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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 ..."

6 of 218 comments (clear)

  1. Ecosystems come in many flavors by postbigbang · · Score: 5, Insightful

    There's the OS model as manifested by Ubuntu, RH, SUSE, and others. Each has different market motivators and success.

    There's the cool-app model, like MySQL, Apache, and others that depend on application support and transparency across a lot of software disciplines.

    There's the vertical app model, like Asterisk, that uses hardware/software/extensions to motivate the community, each making a few cents in within sub-markets.

    There's the 'fringe' app (not said in a deragotory way) that uses a shareware-like valuing through paypal, donationware, and other 'love of the art'/hacker's bent.

    And these are only a sampling of general categories. F/OSS in the Stallman model doesn't have to be a vow of poverty. On the contrary, we're only scratching the surface of how F/OSS makes money.

    --
    ---- Teach Peace. It's Cheaper Than War.
  2. Re:I laugh by CastrTroy · · Score: 5, Insightful

    Ask him when the last time was he picked up the phone and called MS and asked them for support? What kind of response did he get? How much did they charge? Then look at the kind of and cost of support available for products like Red Hat. Ask him how what MS provides is better.

    --

    Anthropic principle: We see the universe the way it is because if it were different we would not be here to see it.
  3. Re:IANAB and I did not RTFA, but.. by Score+Whore · · Score: 5, Insightful

    And what's the value of something that doesn't exist? Until someone comes along and creates the work you consider to be available in infinite quantity, it's only available on zero quantity. Given that that is the extreme end of scarcity no amount of money will allow you to buy it. Does that make the act of creation of infinite value?

    Maybe you shouldn't try and hang your economic philosophy on old ideas of supply and demand?

  4. Re:IANAB and I did not RTFA, but.. by morgan_greywolf · · Score: 5, Insightful

    "Anthing that is available in an infinite quantity should be free." No, what he's saying is that anything available in an infinite quantity will be free. That's just basic economics. The trick is to tie the free infinite good to a scarce good. If you get the business model right, the free infinite good will drive demand for the scarce good.
  5. Re:I laugh by Anonymous Coward · · Score: 5, Insightful

    Your boss does not want support. He just wants to cover his ass. If you have downtime because of a MS bug that takes months to fix, he can point the finger to MS and probably get away with it.
    If this happens with a FOSS product, upper management will start asking questions and eventually blame him for the choice of software. Your boss knows this.

  6. Re:I laugh by Rakishi · · Score: 5, Insightful

    Who do you sue when things go wrong? Cry because that's about all you can do, you've already agreed when buying the software that you do not hold the maker liable for anything.