB are availible on EVERY distro.

    Don't leave your software full of memory leaks, integer overflows, and other things that can make a system crash.

    If you are a closed source vendor, provide an x86_64 and x86_32 package.

    If you are an Open Source Vendor: Do NOT package your source as a RAR. Package using BZ2.

    Do NOT package your own hacked versions of SDL, OpenAL, or OpenGL. This is likely to break things. (I'm looking at you d2x-xl.)

    Have a good support model. Don't be fly-by-night. Don't be a scam artist, don't be a con artist. Don't do a half ass job on your Linux port. Simply stated don't be a total imbecile.

  6. Re:I laugh by Anonymous Coward · · Score: 2, Informative

    Microsoft's paid support is pretty good in terms of price/performance, as long as you can prove to their satisfaction that anything you call them about is caused by a previously undocumented bug in their software. One of my coworkers (working on Exchange integration) has had 12 of 13 $250 support ticket charges refunded on that account.

    That said, I wholeheartedly agree that putting an OSS project's maintainer on retainer is generally speaking far more effective; getting a phone number to call to talk to one of the people who actually writes the code is a far sight better than any commercially offered support I've been beneficiary of thus far... and having the source code and access to the dev mailing list (and thus the ability to DIY on simple things) is likewise helpful. That said -- if you can prove to their satisfaction that your problems are all their fault, MS's commercial support isn't as bad as you suggest.

  7. Re:A good example? by Anonymous Coward · · Score: 4, Informative

    Mozilla, MySQL, (insert linux distro here), and plenty of others offer services and software for free. They also offer "premium" services, but nonetheless, there's a big 'free' portion of their business model. Google is another example of offer many services for free. Nine Inch Nails just made a load of money off an album that was written under the creative commons license, so its absolutely free to distribute if you own it.

  8. Re:I laugh by westlake · · Score: 2, Informative
    Ask him when the last time was he picked up the phone and called MS and asked them for support?

    This always sounds like a great comeback...

    But if your boss is comfortable with where he is now it is probably because he is getting the support he needs and at a price he thinks is reasonable.

    He is not seeing the kind of problems that would make rebuilding his business around a Red Hat solution worthwhile.

  9. Re:I laugh by ozmanjusri · · Score: 2, Informative
    My single experience with MS support was that they spent most of the time verifying that the failure/bug in Office Developer Edition 2002 was not a result of hardware or misconfiguration.

    They then advised me to reinstall ODE, and when that failed, to reformat and reinstall Windows and all of my applications. I was on a remote site, having flown there on a light plane with weight limits, so I had none of the install CDs.

    That was when I made the decision to move my business and customers away from Microsoft.

    --
    "I've got more toys than Teruhisa Kitahara."
  10. Re:I laugh by totally+bogus+dude · · Score: 2, Informative

    No, his point was that your license agreement for any piece of commercial software largely precludes you from suing for anything. Microsoft have a somewhat nicer one which limits any liability to $5 or something like that, which is absolutely useless for your company but could be nasty for them if there's a class action.

    It might be an idea to go through the EULAs for the main packages you use and show your boss the sections where they disclaim any liability. Many of them specifically forbid you from suing them for defects, too.