Slashdot Mirror
Is Open Source Software a Race To Zero?
gozunda writes "My company is an open source software vendor/developer. We maintain a popular open source project and keep ourselves afloat by producing commercial products derived from or extending the value of the core project. Over time we've seen our business model eroding as other open source projects produce free versions of the same extensions and utilities that are our bread and butter. Something that was worth $5K last year is suddenly worth $0 because the free version is just as good as the paid. This same cycle is obviously having an impact on pure-play commercial software vendors. Is open source ultimately a race to zero? In ten years will there be any cost associated with commodity (non-custom) software? If not, will there still be a 'software industry' as it exists today, or will software simply be a by-product of the operation of other industries? Is that a good thing or a bad thing? As a professional developer, do I need to fear this or feed it?"
Yes, and there's nothing new with that.
Just because your software is open source doesn't mean that you get to sit on your duff and collect money off your paid extensions in perpituity. Just like any other software company, if you want to keep food on your metaphorical table, you've got to continue to innovate and improve. Otherwise, just like any other software company, your competitors (in this case, open source develoeprs) will eat your metaphorical lunch.
For what it's worth, though, nothing would be different if your software were closed source, except that your user base would probably be smaller and, depending on how necessary your software is, open source competitors would be even more eager to push you out.
You need to add more value to what you sell. The code itself is not valuable enough, so something like support or guaranteed compatible hardware/software (if applicable) needs to be thrown in the mix. If other people start selling those same perks, then what you are facing is basic business competition, which is inescapable.
Palm trees and 8
It seems that economics will set the price of a product at the intersection of supply and demand, and also drive the cost of an item towards its marginal cost (I'm not entirely familiar with the term, but it appears to be approximately the cost of manufacture). So it cost whatever it cost to develop the product, but now you can reproduce the developed, presumably, software at almost no cost (excepting the cost of the media or bandwidth). I'd suggest that if the free versions are as good as the paid-for version that you'd need to explore means of making the paid-for software more valuable. Either through more features or some form of support/assurance service.
My company makes sure that doesn't happen by continually inventing things. Sure, a lot of people are afraid of big corps and patent troll fake-outs, but we've decided we're not, and we're moving.
Personally I don't see there being a lot of value in paying for new versions of spreadsheets and word processors over and over again. There's not much, to me anyway, that's been added in the past 10 years. It keeps M$'s revenue stream high but is there value to me?
If software became more about producing new product instead of reworking the same old stuff in the language of the month I would be happy and I think there would be just as many jobs.
That's all strictly opinion, with no facts to support it.
-- Programming with boost is like building a house with lego. It's a cool but I wouldn't want to live in it
You are correct with the race to zero when you talk about developed code... The more time that goes by, the more it will erode existing code bases.
As far how to deal with it... Change your business strategy to help your users more. Meaning, instead of selling code, consider working on a support model where you offer support and monitoring services to your user base. Also, another good strategy is a hosted approach. Meaning, maybe you can offer connectivity to your users...
In the long-term there is little doubt in my mind that that proprietary software will be mostly obselete for a number of reasons. First is certainly cost, but security and quality are good other reasons. As a comany you can either change or die. The choice is yours..
Open source is on it's way to the stars and beyond. More and more people are realizing how great open source applications are programs are. Firefox and Ubuntu are two great examples. Open source is like a democracy by the people, for the people. Since it's created by us it inncorperates what we want/need on a daily basis which is why it's so successful. On a cooperate level it's not going to be successful for many small/medium buisnesses because in theory it's not supposed to be a money maker. Long live and (prosper?) open source!
The problem is OSS businesses are doing things the wrong way. Rather than do it Red Hat's and some business's way of adding in features in the community version they instead make the community version spartan and the paid one with support oozing with features, naturally this makes it a great target for some weekend coder to take that version and reverse-engineer or just get the source of the paid version and add it to the free version. Paid versions = Stable versions, community versions = unstable versions. Keep that in mind and your business will not have the community rebelling and forking your project every other month.
Taxation is legalized theft, no more, no less.
I run a small custom software startup (4 developers) and it seems obvious to me that open source done the way your company is doing it is a recipe for throwing money away. Your model is completely backward. Keep the core product closed and open up the extensions. Let the community improve your core product for free, don't give away your core product for free.
The software business, and particularly open source, is a race to do two things. Either 1. provide implementation and support services that creatively get cheaper over time to attract new customers, or 2. provide/sell creative new add-on features that serve expanded needs of customers. If your company is seeing revenue or margin erosion, it is because of a lack of organizational creativity, which is different from individuals being creative. Look for new management. That is their role in software.
Open source or commercial. WinZip's value to me is also effectively $0, since on Windows I have 7zip which does the job competently enough, and on Linux I have multiple tools to choose from.
It can get even worse, Vista's value for me for instance is negative -- I wouldn't use it even if given it for free, because I'm perfectly happy with Linux at home, and even installing it would be an inconvenience in exchange for no gain.
Even without free software such things happen: the value of a buggy whip is $0 for me, because I have no use for one.
The world provides no guarantee that you can forever be profitable at the thing you currently make money on.
Many years ago, people spent their lives painstakingly copying books. Today, we have printers that can do the same thing at a tiny, miniscule fraction of the cost.
More recently, people made money doing repetitive calculations, over and over again, and compiling the results into books. Now, obviously, computers can do it faster, cheaper, and more reliably.
Perhaps you're used to writing operating systems for a living. Well, operating systems are now valuable enough that people are willing to spend effort to make them free - CEOs realized, hey, I *could* spend $100,000 on licenses of an operating system. Or, I could spend the equivalent amount of money by taking an existing operating system and improving it for me . . . and for all future users . . . and then not have to spend $100,000 on next year's licenses, but instead just spend a relatively tiny amount of money maintaining our local patches.
And, hell, I could submit those to the central repository too. And now they'll maintain it for us.
Here's what it all comes down to. The core software in a computer is now too important to pay for. If you pay for it once, that implies you can be asked to pay for it again . . . and again, and again, and again . . . and if it's that important, you may simply have no choice. You don't want to contract out the necessities to someone who can withhold them on a whim - you want them available to you, for free, whenever you desire.
I don't know about you, but if I had to pay some dude $50 every time I wanted to flush my toilet, I'd be buying my own toilet with free flushes pretty damn fast. And, at the risk of stretching the analogy, I think people are tired of putting up with Microsoft's - or any other large company's - shit.
Breaking Into the Industry - A development log about starting a game studio.
I don't see the big game companies feeling threatened by open source (more by piracy), but their best products are innovative, exciting and fun. I've yet to see an open-source game that comes anywhere near competing with top games.
Scientific software is another kettle of fish. There is a lot of freely available stuff, but there's also the three M's, Matlab, Mathematica and Maple, all of which are very closed source. Universities and researchers use these all the time, but it worries me that at some point Maple might (for example) close up shop, making it more difficult to check results obtained using that program. Still, all of these programs enjoy good market share, and are specialised enough that I don't see them going away anytime soon.
xterm -n 8
Honestly,
the way to go is to have it be open source, and then your company should be willing to 'contract out' and do customizations on demand for their clients. I do a lot of customization of my company's software (nobody likes it 100% out of the box, no software ever does things just the way the client wants). If your company charges for customizations, then you build up a base of customizations. If you find that 20% of your customer base wants the same customization, just incorporate it into the build. If it's only 1 customer, it's not worth including. Think of it as sort of a Darwin inspired method of evolving your application. Those changes that are needed bring in money, and the more money brought in the more likely a change get's added to the base code. Then more customization requests come in, and the cycle repeats. Unlike M$ where M$ decides what you want and then rams it down your throat with a dirty toilet plunger (sorry, all I can think of to equate to Vista).
You just have to develope OSS applications, very carefully.
You have to make it prone to breaking, unintuitive and with a horrible user interface. That way, you can earn money forever by support contracts and paid-for maintainance/seminars/schooling.
The worst you could do would create a "just works" application, because that way you would steal your own future.
HI O WISE PRINCE. WHT TOOK U SO DAM LONG?
...Something that was worth $5K last year is suddenly worth $0 because the free version is just as good as the paid...
I submit that if your software is suddenly worth $0, that is your problem. Why? Because folks at Red Hat will not believe you though there exists CentOS, which is just as good, and many others.
Here is what you should consider. Change your business model...that could help. Agree that not all software is good to survive on in an open source environment unless you can get a way to lock customers in, or do what you do really really well. Better than anyone else in the business.
In the sense of "who pays for it and why" most software has always been a by-product of other industries. The stuff that isn't(mostly games and consumer utilities) is highly visible; but there just isn't that much of it(and, even then, much of what you are buying in your package of Quake or Quicken isn't software per se; but software wrapped around art or accounting expertise). Open Source, though, has really accelerated the move from the "who pays for it and why" sense to the "quite literally produced by" sense of by-product.
Whether this is a good or bad thing depends on who you are. For a substantial percentage of developers, it probably doesn't make much economic difference. Somebody always needs to write the software, whether those somebodies are all bunched together at SomeBodieSoft Inc. or spread across SomeBodieSoft's former customers. People who have invested in selling software are likely to suffer a net loss(as a whole: Redhat may be doing fine; but their gain will be less than Redmond's loss). People who have traditionally bought software will likely enjoy some gains, mostly captured from the losses of the sellers. I suspect that a certain number of software operations that are on the cutting edge will remain proprietary, and largely as they are today, as will producers of software packages that are mostly about non-software stuff(a big-name videogame, say, has economics much more like a movie than like an OS. Games will probably use more OSS plumbing and libraries and stuff; but will continue to be sold more like media).
"My company is an open source software vendor/developer .. Over time we've seen our business model eroding as other open source projects produce free versions of the same extensions and utilities that are our bread and butter"
.. As a professional developer, do I need to fear this or feed it?"
What's the name of your company, what are the names of the companies that eroded your business model. Under what license did you provide your software. Do these other 'open source projects' provide the software under the same license. If not shouldn't you report them to the FSF?
"Is open source ultimately a race to zero?
My understand is that with the Open Source model, you provide the software and make moeny on service contracts. As such there will always be a market for professional developers.
davecb5620@gmail.com
"My company is an open source software vendor/developer. We maintain a popular open source project and keep ourselves afloat by producing commercial products derived from or extending the value of the core project."
If I understand this correctly I think the business model is what would keep me away in the first place.
I am happy for "the same code base" to be available gratis with no pro support or for a fee with pro support, or free with paid pro support available.
But since one of motivations for operating in the Free software realm is to get myself out from under the vendor lock in problem, your business model makes me mistrust you. And note that this is not a case of wanting everything gratis as there is a situation I know of now where we cannot consider moving to the Free software option because currently there is a Free software option but it does not have the needed paid for support option at a competitive price that we are aware of.
I still think there be to be some future for industry association funded software development and support. But perhaps I am way off base on this as it has seemed obvious to me for years and I have seen no move towards this in all that time.
Now, if the world can get all to software it could need "developed" gratis by people who get a kick out of it so much the better but somehow I think that people will be able to get paid to develop software for a good long time to come. Getting paid for a monopoly on producing and distributing copies of software is another matter.
all the best,
drew
--
http://zotz.kompoz.com/
FreeMusicPush If you want to see more Free Music made, listen to Free
According to him, you don't really exist.
So take it up with the guy that started it all. He'll patiently explain exactly why you are merely a hypothesis, then you can tell that to the bank and they'll stop bothering you about those hypothetical mortgage payments. Also, hypothetical people don't have to pay for things at the grocery store: you just share them.
If you were blocking sigs, you wouldn't have to read this.
Regardless of what anyone thinks, for a business to make any real money, basing it on purely license revenue is ultimately a dead-end street.
Professional Services is a way around this, but that can have scalability issues and - if your product isn't that tough to install, configure, customize - then the sale of consulting services is tougher.
Selling your software as an enabler to streamline the business is another option, i.e. instead of selling the bells and whistles sell what the product does for an organization and indicate that the reason why you are able to do this is that your company has "x" software that no other company has along with the domain expertise.
There are other strategies I'm sure people can come up with.
And since the base is open, the investment in time required to make a competitive product is just the extension itself. Usually something a motivated user can and will do.
And no, it's not a bad thing. But it does mean a changing business model. I really don't think there will be much in the way of pure play software businesses in the future. I also think the "support" model is a mirage.
Software will be what it has always been for me and many others... a necessary component of a larger system or product that does have a barrier to entry (for me, that's embedded systems).
How many of you have been in the situation where you had to productize software and support a family based on this? It's hard. It's a lot harder than than simply checking features into an OSS project.
Speaking as someone who was a partner in a non FOSS startup company (successful), someone who has an a Cs degree and an MBA, and someone who has actually researched OSS business models, it is my opinion that FOSS projects drive down the demand for software as a product faster than innovators can productize. FOSS also creates the expectation that software should just be free. People don't want to pay for Microsoft or for whatever you are building. And FOSS is trans-national. FOSS makes it incredibly easy to outsource high paying US software jobs to developing nations that charge 1/3 the salary. This again makes it cheaper for the consumer but ultimately discourages developers from innovating based on the profit motive.
FOSS is an incredibly powerful and disruptive force in the high tech global economy. But it's unfortunate that FOSS is actually eroding the future jobs of the developers who contribute to it. Think ahead 20 or 30 years. Do you want to be trying to support a family, paying a mortgage, putting several kids through college while competing against salaries of developers in India, China, Vietnam, etc while they provide cheap services based on FOSS? An unhappy but highly likely scenario.
It does seem economically that FOSS can encourage a race to the bottom of software develop salaries in developed countries.
One of the big keys to making money off of software is specialization. Great versions of most any type of general program can be found in open source form. However, projects that develop for very specific needs of many different industries are often perpetually stuck at a fledgling stage. When you address the very specific needs of a certain type of user, it is easy to find markets that can be profitable for commercial software, while at the same time not being widely interesting enough to be addressed by the open source community.
I work with a Government agency in Ireland, (I work for a university to avoid confusion). We developed a really innovative information system with them, a web-based system which allows flexible mapping, GIS work, sophisticated calculations, open ended queries, loads of pre-specified reports and more. It is entirely open source.
It would have been economically unfeasible, and, I think, technically impossible, with closed source software.
The developers were paid, and are still being paid, quite a large amount of money to build this for us, maintain it, and keep it moving forwards. My view is that give great value for money. All the stuff they develop for us is GPLed.
This seems like quite a viable model to me. What's not viable is the 'write a better video-processor' model which you describe. You need to work with your clients, support them in improving productivity, ease of use, cool new features, whatever it is they need for their business.
Good luck,
Anthony Staines
-- Anthony Staines
Well, some of this is inevitable, and something you can't change. People are spending time writing free software, and it will undercut commercial software... and you can't stop these people. The fundamental problem is pretty much exactly as MS says it. A commercial software is written, extensive R&D is done on the target market in order to design it, it's released, and a year later somebody else has simply copied the idea. It goes to show that the SOFTWARE isn't the important part there. It's the IDEA. This is why MS makes claims about innovation all the time. Most of the industry already knows this, and their solution is simple: protect the idea. Patents. And you know what? I can't think of any better idea. The alternative is to let it continue. Maybe that is an alternative. The best we can do then is guess about the future... will people just stop investing in R&D? I don't know for sure. And if you're idealogically against patents for some reason, well... I can't help you! There are some people ideaologically against private property ownership at all. I can't help them either. =)
What I believe is that software business is overrated. Even that almost everything is going to digital format and will coming depending computers, there is too much developers actually to get a payment from what they do. This would not be the case if IT "world" would be closed at least as much as it was middle 90's. You can fight, use patents to stop others competitors and do everything what you just could, to "protect" your own work. But same time you slowed down the whole world development.
In Open Source, there are lots of hobby ideas etc, #1 idea is to get software for all. Mayby there will be a good balance where you get paid from software what you do, but because GPL license, anyone your client can give same application for free. Doing this, they will "harm" the community. But they will give the world a freedom to develop and take technology in use faster than few companies would be controlling it.
So it is always a race. If you want to get money for your software, develop it faster, make new ideas and do not try to sit on it forever. Mayby a two years is the max time what you can use same kind product getting money. After that you need to have a totally new innotative (how do you spell that :-D) technology what you could sell again.
Open Source will not be so competitive on all IT areas, like on games and other very long term business. It could be, but because the project is transparent and you can always catch the snapshot from it and check how it is going. It will give a feel that it does not develop so fast.
Example of Total Annihilation Spring game engine. You have lots of games using Spring Engine and TA mods using it. But still only a few games/mods are different enough to be a "good". Otherwise that project is halted someway to micromanagement without actually doing so great things (last one was great water bump-mapping effect what looks really good when comparing newest games on all platforms). Mayby the problem is that Open Source has lots of potential to develop whole world even faster rate than now it is doing. But it miss lots of great management persons who like to sit on payroll jobs getting money.
Really, I'm surprised you still selling opensource solutions without being driven out of the market.
I didn't say you should switch to closesource. My friends' companies develop with, on, from opensource projects and still make profit with them. Why? Because they know how to keep up with the market.
They sell Appliances, like those CISCO routers and Checkpoint firewall, but perform some other functions like MTA, Virus scanner, load balancers, etc.. Appliances with opensource elements in them, such that they can be trademarked and brand-protected, can be maintained, without paying huge royalty. Above all, you can still contribute opensource projects back to the community, and keep it growing.
This is just one example to make use of opensource projects. Honestly I don't really know your business so I don't have further suggestion for you. But I'm very sure the problem doesn't lie in adopting opensource projects. Someone else makes money with them, if you can't, don't blame opensource projects, blame your marketing strategy.
I view open source software as something that is produced for practical motivations:
1. drive the cost of basic infrastructure towards zero so more money is available for a business's specific problems and applications. I am an independent consultant and from my point of view when the costs of projects are reduced, then there can be more projects. Also, projects are judged based on cost vs. benefit, so more projects can be successful.
2. large companies like IBM make money off of services - open source increases their profits more than the money the contribute to open source projects
I suspect that very long term open source will be even more widely deployed.
That said, I also believe in a healthy commercial software ecosystem. For example, I sometimes use very expensive commercial Common Lisp tools even though the open source tools are also very good. Computer games are probably another area where commercial products will be used more than open source because game development is high cost and high risk.
Should be free. Its the custom stuff that should cost. ( oh, and support )
---- Booth was a patriot ----
There is no market for selling a commodity with a zero cost of production. This is basic economics. If you want a good business model, sell something that doesn't have a zero cost of production. If you want to be in the market, then you have to do this by selling software that doesn't exist yet, since any software which does exist can be reproduced for zero cost.
The commodity off-the-shelf model for software only works because we have laws that let us pretend that software is a product.
Look at the market for commercial writing for an analogue. The vast majority of writers are employed writing for newspapers, magazines and web sites. Quite a lot are employed for in-house publications. A (comparatively) very small number write books. The software industry is exactly the same. Most developers are employed writing bespoke software. For these, open source lowers their costs, because they are not selling a product, they are selling a service: writing some software that solves a given problem for their customers. If they build their solutions on easily-modifiable, open source, commodity building blocks then they can charge less or profit more.
It sounds like this is what you are doing already, but you are seeing the number of people who need more than the commodity version shrinking. You now have two choices:
Option 1 is a good short-term solution, but again you will find that you eventually have a shrinking market. Option 2 is more effort, but a good long-term business model. Hopefully your existing customers already trust you to do a good job, and you can get them to recommend you to their suppliers and customers when they have other problems.
I am TheRaven on Soylent News
A lot of other folks have said you need to keep innovating, which I agree with, but I would also say you need to take your products in totally new directions...bundling, but in a good way, comes to mind. I don't know what your product is, but can you work with another product and come up with something completely new and game changing? Can you find a new and totally off-the-wall use for your product or build something completely different around it?
No one can afford to rest on their laurels and assume it's *done*; Once you stop, you're effectively out of the race.
The whole notion of a software "industry" is a new and novel idea whose time is more or less come and gone.
Speaking as a long-time software developer, I find it hard to believe that software has been considered a "product." It is so amorphous and ever changing, it is hard to say that a "purchase" has any durable value what so ever.
Prior to the "write it once and get rich" mentality that ISVs dream of was the software as a service mentality which is seeing a resurgence.
Also note, most software written does not run on personal computers, in runs in microwaves, embedded devices, phones, routers, TVs, etc. Only a few companies really make money selling "software." Most P.C. based "software" companies make money selling a service around their software.
For instance, "QuickBooks" is a software product and has a lot of competition, but it is the service that keeps it afloat. TurboTax is the same way, they work all year to have the next years revision ready.
The "write once" software industry has only existed for a short time and for a very fortunate limited few. For people like myself, who have been developing software since the late 70s/early 80s, I don't see any major problem because I don't really see any real effect on the vast majority of the market.
However, please recognize the BillG model is not the only, nor the most successful model of software commerce. It is merely the most spectacular. Long before BillG was born, and long after MS-Windows dies there will be custom programming. People happily writing code to meet some customers particular requirements, and being happy to hand over source and rights as "work for hire". What the customer does with the code depends on their circumstances. The GPL carefully protects this business model.
The GPL does attack the "jackpot" BillG model where returns seldom match costs, and when they rarely exceed costs (MS) they do so totally disproportionally.
>>>In ten years will there be any cost associated with commodity (non-custom) software?>>>
In ten years OEMs will still have to pay for Windows and so will the users (if they do not prefer to pay Apple in a bundle). And there will still be applications for the mass market that can afford high prices. Look at Adobe. Even small flies like you will be around - just with a life span of half a year.
>>>...will there still be a 'software industry' as it exists today, or will software simply be a by-product of the operation of other industries? >>>
Today's software industry is overwhelmingly producing custom software for the enterprise. That's not going to change.
>>> As a professional developer, do I need to fear this or feed it?>>>
You are essentially complaining that you cannot have a safe and comfortable life as fruit fly. Get over it.
The software industry today is not what it was 5 years ago. What does that say about what the software industry will be like 5 years from now? If your business model depends on the software industry staying the same for five years, you are sunk.
"In ten years will there be any cost associated with commodity (non-custom) software?"
That is essentially the model that free software people are aiming to achieve. The idea is that you can make money by setting yourself up as an expert in the software and making special changes for customers. And then sharing the source for those changes with your own customer, and possibly the world at large if the customer agrees.
If software ever becomes a commodity it will dramatically change the way the software industry works. When you can't stomp around about IP to protect your multimillion dollar software investment there must be some compromises made.
I suspect, if this free software thing continues to expand, that we will see more software companies that are much much smaller. And they work more as consultants doing integration and end to end solutions with a combination of existing and a few custom software packages.
If you want your own business model to succeed you have to continue to offer new features and products to differentiate yourself. And consider doing something few in the free software community can do on their own. Offer some valuable service(s) with the software as well. There is the obvious service of support, but perhaps there can be others that involve datafile conversion, backups specific to your product, installation and integration, or some of the other tasks that are necessary for a company to go from not using your software to having it part of their process 100%.
“Common sense is not so common.” — Voltaire
Now go round the hardware store. In ours there are several kinds of push fit and screw fit plumbing. The pipe is plastic, you cut it with a simple little tool. I recently had to replace the water softener and the new one had different plumbing. It took me nearly half an hour to put in four bends and a few joints.
That's the race for the bottom. Basic plumbing skills now take a day to acquire and, by following the instructions, you can do a safe job. But plumbers are still employed. I'm not about to service my boiler, or install a bath. I have more sense than to try to put in an oil tank and all the safety equipment, following all the codes.
It's like that with software. It is not a race for the bottom, it is called progress. An SMTP server is now a basic piece of kit. The learning curve for spreadsheet design is, basically, over. Unlike the so-called creative arts, engineering does not recognise the idea that somebody should be rewarded forever for a one-off contribution. In a knowledge society, new knowledge has value but old knowledge is free.
Eventually, kicking and screaming, I expect we will get Open Source Law, and so-called lawyers will no longer be able to charge excessively for basic legal advice in simple cases. But specialist lawyers and the Supreme Court will still be needed, because there will still be hard cases. The same should really apply to all professions. And if you want a guaranteed source of income, make something essential that wears out. Grow food, make clothes or shoes.
From scarped cliff or quarried stone she cries "A thousand types are gone, I care for nothing, no not one."
I can see this being a real plight for the professional programmer employed in the software industry and I am empathetic. If the software industry collapsed as a result of open source software, there would be new opportunities for computer programmers outside of the software industry. Other industries would still need programmers to maintain, improve, and customize these applications for their own needs. Arguably, software quality would improve because instead of rushing code through alpha and beta testing so that profits can be turned, we would see software that has been put through its paces ushering in an era of unprecedented stability. We would start to see commodity file servers with stability approaching mainframes. There are precious few ideas of Richard Stallman's that I agree with, but one of them is that software really does belong in the hands of the people. The software industry has become patent greedy, great at releasing oftentimes mediocre applications, and more or less forcing its customers to upgrade to the latest versions.
All this business model/support services/innovation crap is in reality WAY to difficult to implement. You have to think, figure things out and stuff like that.
Gotta lousy business? Get the government to bail you out.
It seems to be all in vogue these days.
Schroedinger's Brexit: The UK is both in and out of the EU at the same time!
"The world provides no guarantee that you can forever be profitable at the thing you currently make money on."
I suspect the issue isn't perpetual income but is it fair competition? Are the rules that OSS plays by fair to only a minority?
Shai Schticks:"You don't make peace with friends, you make peace with enemies"
to point out that im the anonymous coward from last post?
You speak London? I speak London very best.
Ever since the plough got introduced there have been productivity gains. The tools that we use get better. And we need less input to produce the same or even more output.
To not answer your question, Yes and no.
In some sense, all software is, in essence, analgous to the broken window. After a piece of software is created, any subsequent sales are equivalent to the broken window (due to the fact that exact digital copies can be had for practically nothing).
You can argue that software vendors have to recoup the cost of creation -- but ask yourself this: How many times have you bought the same piece of code, labeled as an "upgrade"?
To companies that produce stuff or even that sell services, buying software takes away from money they could use for reinvestment, or for paying profit to the shareholders. If they have software that does exactly what they want and costs them $0 to maintain then they are happy. If OSS software serves to help them achieve this ideal, then in this sense OSS is a race to zero, at least for the creator of said software. However there is a gain in profit for the creator of the product or service.
However, no commercial software product is exactly what a company wants or needs, there is always going to be some customization, some maintenance involved. This is new work, not old work that you are paying for again. Once you step away from the idea of the sale of software of a product, things take on a new light. No longer a broken window, companies are paying for time and knowledge.
So in that sense, it's not a race to zero. Software engineers will still be in demand.
(I was only an egg, but then I cracked)
It's not clear that there's an open source community (or ever will be) for every type of product. Linux would not be what it is if some really big companies weren't funding either development or developers. And the reason? They think the technology and the business model creates an ecosystem independent from Microsoft, so it was worth doing. OpenOffice, same thing. Firefox, too. And it was cheaper for them than trying to maintain their own Unix variant, including trying to get commercial 3rd parties to write software for their particular platform. And the old players back in the day (Sun, IBM, HP, Digital, SGI, etc.) and their current corporate incarnations were essentially hardware companies. So switching to Linux to participate in an ecosystem made sense.
At the same time, take a look at some of the small projects, "community" stuff. How many overlapping projects are there? Not even forks. Just a different implementation, with variations in quality and design of the same basic idea. There's clearly a desire to do your own project, not work on someone else's in many cases. This arguably dilutes talent, since it's pretty obvious that there isn't an endless supply of talented, motivated developers. Sort of like adding too many major league baseball teams can be a problem because there aren't enough top-quality pitchers. And frankly, there are a lot more developers who think they're able to design something than actually can.
And then there's that "motivation" problem. Take a commercial package like SPSS. Where's the supported, open-source alternative? That's been thoroughly tested and demonstrated to work within a certain degree of accuracy on a given platform? And has a good user interface. If you're relying on volunteers, they work on the code they want to work on. And there's a subset of developers who would actually be able to work on a package like this. And let's not forget coding for multiple operating systems, including Windows. It's not what a lot of people consider "fun". And there's no incentive for companies like IBM or Novell to pay programmers to compete with a package like this (since money is the other motivator), so there's no real competition. You might have someone releasing a tool that covers some of the same ground, but it's unlikely to be as comprehensive.
Look at GIMP. No real corporate backing at all. It hasn't been considered strategic the way other apps (OpenOffice, Firefox) have been over the years. It's a wonder it's made it. They're gradually addressing the limitations. But it's harder for an entirely volunteer project vs. something with people on a payroll. And with Photoshop Elements dirt cheap, and professionals using Photoshop (because that's the standard tool, and a lot of them are generating revenue with it, making it merely a deductible cost of doing business), it's had trouble getting traction outside of the Linux community
Educational institutions provide an example of putting resources behind open source when it makes sense to them. Moodle and Sakai are both alternatives to Blackboard/WebCT. And attractive ones, given how lousy and expensive it is to do business with Blackboard. Moodle is pretty usable out of the box, has an active community and works. Sakai CAN work, but it's not really a Learning Management System out of the box. It's a framework, so you need to have developers or hire someone to implement it for you. But the point is that these apps are central to the business of schools, and the commercial packages are expensive, and that expense is annual. You need developers anyway, if you want to integrate a commercial project with your existing systems. So there's an incentive.
But for something really specialized, like a statistics tool that can cover everything from intro to stats to high-level research with huge data sets? Not so much. I'd put ArcGIS in the same category. It's just difficult to imagine an open-source project mustering the resources to dislodge large, complex specialty tools that don't have mass appeal and are affordable. They're too big to just take on the project, and they're not central enough to the mission of the organization to put resources behind replacing.
Microsoft is still trying to sell MS Office for $500 even though Open Office does the same thing from nothing. Is this a case of Open Source killing a close source product. No, it is a case of closed source company not innovating. There is nothing innovative about a 20 year old product. Is anyone going to pay top dollar for a computer that is still largely based on 20 year old technology? I think not. Though we use hard drives, we don't use the same old IDE connectors. Why does not MS give away a significant portion of MS Office and sell some other product. Because MS does not innovate.
The majority of OSS are so because they are well known technologies that are easy to recreate. We do not have well worked collaboration software because that is harder. We do not have advanced design software because that is harder. Do we think anyone would buy Multisim if it still was basically a SPICE? I just bought a some design software and it did not even have a proper installer. Is this innovation?
IMHO, we are at a point where people take profit as a right, and not a privilege. Just because a product is created, does not mean that consumer have to but it, or be forced to fund it though taxes. Now, I don't know the specific case of this product. It might be something like the Limewire client for the Gnutella network, which is a relatively innovative product, but likely has relatively few paying customers, given what is does. Sometimes it is hard to make money even with a good product. But this has little to do with the OSS nature of the product. Look at the money invested in DRM for games just so they can make a buck.
"She's a scientist and a lesbian. She's not going to let it slide." Orphan Black
You need to be like MS or Apple and force your products onto computers at the OEM level so everyone is forced to use your products forever.
I'm in the same boat.
The standard advice of charging for support is completely bogus!
Companies hire consultants to do support, these consultants support other products as well as yours, which makes them the single "go to" guy for many things (a nice feature for would-be clients, just call "the linux guy")
This takes a major dent out of anything you could make by charging for support.
Whats more, why develop software when you could just charge to support other peoples software?
Making your money by charging for support is not a viable option.
What you CAN do is charge for open source, even if you license it under the GPL.
This makes a lot of sense for vertical products because it removes some of the fears people might have of you going out of business.
Hi, I'm Oliver Oxenham, posting about the National University of Singapore (NUS) Library 3D interior mapping. After investigating a few other development options, we decided to go forward with Google Earth Plugin especially because of its API's ease of use -- there was no need for us to reinvent the wheel in the area of 3D display in the browser and camera movements in a 3D environment. The NUS library features a few innovative uses of GE plugin as well as Google App Engine. App Engine is the platform that controls all the information you see in this 3D application . We offer our customer an administrative interface to allow them to create their own placemarks (landmarks) within the 3D library as well as choose to make them visible or invisible. The contents of the landmarks are editable. It can display formatted text or even videos. Additionally, customized orientation tours can be created on the fly by the user who only has to select a list of landmarks and arrange them in the order they want the tour to play. The GE plugin displays a 3D model of the NUS library with the earth covered with a black layer so as to make the model stand out more and avoid distracting the user with unnecessary features. The navigation on the right is automatically generated based on the landmarks created by the user. It allows the viewer to navigate through the library from landmark to landmark. The application also allows 3D book search . Google App Engine datastore keeps a catalogue of book call numbers and shelf references. When the viewer enters a call number in the search box, the latitude and longitude of the appropriate shelf is retrieved and located in 3D. All these adds to the fact that we are using the GE plugin for an interior 3D of a building instead of the usual outdoor of an area. We believe that a lot of our implemented features can still be improved and we're working hard to improve them and make them more generic and reusable in the future. We believe 3D interiors can be attractive to some customers.
As is often the case...it depends.
If you are working on software that's of interest to developers, someone who can will almost certainly build a FOSS version of it rather than pay you. With a few very notable exceptions, FOSS development is essentially self-serving. On the other hand, if your product is aimed at a non-techie audience, it's unlikely to stimulate FOSS competition.
The Gimp is an excellent example. It tends to be compared to Photoshop, but the comparison is unfair. Photoshop is a heavily-funded complex product aimed at a community that uses computers as tools and has no interest in how those tools come into being; it has nothing to fear from FOSS. In terms of its capabilities, The Gimp has yet to reach the level of my five-year-old version of Jasc Paint Shop Pro, and its features curve is leveling off. It's fairly evident that The Gimp has reached a point where it's good enough for the developers and their friends. They may add a few features for the fun of meeting the challenge, but I don't see myself switching from Paint Shop to The Gimp any time soon, or ever.
There will always be a commercial software market, but not for development tools, operating systems, or technical utilities. The big players will continue to fund development of open software that will allow them to compete with Microsoft, and the occasional labor of love will crop up. For the rest, it's either pay for it, or no one will build it.
I'm a Programmer. That's one level above Software Engineer and one level below Engineer.
"That's why a closed source desktop (Apple) is winning the desktop wars with an underlying base of OSS."
Sure this argument stuck around 10 years ago. But these days it is very different. Apple does not give away the secret sauce, namely the UI. If you look at the iPhone, please tell me which parts are open source?
I would argue that Apple is an excellent example of how OSS fails to make a profit.
OSX and Linux started around the same time in terms of popularity and market share. Yet nearly 10 years later RedHat is still a peanut gallery while Apple is a powerhouse.
Personally, OSS does provide great products (eg Apache), but it most definitely DOES NOT provide a business model. As much as people like to say, "oh you can sell support, or what have you" it is completely incorrect. The guy who said that it is a race to zero is completely correct.
That's why I don't actually try and compete with Open Source. I stay completely out of their way. Not worth the effort nor problems.
"You can't make a race horse of a pig"
"No," said Samuel, "but you can make very fast pig"
Oh? Do you disagree that democracy is a race to the bottom, or do you disagree that a democratic method of creating software will also be a race to the bottom?
In many cases, mediocre and free/cheap is better (and the designed by morons generally is notwithstanding) than expensive and good, at least in the public opinion, which is why so many people eat at McDonalds.
"It is possible to commit no errors and still lose. That is not a weakness. That is life." -Peak Performance
the reason os/x beats foss is not 'good enough' to 'great' but lots of marketing dough to 0.
MP3 Search Engine
Unfortunately, yes. And that is because Geeks and Nerds don't interact with real life. They are not street-smart, don't know the value of money, or bills, and basically don't know how to behave in a society. That's why they are picked on at schools and can't pick up girls.
Now, not knowing anything about business or real life or money, they have decided that it is a good idea to work for free.
That is what is wrong with the software industry today and why it isn't a good business to be in. The software business is basically an organization run by geeks and nerds, and because they don't really know anything about real world, money or business - this is the wrong place to be.
Show this comment to your president and CEO and tell them to bail out, and let geeks starve themselves with this "open source", free stuff and then come back once the nerds have died off from hunger and loneliness.
You can mass produce products. If there is competition they eventually become commodities with negligible profit.
The companies might try a number of ways to distinguish themselves, but eventually it becomes a race for zero.
Services are different. Even if the information is free, the particular service provider can do quite well.
Think doctors, lawyers, personal trainers and hookers. The knowledge of what they do is widely available, yet they can all sell their services, and make a profit on any particular transaction.
We're moving into the service economy, goods will still be there, but production of physical goods is becoming increasingly less profitable, and less important.
Open source allows companies to focus less on s/w development (though good OSS-based companies always remain firmly involved), focus more on fostering a thriving community, and spend the majority of their efforts on the area that the proprietary companies eventually have to focus on (paid services, bundled products, etc...). The OSS companies get there first, are typically more nimble because they aren't stuck wasting resources on keeping licensing revenues high. They have already accepted that such a model is a constantly dwindling one.
It's a simple matter of complex programming.
"Marginal cost is the cost of making the next one of whatever you're selling. In software, this is a little tricky because the raw material cost of the next copy is bandwidth or the CD/DVD media. The marginal cost of the first copy is the big one... it absorbs all the cost of development."
Amortization use to apply until piracy became mainstream. Now it's one chance (near zero) and "we got you".
So, in this way of analysis, software companies take a big loss developing the software, then can make it back by selling enough copies, then can afford to make it near-free because the sales are pure profit.
Well, except it's only "pure profit" if you're assuming all business costs have been taken care of, and no one intends to invest in the future.
Shai Schticks:"You don't make peace with friends, you make peace with enemies"
so where do we send our bank account information this time to get 10,000,000$? They tell me that the 3rd one is a charm.
You speak London? I speak London very best.
I think open source is driving the value of software down, but I think there's a limit to how far it can go.
So far closed source has been indirectly enabling open source by keeping college educated programmers gainfully employed so that they can work on open source projects without having to make money on them.
As software development becomes less viable as a business model, fewer young people will be interested in going into it. Even those who have a natural aptitude for programming may avoid it because they are not interested in the service model.
A law forbidding developers from coding for free.
Oliver's law of assumed responsibility: If you're seen fixing it, you will be blamed for breaking it.
I'm here with the "it depends" answer. It depends on the application you're writing and supporting, and certain apps will give you a better chance of success. How about an OSS competitor to MS Outlook? Given all the people who have Outlook-centric lives, I'm surprised there isn't a good OSS alternative out there.
This is a classic manufacturing issue. The killer point is when an expensive item becomes cheap due to mass production. The makers of expensive items seldom survive that transition.
Historically, this has happened time and again. It happened to basic watches around 1890, when Ingersoll introduced the $1 pocket watch. The watch industry got hit again in the 1980s, when quartz crystal watches became both cheaper and more accurate than mechanical ones. (Neuchatel, Switzerland was hit hard by that.)
One strategy is to position a product as a luxury item. Rolex took that route in watches. Their CEO actually says "We are not in the watch business, we are in the luxury business. Apple positions themselves that way in computers and audio/video gadgets.
If that doesn't work, you're toast. There used to be a high-end graphics hardware business, with companies like Evans and Sutherland, Dynamic Pictures, Matrox, and SGI. They all got clobbered when gamer graphics cards got good enough to take over pro jobs. I visited Sony Pictures Imageworks around 1997, when all their animators had SGI workstations, with a few PCs being tried out. When I went back in 2001, everybody had a PC, with a few SGI machines still around to run legacy stuff. SGI went bankrupt in 2006.
Open source is just another form of commoditization. Most open source software isn't very original. There's usually some predecessor commercial product that did roughly the same thing. Open source is the same kind of competitive threat as white-box generic hardware.
"as a digital good that is virtually free to replicate, competition in "selling" software will lead to zero, regardless of whether it is FLOSS or closed, it all depends on marginal cost which is $0 for software (thanks bertrand [wikipedia.org])."
If we are going to assume that everybody will break laws, than all goods are free and all goods have no value.
You raise an interesting point, and I think there is a bit of truth that this may incentivise bad behavior.
But done right, and your service is much more than bug fixing. It's market research as you interact with customers and find out there current problem and their future needs. It's customer maintenance since each time you interact with your customer you are selling them again on why your company is the smartest, friendliest, easiest to work with, thus keeping them from buying competing products. It's customer tutorials as you explain how to setup the normal installation, and how to use, and why and when to use advanced features the customer isn't even aware of.
All of this can be used to help your customer understand the value that your company's support provides.
(Caveat: I just pulled this response out of my butt. I think it's truthy good, but ymmv.)
There are sometimes good business reasons to develop open source software. There are factions within the software development community, however, that think software should generally be free and open source. The implication is either that what developers spend all their time producing has no value, or that it does have value, but that the developers don't deserve to be paid for producing it. I can understand some consumers advocating this view, but developers themselves?! That's just stupid.
Well the problem with that argument is that OSS does the %90, but leaves it to the commercial sector to do the remaining %10 that takes a product from "good enough" to great.
Tell that to the Amarok guys. And the Miro guys. And Mozilla. And the Compiz team. And Bram Cohen. And the kernel team.
That's why a closed source desktop (Apple) is winning the desktop wars with an underlying base of OSS.
Yeah, all those Apple netbooks are sure kicking Linux's ass, huh? You fail.
Hey, I finally got my first freak! Took you long enough!
OSX and Linux started around the same time in terms of popularity and market share. Yet nearly 10 years later RedHat is still a peanut gallery while Apple is a powerhouse.
You might be able to say that in the desktop market, but the exact opposite is true in the server market.
From what I've observed over the years, OSS works great on the server/enterprise side, where there is significant money to be made in support services. On the other hand, end-users don't buy support contracts, leaving almost no money to be made there to pay developers, so closed source wins.
What is really happening with open source is that the value proposition has changed. With closed source the value is attributed to the software itself. Some open source businesses try to kludge themselves into this model as well. In reality what the open/free software movements have done is shown that the real value is in the time and effort of the developer. Once the market realizes that they are paying for service and expertise from the developer, the market will start to make sense.
Cheers!
CS
Most development happens in-house.
The immense majority of developers need not to worry about a substantial reduction in the job market.
IANAL but write like a drunk one.
If one project is lousy, there will be incentives for other groups of people to pick that project up and reform it, initially perhaps as a way to "scratch an itch" but from there there is is no reason why a better project acn't be spun off commercially.
In the other hand are you seriously suggesting that today's commercial software is "robust and easy to use"?
If you are, please, don't make me laugh, I am busy being depressed with the financial crush.
IANAL but write like a drunk one.
I am seriously surprised and impressed by the quality of the answers given so far. Slashdot coming of age? I for one welcome our new slashdot overlords.
Hardware can drive changes in software and people will go for that but the reverse is rarely true.
But notably, your "rarely" includes video game consoles. Plenty of games come out only on one console, such as Halo or Smash Bros., and they're considered system sellers. Street Fighter II for Super NES and the version of Mortal Kombat with red blood for Genesis were examples back in the 16-bit days.
And yet Red Hat's profit and revenue keep on growing.
Do you even lift?
These aren't the 'roids you're looking for.
They are a delightful bunch.
Lets humour you and accept that baseless fallacy you are ejaculating at face value, so how is that different from closed proprietary software?
How many different versions of Vista do we have? Goodness knows. But the way they are differentiated is by crippling the cheaper versions of the same software. Now tell us again with a straight face that such practice could be attributable to OSS applications exclusively.
The dynamics in building quality products have not changed a single iota: if you are not prepared to support the software for which you are an expert, you are going to fail, the difference is that as a provider of OSS products you have open many more alternatives to deliver a working solution instead of being shut out from markets by means of planned incompatibility, vendor locking and arbitrary obsolescence.
IANAL but write like a drunk one.
w.r.t. bandwidth, most software companies already have to have an internet connection so there is no extra cost to them.
Citation needed. First, once a publisher starts distributing more copies than an entry-level $100 per year web plan can handle, ISPs start to bill by the bit. In addition, a lot of mobile phones can't just go to a web site and download software; instead, they have to go through network operators who bill the publisher per copy for access to the app store.
Don't write the software for free. Find your first customers (or more), have them pay for the development of that product (i.e. pay for the development costs, which is salaries, infrastructure, operations, marketing, commissions, bonuses, etc...)
How would such a business model work for, say, video games? Or what other model would you suggest?
Don't forget file format lock-in and network effects.
If you're the only one who can make a 100% compatible word processor ... and everyone uses that file format ... then you can do just about whatever you want. As long as the damage you are causing to your customers is less than the cost of them migrating (and causing problems with THEIR suppliers and customers).
That's why there was such a big push for ODF. Once the file format is standardized, ANYONE can write a word processor and compete on quality and support instead of lock-in.
Effectively driving the cost of word processors down to zero.
People paying with their own money will put up with a lot to save a few quid or euros. Companies earning money from the software they use will pay a *lot* to make sure it works as quick and optimally as possible. If someone is sitting in their bedroom and writing software that outperforms what your full time programers are doing, then I would suggest getting either new employees, or a new career for yourself. As an example, there are lots of free and good programs to view GDSii (chip layout) files, but my company pays a big fee for a site licence for the one that we think works the best with the sort of large files we deal with. If it saves a few minutes each time someone uses it, that is worth every penny to us.
Everyday tasks on the computer will eventually be in the same boat. "What?!? People used to pay for word processors?!? To listen to music?!? To watch movies?!?"
How many people reading here can easily program and reproduce the game "Pong"? I'm sure Atari guarded that knowledge back in 1972.
Literacy and the printing press was the first innovation making technology reproducible quicker. The internet is doing the same thing now. My guess is when cheap 3d printers can reproduce electronics instead of just plastic figures, we'll see the next jump.
WinZip's value to me is also effectively $0, since on Windows I have 7zip which does the job competently enough
Agreed 100%. I see little to no need for WinZip or WinRAR with 7-Zip around. But what's the value of something like Halo, God/Gears of War, Grand Theft Auto/Turismo, War/Starcraft, Katamari Damacy, Super Mario/Buster/Smash Bros., Animal Crossing, or any other video game with a significant budget spent on non-code assets?
The Internet was built on free software (if you can't understand that this has nothing to do with price, I don't see what you are doing in this discussion) and open standards.
First email servers and clients, later news (USENET) servers and readers, ftp, DNS, the web.
Honestly. What the heck are you smoking?
Oh, I see. You think computing is circumscribed to the desktop, where some visible applications have had some unwarranted economic success in the back of monopolistic and abusive behaviour.
Keep drinking your KoolAid, the rest of us moved on around 10 years ago.
IANAL but write like a drunk one.
Open Source Software simply has a different economic cycle.
Proprietary software:
1) One makes a whole bunch of features in the software and increases the price of the software over time because these features are deemed profitable.
2) Bug fixes that are deemed profitable are also fixed.
3) Users do not own the software to store their information or run their business.
4) Commercial software relies on patents to restrict distribution and keep prices high, eliminate any competition.
Software continues to be useful as long as it is within reach of the community that needs it.
Open Source Software:
1) Software is designed by single engineer to fix a problem. Over time more people contribute if the software is deemed useful.
2) Bug fixes are fixed by either the end user, the programmers or usually the community in general that forms around the software to support it.
3) The software is owned by the community.
4) Software is created outside of patent nations to prevent "issues".
Software continues to useful as long as the community says so.
This race to zero what you are talking about is because the technology is allowing a large number of people to connect over the internet, to solve issues with software commercial companies consisting of a very few number of people, cannot.
The good news, in your view, is that all software pretty much still sucks. So you can be very successful in supporting organizations with contract sales.
In any case, the focus is switching to the actual use of useful software, instead of the "dubious" nature of upgrades needed or not, and "licensing" which really is screwing the customer over because it has nothing to do with use, just copies of software.
-Hack
Got Geometrodynamics? Awe, too hard to figure out? Too bad.
No I believe you have open software confused with our economy.
lol: You see no door there!
Closed source is not keeping developers employed.
It is in-house development, which normally is not closed source BTW.
Closed source companies are scared shitless for good reason: most developers are used to share and reuse code (that is how inhouse development works), so they find natural to do so when it comes to FOSS based projects.
Closed source is an anomaly that got too big for our own good, it will be ironed out eventually since it has no advantages whatsoever for the end user, who is the entity that should be dictating how software is developed.
IANAL but write like a drunk one.
Sadly enough, Apple is not doing better these days because
it has a better product but because it has a better advertising
department. It was "better" 24 years ago and that didn't help
it much.
Contemplate the full impact of that number: 24 years.
A Pirate and a Puritan look the same on a balance sheet.
Enjoy that you can sell that peice of software for 5k right now and accept that its not worth it. If you want to continue making money off it, stop trying to make back your entire development cost on your first sale and charge a price for it that makes it so no one else is going to bother doing it themselves, its cheaper to just buy yours.
You were doing relatively well up to here. If you make minimum wage ($6.55 in the US), you will make $13.1K/year. That means you have to sell at least 3 of your so called "not worth it" $5k software just to make that (this is not including overhead). The equation is really simple - cost/unit x # of paying users/year = your yearly wage. BTW, if you don't like paying everything up front, you should hate the GPL, since that is *exactly* what GPL encourages.
Thats the way every other industry works, developers are just too stupid to see that at the moment, and the people we sell to are just now starting to catch on to that as well.
There are few other industries that have this problem. If you make hardware (say, memory chips), if a competitor comes in and gives away memory for free, they are charged with dumping. The only industry that I can think of that deals with "free" content is the broadcast industry and it's not a bunch of roses there either.
This scenario is the same with others that have to compete with product dumping. The ones that can survive in the environment are ones with a "brand" name. All the small frys go under.
Open source != democracy
Open source means only that the source code is freely available. It is still (typically) maintained by some form of oligarchy or dictatorship.
"For the rare exceptions, software is a commodity differentiated only by cost."
Not really. Software takes skill, knowledge, and creativity. If you look into any software market, you will see vast differences in design and function of the various competing products.
Open source will make software a commodity...only differentiated by the support costs.
Over time we've seen our business model eroding as other open source projects produce free versions of the same extensions and utilities that are our bread and butter
I consider open source software to be more valuable than closed source. I think the problem is that a working business model is not yet in place. I think a working model may look Red Hat, or Codeweavers -- but probably will be better. There is a business model out there, it will just take some more experimentation to find.
Why do I consider open source more valuable? Because I know it has a better chance of continuity and survival than closed source. Take something like Windows 2000: a good, simple and reliable operating system. Windows 2k has been obsoleted and is no longer supported -- and will stay that way. Try arguing with Microsoft on that one.
Take features and options... DX10 took how long to be available on XP? Only after a lot of complaints did microsoft back-port. Look at Linux kernel 2.4... Still has active support somewhere, and while not all features from 2.6 can be backported to 2.4 easily -- most of them _could_ be if the money and desire was there. That is what I call ongoing support.
I pay for open source where I can so that it keeps being developed, to keep the authors and people behind the software working on it. They show me value, I show them money.
Consider this: Nobody owns the alphabet any more. There is no value in creating a custom set of letters, because we have a set that works. If you want to consider building the foundation of a more modern, productive society a 'race to zero' so be it, but there's no reason anyone should make money from it once the methods and algorithms are settled.
The things we can do with those letters is greater than their sum. We created the alphabet so we could move on to bigger and better things, built from it.
'Custom' is just another word for 'original,' and only original works have value in the 'Information Society.' 'Custom' software is not the only way to be original, however. You can add value to standard tools in quality as well, as in the proverbial 'better mousetrap.'
The truth is, however, that eventually nobody wants or needs a better mousetrap. That's commodity software. Good enough is good enough, and so it goes with the software industry.
--
Toro
You just shot your argument in the face. Netbooks are good enough, while a MacBook Pro really is great.
As a free software developer I must say that very often free software project lack the focus and leadership to really polish their product to greatness like Apple does. We do have a lot to learn from them. There is no shame in admitting that someone does something better than you do and then earning from that.
OSX branched from OS9, which started long before Linux and has always had a higher market share.
Apple started with a known brand and a strong existing presence in certain markets...
Apple is a single known supplier while Linux is fragmented...
OSX has been available pre-installed on hardware from the very beginning.
OSX has benefitted from the market success of the iPod and to a lesser extent other Apple products. The iPod is the market leader and serves to significantly increase Apple's brand recognition.
OSS simply serves to render obsolete the business model of selling shrink wrap software. Such a business has been artificially profitable by regularly charging customers massively more than the actual value of the work gone into producing the software. OSS simply represents better value for the users, and users far outnumber those who work for shrink-wrap software companies, who are the only ones that will lose out.
http://spamdecoy.net - free throwaway anonymous email - avoid spam!
I was merely referring to the GGP's comment that
"Open source is like a democracy by the people, for the people..."
That's not a good thing, necessarily.
"It is possible to commit no errors and still lose. That is not a weakness. That is life." -Peak Performance
If you think it's tough to be an open source vendor, just imagine what it's like as a proprietary vendor who might have an even bigger investment at risk -- watching the open source market chipping away at it. I don't mean Microsoft or the other major players, as they have already had more ROI than they deserve. After all, it was overpriced "cash cow" products (originally Unix itself) that led to the open source concept in the first place.
The rise of Microsoft marked the halfway point in the race to the bottom. Back in 1980, IBM needed a cheapie OS that would not add $3000 of licensing fees to what was already a $3000 product. The market for $6000 PCs was less than 5% of the potential market for $3000 PCs. IBM was perfectly capable of adapting Unix for the mission, but not without bloating the cost. And besides, the original 8088 was not much of a CPU anyway. Any serious computing would be done via 3270 terminal emulation to a "real" computer elsewhere.
At thsi point, all software races downward approaching a price of zero. It's only a matter of time.
Competing with free is a losing proposition. So don't do it. Unfortunately, management has fallen in love with offshore outsourcing. As a result, the quality of commercial software has no way to avoid the open source juggernaut. It IS possible to out-invest the open source community and still make a buck. That involves real investment and real risk. As long as management stays focused on cost at the expense of innovation, quality and customer satisfaction, the open sourcers are in the driver's seat.
Consider the simple concept of tech support. Blog posting vs. a vendor's offshore call center. Which one responds first? With a workable solution? Resulting in a self-service workaround and a patch for all users? Why do we pay a PREMIUM for "supported" products that are supported by morons? We all know which vendors I am referring to.
I think Apple does a great job of exploiting open source on one hand, while avoiding price erosion in its own products that depend on it. We can't all do what Apple does, but they are onto something.
The IT industry has become an awful place to work. This created a large community of under-utilized, frustrated people who are very anxious to deliver software as it should be. For free, if necessary. Look closely at the key contributors of any major open source project and you will find people with spectacular credentials -- the type of folks you couldn't dream of hiring to work in your company. Competing with these people (at any price, especially zero) is a waste of time and money. The more we dumb down the commercial development business model, the more we feed the process.
Understanding the trend is the first step towards figuring out what to do about it. I think the trick is to plan ahead for the likelihood of commoditization, and maintain a pipeline of new products and ideas that runs ahead of it.
Although I do not have the answers, I am absolutely sure that swimming against the tide is a loser's game.
But it will filter down, people want their home computers to run the same as they have at work, so the more OSS takes off in large businesses the more it will filter down to home users.
Of course in an OSS world the corporate desktop software can be used as a base for the consumer desktop, and the rest of the cost can be rolled in with the price of hardware, this model seems to work for Apple.
http://spamdecoy.net - free throwaway anonymous email - avoid spam!
Paid Devs might have the advantage of focus with an angenda. Suppose your core offering is some multi purpose utility app. Along with people-hour services, that could also include custom tweaks for the particular user.
My first Journal Entry ever, in 8 years! http://slashdot.org/journal/365947/aphelion-scifi-fantasy-horror-poetry-webzine
The tone of the parent post is one of those FUD pieces meant to sound reasonable but which use a broad bush to paint a bad picture while offering little or no substance.
Free as in no cost and makes no money, not free as in whatever meaning you choose to assign to it today.
A bogus attempt cloud any rational discussion.
I can not think of a single free project that is 'better' to the majority of people than its commercial counterpart.
Without any sort of background how can you even make this claim. At best it is subjective.
Free/OSS Projects, IMHO, *ARE* better than commercial counterparts:
Linux (Kubuntu) vs Windows
I use Linux every day. It is my desktop of choice and it is, given any rational metric, "better" then Windows. The 3rd party Windows applications that may not run on Linux don't affect me.
Apache+PHP vs IIS.
Php has greater flexibility and extensibility.
PostgreSQL vs MSSQL.
PostgreSQL has more features, better SQL support, better performance, is more extensible, and runs on more platforms,
OpenOffice vs MSOffice
OpenOffice supports more features that I use, like PDF export.
I could go on, but at least I parameterize my arguments.
Free software tends to follow along the lines of what the developers want it to do, not what the majority of users want it to do.
yea, and Microsoft Dogs and "clippy" were exactly what users wanted.
At least when developers set out to solve a problem, it is a problem that needs to be solved.
Free software developers have very little incentive for the software to align with other users.
Again, restating a falsehood hoping to make it stick.
The current way companies are treating free software is a fad, it won't last for the exact reason you state, eventually people need to eat.
This is a re-phrase of the debunked "you can't make money with free software" Only a very small segment of software developed is directly acquired by the consumer. Most comes in the form of cell phones, embedded devices, etc.
not us geeks who run linux for the fun of it
LOL, I run Linux because I want my computer to work and be reliable, not because it is "fun." I work on my computer, I want my data safe. Fun has NOTHING to do with why I use Linux.
is well refined and works in a way they expect,
Hyperbole, and not even honest at that. Find me one, just one, Windows program that doesn't have a bug. That doesn't have some unexpected behavior.
I absolutely *hate* when applications stop working correctly in Windows for seemingly no reason, and then suddenly work again after a reboot. Even on Vista and XP!! There is no excuse for this.
I could go on and on with the post but it is propaganda at best.
Open Source / Free Software is an amazing resource. In some ways it may make some software business models obsolete, but these models were artificial in nature, selling a product that costs nothing to reproduce is not viable without a threatening legal environment to enforce it.
Before the BillG software model, there was providing service to actual customers. The vast majority of ISV shops never left.
at the risk of extruding or fleshing out the anaLOGy, we need enginers tn develop a microflush COM modes, and reduce the number of hiding places for ms, give them another set of quivering, dark matter tubes to deal with.
Previously: "Linux... Toward the Sunrise..." Now: "Linux... Toward the-- No, now, part of Every Sunrise"
It is a never a 'race to zero', it is a shift from the pre-paid model, to and advertising model.
I played many side scrolling shooters in the dos era. Now those games for children are built in flash, and available on the web, and are supported by ads or adsense filled pages.
Many open source project websites, are ad supported, so there still is revenue. Mozilla Firefox an open source browser rakes in $75 million a year through ad related revenue.
Mediocre isn't the bottom, by definition. Besides, open source software is some of the best in the world in some sectors (notably web servers). I don't know what your rant about democracy is about - OSS projects are very very rarely run democratically, and when they are it usually ends up in a mess. Where do I get to vote or decide how Open Office is written?
Naturally people would rather get something at no cost than to pay for it. So if a free feature exists, people will use it. Furthermore if someone needs a feature, and they determine it is worth the cost of creating that feature, then they may well code it themselves, which they obviously can do with an OSS product.
However, most of the people who would perhaps add a feature to an OSS product are not mainly in the business of selling software, consulting, etc. They're businesses that do something entirely unrelated. In theory perhaps they could sell the new feature they've created (licensing issues are a whole other consideration of course) BUT they aren't interested in that because they lack the business structure to monetize their work and they're already making money, and they've already reaped some benefit from having the new feature.
So, given all of that it would seem to me that a potentially viable business model for the 'core' developer of an OSS product is to simply act as a consultancy and charge businesses for adding features to the product which those businesses need. That relieves them of ANY need to understand the software, pay someone to add to it, etc.
Now you can add a new feature, and even better you can add features NO ONE CUSTOMER could afford to pay for because you can simply say 'well, it will cost $X to build in this feature.' and several interested parties can pool their cash and get the feature added. There are already a number of places that cater to that sort of thing. You might want to look into it.
Of course this also means you have now created a business relationship with these users of your application, and you can leverage that into all sorts of other opportunities, like service provision, etc. You just have to really look carefully at the whole situation and try to find the model that works well for you.
Remember, relationships are always fundamental to business, so always consider them an asset, foster them, and think about ways to help those you have these relationships with. Good business is always business that adds to your customer's value and develops better relationships.
"Malo periculosam, libertatem quam quietam servitutem." -- Jefferson
Welcome to the wonderful world of progress!
The natural state of a market system is to increase production while decreasing prices. Within certain limits, this has been the case for every economic good so long as external restraints (ei, government) have not interfered. It's what innovation and entrepreneurship are all about: figuring out how to produce more or produce cheaper (or how to distribute more or distribute cheaper).
It's tough to compete in a market economy. Thus many industries and businesses choose to expend resources on lobbying efforts to get government to impose regulations, trade restrictions, price floors, subsidies, etc. How much longer until the software industry starts lobbying to regulate open source development? How much longer until the software industry lobbies for price supports and subsidies? Not too long in my opinion. This lobbying won't all be from the proprietary side either.
Progress is painful in the present, but that's no excuse to halt it. Businesses fail, people get displaced, and confusion abounds. But in its place we get new businesses, more jobs, and better lives. Yeah it sucked all those mathematicians got laid off when the computer was invented, but there are far more people writing software today than there ever were professional mathematicians. Progress frees up resources to be used in more productive ways. We still have mathematicians (God bless 'em), but they're no longer toiling away in damp basements producing logarithm tables.
Software prices are plummeting, and only the external restraint of copyright (a government grant of privilege) keeps it in check. But the good news is that the demand for software production still exists. Open Source hobbyists can't produce all the software in the world. There is still lots of room to pay for professional software development. Your particular software niche might not exist in ten years, but there will be other paying niches that will.
If you're really worried about your professional future, I would suggest finding a job where you aren't producing a software product, but producing software for a product, or producing software as a service.
Don't blame me, I didn't vote for either of them!
If you think of the programmer as a creative artist (actually, in many ways there's more truth to this than seeing them as engineers) then this is fully justified. If you are a person who pimps^Wcontrols a rock musician, then the government will try to guarantee you an income even when your product is becoming completely outdated (like 70 years!). If you have a bunch of keyboard monkey slaves, you are expected to live in a competitive market. Nobody goes around changing the law to guarantee you money.
I think almost anybody reasonable can see how that is unfair. What we need is a PIAA which arranges guaranteed incomes for people who have once employed a programmer (as long as they don't actually program or do anything useful themselves). The BSA are a bunch of useless wimps.
=~ s,(.*),<sarcasm>$1</sarcasm>,g if any_point_you_wish();
I'm thinking a moment on exactly what "commodity" software might mean. In our little tech world, I'm wondering why some dev house didn't flood the market with galactic quantities of software Back When It Was All Simpler. The deal with Raising The Bar is ... eventually a once powerful group may no longer be able to keep up, and their loss will be felt in the marketplace.
But I'm really starting to ponder that we're also not starting with Peek&Poke and Assembly anymore. Start with an entire OSS fragment, then add your stuff on top for the specific purpose. Use the Authority of Business to work around the gaps. Customer wants some generic traffic management program ported into a BumperCar Safety module for use in theme parks. You say great, deliver it 7 months later. The OSS crowd might have trouble "caring" about it to go from zero to finish.
So instead of paying for low-level business tasks like letter writing & spreadsheets, maybe we free up the entire paradigm into Doing Something Better.
My first Journal Entry ever, in 8 years! http://slashdot.org/journal/365947/aphelion-scifi-fantasy-horror-poetry-webzine
As I said in a sibling comment, I was specifically referring to the GGP's statement that
"Open source is like a democracy by the people, for the people..."
"It is possible to commit no errors and still lose. That is not a weakness. That is life." -Peak Performance
' Why does "service" have to mean "fixing stupid design" and "fixing idiotic bugs"?'
It doesn't have to, but it's fun and profitable to make customers pay for your bug fixing.
My first Journal Entry ever, in 8 years! http://slashdot.org/journal/365947/aphelion-scifi-fantasy-horror-poetry-webzine
I am not kidding. Our nation, in the last several decades, has been in a rapid pursuit to eliminate the middle class. Software jobs represented a middle class boom which both feeds the income of the somewhat educated and costs the blue chip industries lots of money. We're trying to develop an ownership economy, here, where the only people who make real money are those who own lines of international trade-- and you've simply become too expensive to maintain.
So, the opensource movement is a kind of economic lemming routine, where we are packaging all our technology and translating it in order to commoditize the industry and send it to India and China. It's not like there's anything wrong with foreigners writing software, but I'm not retarded. We're obviously devaluing this industry. I can't think of any companies that are really thriving on open source. The biggest, hottest, most internationally reported linux company, Canonical, operates at a loss. Sun open sourced everything and in turn 80% of their stock dropped and they fired 2/3 of their employees.
In fact, Sun is responsible for the largest percentage of open source work- so if the company fails, we're going to see a mass stagnation in the industry. If the angel investment that runs most open source startups gets drained on a failing stock market, then open source will be effectively run by the universities again. But our industries are capitalist, not socialized, so this will not benefit our society as a whole monetarily. Since we PAY to go to college instead of getting paid, we'll be paying for technology development with tax money that will then be maintained in Asia and gotten at factory wages by international industry.
So, you should learn to wait tables. Or sew clothing, or something. Companies like Microsoft and Apple that kept the software industry here are slowly losing the business market, and that's a losing battle for both technology and the US worker. The cost of software licenses was a small tax on big industry to keep the middle class healthy-- remember that "good guy" industries like IBM are very diversified and have a major hand in defense and other industry, so they're not going to get hurt when they eliminate the American software industry- it's just another cost cut and workload outsourced.
Just keep open sourcing your code, guys. You'll be like the old people who used to make big money making televisions in factories. And if you don't think waiting tables is hard, you should try it. Read Nickel and Dimed by Barbara Ehrenreich. It's a good primer on your future market.
"Open source allows companies to focus less on s/w development (though good OSS-based companies always remain firmly involved), focus more on fostering a thriving community, and spend the majority of their efforts on the area that the proprietary companies eventually have to focus on (paid services, bundled products, etc...). The OSS companies get there first, are typically more nimble because they aren't stuck wasting resources on keeping licensing revenues high. "
bundled products? You mean proprietary software? Or more software that you are going to give away for free.
also, paid services and support typically take a lot more resources, effort, and capital that most companies starting out simply do not have (which will mean sub-standard quality for the consumer).
Licensing fees usually give the company capital for support and services. Without this available, the only companies that will be able to survive are ones that have the backing capital.
This is probably why all major open source projects are subsidized by large companies with deep pockets (open office=sun,php=zend,mysql=mysql corporation,firefox=mozilla foundation+google). These large corporations don't make their sole income from open source software.
"They have already accepted that such a model is a constantly dwindling one."
It hasn't stopped Adobe or Microsoft. Hell, even Mysql has a licensed version. It's never dwindling if you get a base of users using your software and you continue to charge for major updates..or extensions.
So the trick is to support open source, especially as it then allows the hobbyists to extend your product while still protecting your advantage, but push into areas that have a barrier against being purely commodity. It's worked for me.
Stop blaiming Open Source.
It is not the 'Open Source' of your 'open source business' that is a race to zero it is the 'business' part that is.
Truels, or Survival of the Weakest
P Amengual, R Toral
http://ifisc.uib-csic.es/publications/publication-detail.php?indice=1786
There is a clear distinction in quality. Most of the open-source stuff out there is crap, certainly following the 80% rule - 80% of everything is crap. The problem is that programming is hard work. Well, actually quality programming is hard work and crap programming is quite a bit easier.
If you are producing custom and semi-custom software you are bucking a trend that started in the 1980's. Previously, all businesses would pay for custom-written software because the very idea of a commodity program that would fulfill their needs was foreign. And for the most part, other than very primitive things, it didn't exist. All of the functions of an ordinary business needed to be replicated in some custom fashion - accounting, inventory, bill of materials, customer information, everything.
This started to change in the 1980's with boxed solutions. The problem was that these were still primitive and hard to use. Either customization or lots of training were needed.
Today, for the most part, this isn't true. You can still find some businesses operating with custom-written solutions and some expensive software systems that require lots of training and customization. But it is clear this isn't the direction of the future. Software in general is getting easier to use and requiring less and less support. Training in some specialized fields is needed but it isn't necessary for the software. An example of this is you don't need training to use accounting software but you do need training to be an accountant.
Software that relies on a support model is counting on complexity and unfriendly user interfaces. This is going to go away and the sooner the better. Folks that write such things give the rest of programmers a bad reputation.
Advertising? Maybe if you have some mass-market thing that people will put up with things like that for. Maybe. I don't see it as a path into the future. Google, whose billions are build on pushing ads on people, is not a model that forward-looking people are going to want to emulate. I can't imagine the Google model being very long lived. Advertising, no matter how targeted, isn't something people find friendly or endearing. At best it is like product placement in some movies - it is there, but you don't really notice it. Once your nose is rubbed in it, it becomes distasteful and something to avoid.
Open source is certainly a race to zero, but quality is being left by the roadside. Everyone wants something for nothing, but nobody wants to work for nothing. And nobody works hard for very long for nothing. The mark of a hobbyist is a curve where things start out great and when the going gets tough the effort expended starts to drag. Until finally what started out as a inspired labor of love ends up being hated. Look at sourceforge - lots of stuff there, lots of stuff barely finished.
The one counterpoint to this is large organizations bankrolling professional developers and turning the source out. There are lots of motives for doing this, and some of them are very good. But I seriously doubt IBM is doing any of this for the betterment of mankind. No matter how altruistic the motives may be in the beginning, it comes down to either being a real operating business or it is a hobby. Or it fails. Most of what is seen today as good quality open source tools are being bankrolled by someone with their own reasons for doing so. And they are indeed making money from things that have nothing to do with it being open source. Red Hat may be an exception here in that their revenue is coming from support and it would appear to be support alone.
If I thought that people would one day stop paying for quality and take free crap, I think I'd just hang it up. For a large percentage of people Stallman's idea of "freedoms" is meaningless because they don't have the tools to take advantage of the freedom. Or the money to pay someone to take advantage of these freedoms on their behalf. So don't be fooled, it is all about the money. I do not see the balance shifting anytime soon - free crap or expensive quality. Is there expensive crap out there? Sure, but it isn't going to last. It never does.
The only problem here is timing makes a sale. If you go from scratch to customers and say "hey, ya' want X software in 26 months? Sign here." The DotBust made a lot of businesses wary about Sales.
I'm guessing you'd want to go from proof-of-concept to a venture investor to develop the deep work just to be sure you won't get hosed by some unbelieveable glitch like the one that damn near took down Microsoft when they had to Reboot their codebase for LongHornedVista.
Then with some core tech that can be finalized in a few variant ways, then go dig up your customer and tell him "X software is only 7 months out. Sign here."
My first Journal Entry ever, in 8 years! http://slashdot.org/journal/365947/aphelion-scifi-fantasy-horror-poetry-webzine
There's no future in being a commercial developer because someone else will do the same thing, for free. Now, I can understand the positive side of this, and I will say that software now is 'better' than it ever has been.
But it has destroyed a lot of job opportunities. Someone with my level of skills could, 20 years ago, work on the next big OS or database or something, and make a living at it. Now I'm relegated to making web apps. Why? Because all of the big jobs have already been done, and there's no incentive to compete when the net value of the market is zero. The older Linux and BSD programmers made out pretty well since they got into the game early, but there's no way for a programmer to started in these areas anymore. The amount of work that goes into getting started on, say, Linux kernel development, is beyond what can be done in your spare time.
Am I lamenting the fall of proprietary software? Only indirectly. I'm more upset that there's not as many opportunities to do __interesting__ work because of open source.
In long term (hundreds of years) we will have excelent quality open source software available for almost everything, so there will be little point in reimplementing something as a commercial software. Good software does not get obsolete, if it is maintained, it can function perfectly for ever. Take TeX for example, or vi (or emacs ;), or Unix...
Undoubtedly there will always areas where commercial software will work better (e.g. areas where specification changes often and rapidly, or areas where clear accountability for the software is important), but those are exceptions.
Just because your software is open source doesn't mean that you get to sit on your duff and collect money off your paid extensions in perpituity.
True--that's a privilege reserved for Disney and the recording industry.
"Not an actor, but he plays one on TV."
shouldn't you report them to the FSF?
OSS licenses function by copyright, not patents. Some licenses explicitly forbid you from exercising patents on software so licensed.
If others produce functionally equivalent software, this is not a violation of the license on the first piece (unless it's written into the EULA - and such terms are of untested legality, and certainly don't apply to anyone who isn't a customer). From my understanding, people are producing OSS versions of commercially licensed extensions anyway.
Sadly I can't mod today.
For instance, Adobe has nothing to worry about. There's not going to be any Open Source project that can compete with Photoshop anytime soon. If the stuff you're writing is that easy to implement that every addition or extension is being copied, and is "just as good" as you say, then the issue is with the code you're writing.
The Open Source devs trying to mimic your extensions should be sitting back saying to themselves "how the hell did they do that?" and by the time they figure it out, you've already got new features that they don't.
Also, providing support seems to be the best way to monetize Open Source. They may provide similar functionality, but you can offer custom tweaks and support for a fee.
What I don't understand is why a bounty system hasn't caught on. It seems to me to be the right solution to the problem. A bounty system allows users who desire some new piece of open-source software, or an extension or modification to an existing system, to contribute money to a bounty to be paid to the first person to implement what they want. There are details -- the money has to go into escrow, for instance, and there obviously has to be some acceptance process in case what was implemented was not what was requested -- but that's the general idea.
There are a few Web sites implementing such a system, more or less, that have been around for a few years. All the ones I've looked at seem to be inactive. And I wonder, why don't they catch on?
I think a large part of the answer is that these sites haven't marketed themselves well. To get used, any such site is going to have to answer the question: why should anyone contribute? Potential contributors have to be convinced that it's worth putting a small amount of money into escrow to incrementally increase the chances that what they want will get implemented. That's hard, particularly when it seems reasonably likely that what they want will get implemented anyway. And none of the sites I've seen do a good job of making this case -- indeed, most of them don't even try.
So I'm left to wonder if a more determined effort, backed by a greater awareness of the need for good marketing, might not succeed.
Your thoughts, please.
Your god may be dead, but mine aren't!
The DotBust made a lot of businesses wary about Sales.
Wary about sales? Sales is the MOST IMPORTANT part of a s/w business...of ANY business. If you are wary about sales, then make sure you work for someone who isn't.
But the companies that survived the DotBust weren't those who had good ideas. They were the ones who had ideas that couldn't sell, or who had poor business plans.
Those that had a proper business approach might have found sales pipelines slowed or dried up, but they were paid for the work they did (including profits). So at worst they walked away from a dead market with a small amount of dough (profits!) in their pockets.
I'm guessing you'd want to go from proof-of-concept to a venture investor to develop the deep work just to be sure you won't get hosed by some unbelieveable glitch like the one that damn near took down Microsoft when they had to Reboot their codebase for LongHornedVista.
Let'set something clear here: in the history of Microsoft, at no point did they find themselves deep in a hole. They have always had the funds and/or signed contracts for the work that they went off a did. Sometimes they did work on a new product that they funded themselves, but that was well after they had massive cash-positive flows to easily handle the expenditure (cash-negative) for that new development.
They did not go out and develop MS-DOS 1.0, then go looking for a customer. The reason that IBM and others have an intertwined history with MS is that they funded MS's early development efforts.
Don't let hysteria and hyperbole ("DotBust") make you write off an entire industry. The IT world went through a pain of hurt because they (and their investors) took their eyes off business and economic FUNDAMENTALS. Those who understand business didn't get caught up in all that (well, I know that some very savvy business folks took advantage of the situation...but they also realized that it was to be a sort lived situation before a full collapse would occur).
Then with some core tech that can be finalized in a few variant ways, then go dig up your customer and tell him "X software is only 7 months out. Sign here."
That still involves doing at least some preliminary work before getting paid. That is usually how a new product comes to market: initial investors (the coders themselves, or the idea people, or the company developing the new product) develops a prototype and begins pitching that. Only when initial early adopters show a sincere interest (e.g. sign a contract) does the hard investment in the product development happen.
It's a simple matter of complex programming.
Free InfoValue is too important to pay for.
Software is a subset of InfoValue. But just free raw knowledge itself is accumulating so that Newbies with initiative start their first question at a higher level, which tends to please the experts who prefer giving higher grade answers.
My first Journal Entry ever, in 8 years! http://slashdot.org/journal/365947/aphelion-scifi-fantasy-horror-poetry-webzine
gcc is absolutely the best compiler in existence, for a pretty broad set of requirements. Or, putting it the other way around, you'd have to be working in a pretty specific niche for any C/C++ compiler to be better than gcc.
Likewise emacs.
Beyond that, if your project requirements are significantly affected by the ability to view, modify, and redistribute a program's source code, Free Software (and often OSS) "win" pretty much by definition.
"Not an actor, but he plays one on TV."
Open source is competing with closed source in the marketplace of marketplaces. Don't bitch about it. Make your marketplace better...if you can...
Great reply.
I prefer to exclude MS because they are the Elephant Outlier that can basically never be duplicated again for a long time.
We actually experienced the downside of Sales at work a couple years ago. A company was pitching a thin-server solution for the commercial package we run. It turned out the company was unable to support it at a deep-intrinsic-flaw level, and retired it. The second time around we went with a more MS-centric solution.
My first Journal Entry ever, in 8 years! http://slashdot.org/journal/365947/aphelion-scifi-fantasy-horror-poetry-webzine
I wish to re frame the issue a bit. Usually the question of the programmer making a living with free software relates to market conditions and open source issues. But we will enter a whole new space in relation to this issue. Yes, some private software will always be profitable. However the real wolf in the closet will be computer generated software or Genetic programming as AI is sometimes called. As human programmers advance and write more and better programs you can bet your last penny that machines will be deployed that will beat the socks of of anything we can create. Programmers will function more as glitch correctors than in the traditional mode of work.
That means that a lot of current computer professionals will be kicked to the curb as obsolete. Yet others will have just the right combination of training to demand very high wages.Companies will compete more in the way that Japanese car companies compete. The companies with the best (most exotic) machines will be able to create the best programs and therefore will make superior returns on their investments.
We are now in the stone ages of programming.The real universe of computing is about to dawn upon us. The shock of it all may be hard to take.
From what I've observed over the years, OSS works great on the server/enterprise side, where there is significant money to be made in support services. On the other hand, end-users don't buy support contracts, leaving almost no money to be made there to pay developers, so closed source wins.
Or that making a highly usable product requires much, much more effort and is generally not considered to be fun. (And thus requires people to be paid to do it.) This is the reason that I think Linux et al have thrived in the server area. IT folks who set up servers care more about getting the job done that having a nice interface. This is also why Linux on the desktop continues to be just out of reach. (That and people already know Windows and have no desire to learn anything.)
Apple makes software that is very easy to use for anyone, and that is why they are a "powerhouse". They have to in order to get people over the mental barrier to using something new, and even then they are still tiny in desktops.
I think this is why it's taken so long to get a viable MS Office clone. Nothing it does is complicated or hard. It's all just really, really boring development that people only really work on if they are paid. It's over 90% GUI and a tiny part actual computer science.
I don't know, but it works for me.
If you understand market forces then you'll understand why both will always co-exist, in a pretty divisive way. By divisive, I mean some stuff will be open source, some will not.
In cases when the open source alternative will be as good as the commercial alternative, open source will ultimately win. In the case of niche software products where the few FOSS efforts would not be sufficient, commercial alternatives will emerge to fill the demand gap. That's how in works in theory. That's why broad appeal apps have great FOSS versions, whereas commercial apps thrive in specific niches. There's no program more expensive than very special purpose professional programs. That's how the cake is being shared.
You just got troll'd!
I do think that open source softwate is making it more difficult to make money from commercial software. People are basically giving away their time and this also cuts into commercial developers as well. After all, programmers have to eat, and people need to be paid for their work in this kind of economy. Open Source projects still can try to use feature tiers, donations, manuals, support and associated add ons. On the other hand the commercial software development paradigm partly has itself to blame, in not allowing enough freedom to its users. Weve seen polarisation between two extremes, on one end, completely closed, rigid, closed source, high cost software, and on the other end open source, and nothing in the middle. A compromise might have worked better in many cases consisting of 1) source available with commercial software under commercial licence 2) commercial developers willing to accept improvments from users 3) a tiered pricing scheme, giving very low cost licences to hobbyists and more expensive licences to corporations and commercial users, or pricing based on a customers revenue or incoming, etc. This combines the best aspects of commercial and open source, the openness of open source while requiring those who use the software, to help pay for its development, those who can afford to.
bundled products? You mean proprietary software
Yes, quite possibly, though it would be much better if that bundled other thing was a SCARCE resource (proprietary software, hardware, t-shirts, online services, seating at an event, etc...). Of course, nothing says that it has to be my business that makes the other stuff.
also, paid services and support typically take a lot more resources, effort, and capital that most companies starting out simply do not have
So how exactly did Accenture, Anderson, EDS, RedHat and others get started? They started by having a single developer take care of the initial customers. As they grew their customer base (i.e. as the revenues grew), they brought in more people. The founders often went with very little (or without) for the first months/years in order to keep the payroll low during initial growth. Don't like it?
There are also many companies (most consulting firms) that started off by first getting a big sale on a consulting gig prior to doing any development. Find that first customer to pay for development of that product at cost (often by taking a portion of equity in the company).
Licensing fees usually give the company capital for support and services.
Nonesense. Most s/w companies couldn't survive the first year without some type of revenue. You can't sell licenses without having a product to deploy.
MOST startups are either two guys living off their parents while they develop that initial product, or they are SMART business people that sell their services to get started. Three of the four startups I have worked for were customized software projects that the founders negotiated rights to the source code (or at least shared ownership with the initial customer).
This is probably why all major open source projects are subsidized by large companies with deep pockets (open office=sun,php=zend,mysql=mysql corporation,firefox=mozilla foundation+google).
Notice that EVERY SINGLE product you listed above started as a small open source project not tied to any company. The big companies you mention (sun, google) bought/partnered with the OSS project in order to BUNDLE the free with their own scarce offerings. In the case of zend and mysql (now SUN), they are companies that took free and leverages other SCARCE resources ("official" releases, support, services, etc...)
These large corporations don't make their sole income from open source software.
Correct. And they didn't make their money off selling free software. They leveraged the free to generate revenue.
It hasn't stopped Adobe or Microsoft.
Okay, when you get your startup to the point where you can compare yourself to being at least 1% of these two giants, let's talk about business models.
If you are trying to build a business based on their current models, you have lost me completely.
This is not the model that Microsoft had when they got started (they landed CONTRACTS with larger vendors TO WRITE SOFTWARE).
This is not the model that Apple started with (they are a HARDWARE VENDOR that have a lock on the entire chain (h/w, o/s, most apps)). Note that Apple actually does invest in the OSS model too (OSX being a *nix, they leverage GNU tools and support OSS project such as WebKit).
Hell, even Mysql has a licensed version. It's never dwindling if you get a base of users using your software and you continue to charge for major updates..or extensions.
Yes, MySQL's model is an interesting one. However they didn't start out from zero as this. They have evolved, initially being a SERVICES company that supported and customized a FREE software product. They turned to a dual licensing model later in their lifetime. What they do realize is that most companies want SUPPORT for any production system, so those com
It's a simple matter of complex programming.
Selling software bits, is an eroding industry. More and more software is becoming commodities. This is not a bad thing at all! One needs to think more down the lines of PROVING A SERVICE, using all that free and open software. This is what virtually all major profit web based businesses are doing, and have been doing from the start. Amazon, uses open source to provide a service. Google, same, Yahoo facebook, myspace and on and on. SaaS, Software as a Service is the furture. Selling software will soon only be left to the very elite, complex or specialized programs. Intuit, Quickbooks. 3dsmax 3d rendering software. Adobe products. But, if you are in the open source world and plan to make a long term living selling open software, well good luck! Open source software was never intended to be made to be sold, it was intended to be software anyone could use to create new, and interesting markets in the 'services' field, using f/oss software. Or simply just writing software to make an existing business more efficient.
If you want them, buy a games station.
Do you mean a console? How does one get free software onto one of those?
I don't think people buy from us because of our huge library of amazing code -- I think they buy from us because we can support it.
I work at a Linux vendor these days (Wind River), and the primary value I see isn't the code itself, but the engineering team that developed it. People hire us to do stuff to this code base because we can do it better and cheaper than they could -- because we already know the code very well.
This in turn lets us write new code -- which, of course, tends to end up as open source. But if we have the guy who wrote it, and several people who have studied the code and know it well, we still have a large advantage in working with it.
Obviously, it's way more complicated than that, and I don't follow the rest -- I'm an engineer, not a manager. :)
My blog: http://www.seebs.net/log/ --- My iPhone/iPad app: http://www.seebs.net/seebsfrac/
You need to understand that no matter whether you sell software, real estate, potatoes, or cleaning services what you essentially sell is expertise and time, ie work.
If you try to sell prepackaged software, what you do is to do some work and then to store this work into some software code which you then sell to customers. But once the first copy is sold, it's very easy for this work to be duplicated or immitated. So, it doesn't really make much sense to sell prepackaged software.
Now, what if you sold expertise and time directly? Just say that your hourly rate is such and such and that your specialty is such and such... Then no one could duplicate your work, and you could get paid while the client's order is being developed. This, bespoke software or providing services related to software (support etc), sounds like it solves the duplication problem discussed above.
The only problem with bespoke software and related services is that it requires more effort on your part to scale up. It is for this reason that people tried to prepackage work (such as software, or music, movies, books, etc) and sell it on a disc, and in this way they managed to scale up to millions of customers, but they quickly found out that their work is so easily duplicated that they had to spend too much on anti-duplication enforcement mechanisms (such as DRM, copyrights, patents, trade marks, trade secrets, obfuscation, state-granted monopolies, etc). The enforcement costs make this "prepackaged work" business model unsustainable, especially when the customers have access to advanced copying technology. It makes no sense to try to control information which wants to be free.
There is, however, a way to make bespoke software and services scale up: Instead of prepackaging the software, you should set up as a bespoke software/services provider and prepackage the services.
Identify a large number of potential clients who have similar needs, then develop a business flowchart for a prepackaged service to suit their needs. To be successful, you must do this in a finegrained scale and combine several small prepackaged services into larger packages.
After you do this, you can then just cooperate with freelancers (or hire employees if you prefer, but I believe that freelancing works best) and train them to provide the prepackaged services. When this system is put in place, and if you have successfully identified the needed services and the right granularity, the system can run almost automatically with little modifications, unless some event causes the needs of the clients to change dramatically.
In short, instead of putting software on a disc and selling copies of it (which has the disadvantage, for you, of being unable to control further copying, reverse engineering, or reimplementation), and instead of selling general bespoke services (which has the disadvantage of unpredictability and difficulty in scaling up), put services into a service plan and sell the plan, effectivelly productising the service to allow economies of scale.
The caveat: it is extremely difficult to properly identify the real needs of your potential clients in the right granularity, and a significant percentage of clients will be turned off unless you also continue providing real bespoke services/software. To be successful with such a model, you must effectivelly become a marketing organisation and employ real marketing experts who know what marketing is about (tip: it isn't about advertising or brainwashing). While in the prepackaged software model the marketing ends up becoming mainly the customer's responsibility (in practice the business throws around discs with software hoping that someone will find them useful enough to buy them), in the prepackaged/productised bespoke services model you must do all the marketing yourself. But once you do your marketing research, the business can run on auto-mode as long as the needs of the clients don't change significantly (which unfortunately do!).
In short: make everything open source and free, identify some common needs of your clients, and offer productised service plans targeting these needs, and make sure the identification and targeting of said needs is correct.
> Something that was worth $5K last year is suddenly
> worth $0 because the free version is just as good
> as the paid.
So move to the Service model - sell your high-quality/high-value support services.
Most Open Source software - by the very fact that the source code is freely published on the Internet - follows the service model by selling support services.
If you are very good at supporting your software, and at a commercially reasonable price, then you won't need to worry about the competition walking in and taking your customers away from you - because they won't be able to.
I think this is why it's taken so long to get a viable MS Office clone. Nothing it does is complicated or hard.
I'd like to introduce you to Office 2007.
Insanity: voting in the same two parties over and over again and expecting different results
"Nonesense. Most s/w companies couldn't survive the first year without some type of revenue. You can't sell licenses without having a product to deploy."
Did you not understand that when I talked about selling licenses..it was to software that has already been developed and ready for sale?
"MOST startups are either two guys living off their parents while they develop that initial product, or they are SMART business people that sell their services to get started. Three of the four startups I have worked for were customized software projects that the founders negotiated rights to the source code (or at least shared ownership with the initial customer). "
You forgot about the third that get bank-loans to finance their ideas. The fourth are people that run a software-only business while working a full-time job (ex: http://www.joelonsoftware.com./
"Notice that EVERY SINGLE product you listed above started as a small open source project not tied to any company."
My point was that you may be able to start out small, but because of the nature of open source, you will need a larger company to survive (one that does not sell software only). I see you couldn't provide an example of a large open source project that was not backed by a large company/entity. I don't think one exists.
"Okay, when you get your startup to the point where you can compare yourself to being at least 1% of these two giants, let's talk about business models."
to see my point, just compare some OSS companies (not ones backed by larger corporations) and ones that sell proprietary software with licenses. OSS companies will always be limited because service and support requires more man-power.
"If you are trying to build a business based on their current models, you have lost me completely."
you mean selling software and charging for the licensing fees? thousands of companies do it every day..successfully. In most companies, money is a factor, but time is even more important. Can software X save the company time? Open source apps usually require lots of time to learn, install, configure, and debug..which equals more time spent. Most business owners, if they could, would rather just pay to get something that works right out of the box.
"MySQL (the company) lost their way from the OSS community. However, the purchase by Sun is likely going to bring them back inline with the initial view of MySQL (the project)."
It's closer to: mysql (the company) couldn't survive on services alone and had to start selling licenses. Now that sun owns mysql (the project), they don't have to sell licenses anymore because they have other, non related sources of income that are subsidizing it.
Even though this is the case, I don't think sun will just suddenly stop selling licenses to mysql. It's guaranteed revenue.
If appropriate, tie your software to a piece of custom hardware.
Contribute to civilization: ari.aynrand.org/donate
It's c'est la vie. Sorry for being a grammar nazi.
You're right, but people picked you apart as your first line was too broad. Try this instead:
There is no sustainable market for selling a commodity with a zero marginal cost of production.
When the marginal (ie. incremental) cost per unit is zero, this directly implies that no proprietary resources or secret sauce were required in its production, which in turn implies that effectively anyone can produce the commodity. Thus, while there is always a market initially for something new, there can be no sustainable market for an item with a zero marginal cost since it will eventually spread into public production. The answer for producers isn't to panic, but just to keep designing new items.
The same will apply to physical goods one day when they can be assembled with atomic precision from the elements around us.
"The question of whether machines can think is no more interesting than [] whether submarines can swim" - Dijkstra
I always thought the real money in the open source business was either/or/both innovation and support. The company I work for spends quite a bit of money on open source software because they are in effect buying less expensive support(compared to in-house) and access to experts who really understand the software. In most cases, the software itself can be obtained free elsewhere.
An infinite singularity in fact!
It's the value you create making the technology work for someone. It's called "consulting" or "packaging" a "product" for sale. A "gizmo" economy where the "computer" is bundled with the "software" in custom configurations.
It's starting to happen now. Look at Apple. Almost everything they sell is a hardware product with software to enhance it! They could have taken over when Microsoft humped the bump with Vista by selling a software only version of MacOSX for generic X86-64 boxes. Instead they keep making custom hardware. Heck they are even making their own chips now! Yum, chips...
Hey, it could get worse than zero by having to pay people to use your software!!!
Every product or service is in a race towards the minimum price at which it can be physically produced and delivered (price including any available manpower and start-up capital needed).
Every stand-alone software product only has value until its function and value can be reproduced or supplanted (by patent expiration, stolen trade secrets, the time it takes to reinvent or develop from scratch, the time it takes to equal the original products reputation, the time it takes competitors to make/build/package your open source, etc.) To have a non-zero revenue window, you need to make sure the time you offer something unique is non-zero.
Of course, humans are stupid, and this allows you to use their lack of information to create some additional value. If potential customers think your brand name implies something better than the identical bits under some other name (e.g. Coke vs. generic cola), then you might be able to maintain a non-zero pricing.
IMHO. YMMV.
There is nothing wrong "...a Race to Zero..." This is just the "nature of the beast" for open source software. I feel the money is not in the software, it is in the service. Just look at Red Hat.
Most of the posters here have no clue the difference between open source, and free software. To sum up:
Free software = GPL or other free as in freedom license.
Open Source = customer has right to source and right to modify it. Does not include redistribution rights.
Most of the posters here are talking about free software. And yes, free software is a tough way to make a living without using services as a method of generating revenues. That said, how do you enter an established market against huge players? Hmm - free software can open those doors.
Open source, on the other hand, does not preclude the exact same revenue as a classic proprietary software vendor.
-- $G
Yes, if you're in the business of software to do X, then making a free version of software to do X is stupid because if you're successful then eventually you will be out of business, sorry.
The magic of open source / cooperative development is that you have multiple people who share a common problem who gain great leverage by working together to produce something that all can use to solve that problem.
So farmers get together and write farming software, bankers get together and write banking software, etc., and this makes huge sense because the end result only enhances their businesses.
But software makers making free software is, and always has been, a fundamentally stupid business model, at least for those whose business plan does not clearly explain how they avoid this obvious trap, or who plan to "make it up in volume".
You need to be making your money off of something *other* than the free software you produce. Business plans based on selling support, customization, proprietary extensions, and the like are indeed ultimately doomed to failure as there's nothing stopping other people who NEED those things from doing it themselves better, faster, and cheaper than you can.
Open Source / Free software is a wonderful thing for society, it's just not so hot for the software "industry".
If you find yourself in this position, then my recommendation is to move out of the free-software "business" and move up into applications of that software, since that's where there will still be problems people are willing to pay to solve.
G.
Adobe also used to be worthwhile. What's the last version of Photoshop that was actually an improvement on the previous version? 5? 4? Now they're just churning out the same old software with a few new phone-home features and a lot of extra bloat. Their model is the same a Microsoft, except that they're in a small enough niche that it's working for them.
F/OSS isn't a threat to professional software developers. They'll have plenty of work doing the customization and custom programming needed by the companies that use software in their business. The place I work employs 30 full-time developers just at the office I'm at to develop software for in-house use. We make extensive use of F/OSS for the parts that aren't specific to our business, it's cheaper than commercial software and we're legally allowed to change the software to fix bugs and add things we need. That's a lot better than say Oracle, where the turnaround time on bugs is somewhere the high side of 50 weeks for the 1 bug in 10 they actually fix.
Now, software development companies have a problem here. F/OSS is churning out for free what they want to charge people for. A maker I know runs into this in other areas. He's got a small CNC machine shop, a professional-grade print shop, a professional-quality photography setup, and his latest acquisition is a laser-engraving rig. He runs into very hostile reactions from "professional" businesses built around buying those expensive tools/machines and giving customers access to them (spreading the cost over multiple customers in the process), who are having big problems now that their tools aren't that expensive and hobbyists and amateurs can afford them. Those amateurs often do better work than the "professionals", because they're in it for pride or for fun, not just the money. He summed up the "professional" reaction thus: "But they can't own tool! Ogg is only one to own tool!".
I'm just finishing up a project based on a big commercial product. Portions are Open Source, once you pay the initial fee, which ain't small.
The product is so poorly written that it completely boggles my mind. If I weren't under NDA, I could keep the Daily WTF loaded up for weeks. And this is just the portions that they're willing to let me see.
Out of pure spite, next time I have a project that's in this general domain, I'm doing it using FOSS frameworks, and releasing it as FOSS. Fuck 'em. If they're going to sell crap, they don't deserve to be a virtual monopoly in the business. This stuff isn't rocket science...
Eloi, Eloi, lema sabachtani?
www.fogbound.net
Or if you're the software engineer who programs the automated combine harvester.
This is the whole point of patents. Patent the core functionality of your next extension and you'll have protection for x years.
You still have your brand of your plugins. If you have a good product people will come back just because they know you. trying out new op source pluging vosts them time = money, and quality might not be the same.
I think that people will pay for a software product even if there are free solutions out there when they don't want to worry about "who's going to help me if something goes wrong with the product or if i need some help/improvements?". The simple fact that two software applications do the same thing (more or less) will not be a 100% decision maker for a real business.
Our company develops custom software for different industries. One of our customers bought a software solution from us a couple of years ago, when we didn't have a support department. A couple of months ago we were in the process of signing a contract with a different customer, for the same product (different, improved version - this is not important). One of the managers was an "ex-old customer manager" who knew that the product was good, but hi knew they didn't have any support at that time from our part. So, the fact that at this moment we do have a support department (and we could offer them a support contract), gave us the opportunity to sign the deal with the new customer.
There has been a discussion a couple of weeks ago here on /. about Google apps and commercial ones. I think that we you (as a business) want to include a software solution as part of a business process, you really want to think more about what improvements you can achieve with the product, what kind of support you get, what's the life cycle of the product (do you get new versions, improvements, etc.) instead of just thinking about the money spent (if any) on product acquisition.
No, Open Source software is not a race to zero.
But it is driving the price of well known and well used software down. And that's a good thing. Trust me.
Let say your company has a good product, such as an Exchange alternative that's very inexpensive... But now there are other great open source products out there that can do the same thing: Zimbra and Zarafa are 2 that come to mind. These two products start to eat into your company's market. Well, what are you going to do? I don't think you can sit back and ask "Are we doing it all wrong?" No. It's not the fault of open source developers to produce good code and give it away for free/cheap.
But what can a company do? Either your company needs to make your product better, (More features, less bugs, more speed, smaller footprint, etc) or move on to a new project.
Does that seem harsh? It shouldn't. If you're in a business which breeds competition (such as the software business) then you must compete for your market share. Otherwise, move on to something nobody else is doing, or at least something nobody else is doing well.
--Pathway
FOSS software isn't designed to be a product. It's something that can be bundled with a product to make it more valuable.
There are other economic models of FOSS, but the one that it looks as if you are closest to is: "We wrote the software, we understand it. We support it. Support isn't free." For this to work your support had better be a lot better than what one gets by asking for support online.
Note that not all models work for all products. If something is designed to be so simple to use that no support should be needed, then selling support isn't a good model. And selling upgrades only works if you can upgrade faster than others can....and you can convince people that the upgrade is worth what you're trying to charge for it. This isn't necessarily easy.
Finding the right business model to support a FOSS company is quite difficult. Many have succeeded, but it's also true that many have failed. (But then many who tried to compete in Apple's market or Microsoft's market have also failed.)
I don't know your product, so I can't offer detailed advice. Look for how others in similar situations solved the problem...if you can find any.
I think we've pushed this "anyone can grow up to be president" thing too far.
When people stopped using the 8080 chip, my software business went away. After learning several languages that disappeared in a few years, I decided to leave the swamp behind and build on rock: record stores.
You are using a wrong business model. You either have to close source it completely and fight against others competitors (including opensource) or make it totally open and make money on service, support or something else, like Sun Solaris/Java, Asterisks and many others. Opensource project asks community to contribute by default. Make use of this big power instead of fighting against it.
I earned 25K just 5 years ago by building an rich-client e-learning system that could handle ISDN for transferring video lectures by using sophisticated preloading mechanisims. This was just a year before DSL got critical mass and made it 65% superfluos, and a few years before codecs had improved so far that bandwidth was halved. The system I built would now maybe be worth half of that, and only if it came with a server-side admin interface.
A year ago I built a totally internationalised (content and interface) custom vertical-market CRM with n-dimensional user-rights management and optimised access controll using a web framework. I made about 8K on that. As soon as Nooku is final and Joomla 1.6 comes out with full ACL ( and if they don't screw up ) that will be worth about a half to a third of the original cost. I expect this to happen in the first two thirds of 2009.
To fill you in on the situation: This is normal.
Software, aka the 'virtual world', is an area were the - by todays standards for real-life humanity haibrained - concept of marxsisim works a-ok, as the cost to double what I posses if you desire it too is factually nil. This is the reason that shrinkwrap software is dead as a doornail in mid-term, unless there's a law that you have to use proprietary software.
Where is Borland and JBuilder and the accompaning business model? Disintegrated in a purple logic cloud.
I remember Borland JBuilder Enterprise costing bizarly outlandish 4-digit sums of money 8 years ago. Now you can download IDEs that are far better for free. And even the best software companies can't afford to ask more money than a day or two of an IT professional setting up and configging an OSS tool would cost.
Maya 2.x used to cost upwards of 20K, now you can download Blender for free and it kicks older versions on Maya up and down the street. And the last thing seperating it from todays prime-time players is Renderman compliance and a few odd features strewn about. A whole sub-set of the multimedia tool industry is about to go belly up and/or radically change just because of 6 handfulls of enthusiasts based in Amsterdam patiently working away on their passion for the last decade.
FOSS is slowly creeping from general stuff - that it actually allready is superiour in - into more vertical markets such as gaming, grafics & multimedia, rich clients and Business IT / ERP. It let's SAP and MS execs breathe shallower just thinking about it, but there is no way it be stopped. Once hardware has become universally ubiquious, the speed of this process will grow by orders of magnitude. I expect to see the total death of shrinkwrap software and it's concepts in my lifetime and while I'm still earning money as an IT professional.
Bottom line:
We are helping humanity here. And we will have to adapt to the fact that we have to develop the right stuff only once, as it then can be copied and used freely throughout the world ever after. This is Cyberpunk at its best. It's called Free Open Source Software and its taking the IT-world by storm as we speak.
Get with the programm.
My 2 cents.
We suffer more in our imagination than in reality. - Seneca
You could ... contribute to an interesting OSS project...
What's the biggest value to an average end user of most open source? It's not the source code. It's not that open source is more innovative or more secure (which is questionable and certainly not consistent across the majority of projects). It's the lower cost of open source. Whenever a company, any company, primarily competes on cost it's product is going to be commoditized. When that company's product is open source it's natural that open source equivalents to the company's proprietary extensions will be created unless the technology is just too complicated.
Of course, this general problem certainly isn't limited to open source or even software. Any company is going to be attacked from below (see the Innovator's Dilemma). Your company needs to find a way to constantly climb the value chain. If it doesn't it'll go out of business.
A business model that relies on "support" for revenue actually creates a disincentive to produce the "ideal" piece of software (i.e. powerful, intuitive, easy to use, stable).
-- "I never gave these stories much credence." - HAL 9000
Because every time I talk about things like this happening as a result of the FLOSS, I am told it never happens.
There is no "-1 offended" or "-1 you don't agree with me" mod options for a reason.
As long as hardware is improving exponentially there is an important role for software as a product. Just think of the computer gaming industry as an example. There are many new opportunities for innovation as hardware improves dramatically. And of course, as software becomes a bigger and bigger piece of each "hardware" product, programming as a profession is unlikely to die out. More likely everyone becomes a programmer to some extent.
The key to any successful business is the delivery of value to the market. Regardless of what you develop and regardless of feature content, if the delivery of value is not perceived in your market then you will lose market share and possibly go out of business. On top of that, you have to be lucky, in that the economy must be sufficiently healthy to support your business activity. The value principle applies not just to your external customers, but also to your relationship with your employer. If you are not perceived as delivering value in an otherwise healthy company then you will likely have to seek employment elsewhere. Keep your software skills sharp, but if you lose sight of the value proposition then you will likely get punished by the market. Regards, Art
Would it be mean to point out that MacOSX is a bunch of OSS software supporting a slim proprietary GUI and a few APIs?
It's been a long time.
A while back some guys derided open source because it was killing their product. Actually, it wasn't killing their product it was just changing the business market.
What the bozo at that company couldn't understand was that the problem lay with them, not with open source.
They had a product where open source competed directly. They felt that the open source version was so close to theirs that it was taking away their revenues because people were opting for the open source instead of their product.
What this means is that they weren't adjusting fast enough to create products that were worth choosing the paid version. This is the same thing. These guys won't adjust fast enough and produce fast enough to actually keep ahead of what open source is able to do.
What does this really mean? It means that unless commercial product developers get off their lazy asses and build faster and better tools their competition is going to catch up. This is the same for everyone everywhere, not just them, and certainly not just the company related in this story.
It means that commercial and open source products will gain parity sooner or later, hopefully sooner and we'll see that the level head prevails. The level head is the one that chooses the best product for the price. That means that open source (once parity is attained) will be the better choice.
It also means that we will be able to get rid of the likes of predatory companies such as Microsoft, sooner or later. The sooner the better. On top of getting rid of Microsoft we'll have better products than they can produce.
I hope Microsoft is paying attention here. Open source will overcome them sooner or later. If it takes another 20 years then so be it. But it will happen.
Microsoft, get rid of the draconian DRM from the heart of your OS, stop accusing everyone of being a thief, cooperate with open standards and stop trying to usurp them with your closed standards in order to lock your customers into different products. Then, maybe you'll have a chance in the long run.
Business case studies have shown that no company has held top spot for 2 consecutive decades running. Microsoft has. Microsoft is trying for a third. It won't hold. This is the start of the decline. As we understand that their "added" complexity (unnecessarily added) is reduced to easy reproduction through open source (concepts they intentional made far excessive in complexity is sifted through and made easier for the average person) we will be able to overcome their lock in models and that will send Microsoft on a slide. They'll always be there, just as IBM is there but they'll never again be able to hold everyone in a choke hold forcing them to use their product.
You can lead a man with reason but you can't make him think.
MS Office labours on because of VBA, nothing else. Apart from fear.
Sory, no. MS Office is a much more polished product that Open Office. What I like about OO (I use it a lot) is the drawing tool. VERY handy. But MSWord and Excel are simply better than the OO equivalents. Period.
GIMP pwns Photoshop unless you NEED $1,000 worth of "product".
WTF? You're an idiot, or never had to work in CMYK or do UCR or significant retouch work.
Dreamweaver doesn't have an sftp client. Shit.
SO WHAT? You design in DW or Contribute locally, test it out on the dev or test server. Then you use an SFTP client to upload the deliverables. Done. You're a fucking moron. No go back and play in your mommy's basement.
RS
Shoes for Industry. Shoes for the Dead.
I'm not in software, but I am operating a small publishing company, and I'm about to undertake a project that leads into similar issues to what you're facing.
In order to increase my revenue streams, I'm about to start a line of public domain reprints of mostly-out of print books. Now, this leads to a similar question to what you're looking at - if this book is available on Project Gutenberg (P.G.) for free (and it is - that's my source for the texts), then why should any customer in his/her right mind drop down $20-30 for my product?
And that's where added value comes in.
If you just do the basics, then yes, it is a "race to zero." If all I do is reproduce the text from P.G., then a customer has no reason whatsoever to choose my version over the P.G. version.
However, I do things that add value. I commission a new introduction to the book, for example. I redo the typesetting so that it looks really nice, I give it a nice cover. That way, when the customer is making up his/her mind, they're not just getting the text for their $20-30 - they're getting a nice, easy-to-read volume for their library with extra stuff that you can't get online.
It seems to me that the same solution applies to just about any product in any business where there is competition...do something with your product that adds value that a competitor doesn't offer.
Robert B. Marks
Author, Demonsbane in Diablo Archive
I couldn't agree with you more.
And on a side note:
I added 5 new linux users this week. That's a wonderful accomplishment. These are true users not those that swap Windows in and out.
Their reasons are varied:
1) They don't need or use Windows programs and the linux versions are very good and exceptionally capable. They understand that using pirated software hurts open source.
2) They want to stay free of malware and what they do to get in trouble isn't eliminated, it just eliminates the threat as there's no more Windows to infect.
3) To them it makes sense to us Linux as it does everything they want with the exception of a few things that they can rise above.
4) Computers that ran Win98 would have difficulty under XP and would be unbearable under Vista can run Linux easily with the power and features that exceed Vista. They can do this without the need to pirate Win2k or staying with the POS that Win98 is.
I applaud them and I hope that more people can turn people on to Linux. I hope this for many reasons, not the least of which is to combat piracy. See, there's no need to steal software under Linux as most, if not all, of it is free.
You can lead a man with reason but you can't make him think.
They can give their memory away for free. That's not dumping.
Dumping is selling below the cost to manufacture in order to achieve or increase market share.
If I make memory with the intent of giving it away in the first place that's not dumping either.
And even dumping isn't necessarily illegal. Apple dumps iTunes (the program on us) to make it easier for you to use their other products. You might argue that it is a bundling of their software with the iPod/iPhone but you'd be wrong. The reason is that the use of iTunes is not limited to those that own an iPod/iPhone.
There are many media player applications that are given away by big companies for free, not excluding WMP. What these guys hope is that down the road you will be familiar enough with their offering that when the time comes for you to make other purchases such as movies and music you'll do it through them.
The dumping of memory is a bad example as it has it's roots in the Asian companies dumping it in the American markets in an effort to destroy the failing domestic memory market. Their goal back then was to kill the American businesses.
Software is global and easily reproducible and easily imitated. So, technically it's not really possible to dump software on the market as it isn't a physical entity.
You can lead a man with reason but you can't make him think.
take oscommerce. there are already zillions of modules out there, for every kind of task you can imagine to extend its functions, leave aside itself being a full fledged estore software.
but, leave aside axing business, this is actually creating a lot more business.
no 2 businesses are exactly the same. as a developer who works on commercial oscommerce mod and support, you cant imagine what kind of modifications businesses may ask to get done. you'd say 2 businesses were exactly the same if you check out their composition, but, one comes and wants something done, and the other wants same thing done, but a slight modification, which is very important to them. not only that but all businesses are trying to modify and change their offerings to do better business. or, hell, even the integrations in between different estores performing different functions (wholesale outlet, retail outlet, need to maintain different branding) can create huge projects.
of course, estores is an area that is open to many modification. it may not reflect as the same in each and every kind of software application field.
but, even if modding isnt, support is something that can never go away. when businesses need support, they need it fast, they need it good. any business doing acceptable levels of profits will be requiring decent support from a professional conduct company.
Read radical news here
That's how the free market is supposed to work: roughly, in an efficient market, profit goes to zero on a particular product over time. Since, after you have recovered your salary, you don't need to pay to produce additional copies of the software, it stands to reason that you shouldn't earn any money from it either. Open source is simply a mechanism; if we didn't have open source, you'd be complaining about legal Chinese cloning.
And that's no different for most other products. How much money do you think the manufacturer of a $30 Chinese DVD player is making on each unit?
You can avoid this only by getting a monopoly. For open source projects, there are some "natural monopolies": your company has a big advantage in custom programming, teaching, and consulting related to the project. Those should be your real products.
The problem isn't OSS, the real threat is the abuse of patents. When you can no longer create anything without running into a patent claim, that becomes a much bigger problem then the "race to zero". If things continue the way they are what are you even going to be able to legally create in 25 years? When all future business is going to be done over the web how much will it suck when every way in which you can interact with your customer has a fucking patent associated with it??
There are Two serious threats to the future of selling software. 1) Patents and 2) an Apple Iphone style market where you are severely artificially limited in what you can sell.
If you wanna get rich, you know that payback is a bitch
As far as I can tell your best option would be:
1. release your product under GPL (note GPL doesn't imply no money exchange)
2. Watch closely OSS competition "improving" your product, integrate changes while releasing your product with your own "patches" to clients. now you get both of both worlds - your level of innovation, edge over competition and income.
3. Sell integration services: every customer runs some unique combination of software selling services to help them integrate your solution with those products is the key. (you can safely release result as GPL product later)
4. Sell your expertise (consulting)/support and help your customers with configuration and maintenance.
yes, you won't be able to sell software.
But you will be able to sell your programming skills because someone has to write the open source code.
If a company needs a feature added then they will pay someone to write that feature.
If a company needs a piece of software adapted to their needs it will have to pay someone to do that.
Most of the main people working on open source projects are getting getting paid to do it because some company (intel,Sun, IBM, microsoft, etc.) has some need for the software.
...and that is all I have to say about that.
http://jessta.id.au
Should there be a guild of programmers that is given grants by governments and industry to work on certain projects?
That is how the major open source projects are already funded!
As others have pointed out, though, it's nonsensical to say "the people who write the code get paid very little - if at all". Open source programmers are paid as much, and in some cases far more, than proprietary coders. They have mortgages, kids to put through college, like everyone else.
you had me at #!
Okay, english is my second language so I'll hope people will be able to follow. It will never be a race to "zero". Everything in life has a price, either in work time or in money. Yet, if we talk about a software company as a business model (selling software), then YES your software will eventually sell for "nothing". What you will sell is more on the consultant business model than the old factoring model. Instead of selling a software, you will sell the knowledge to develop a software. No matter what happens, you can be sure that the companies won't leave their business running alone. Let's imagine a word without any OS running. Well, you can be sure that a company will go "hey! I need that piece of metal to be usefull". They'll do a simple analysis: what is the more cost effective between paying people to do the old paperwork or paying someone to develop an OS. The answer is: paying someone to do the paperwork for short term. Yet, let's say you're a BIG company and that you know that company B is in the same situation, as is company C,D and E. Well if you all group together and pay company F to develop a software, the total price will be lower. You split the prices with other company and you create an OS. Then again, you always want to lower your prices to make more money. What you do? You go see company I, J and K to help fund the development. But company B,C,D and E also did the same, so know you're about 30 paying for the development. Cost gets lower, company F makes the same amount of money and the development goes on. That's where a "perfect" OSS model would tend to. Now, will that happens? The answer is simple: IBM is behind linux Sun is going with open Solaris Novell is behind linux IBM, Sun, Novell... aren't they the "old school" computer companies? It's not generalized yet, cause we need a really important player for that to happens: MS. But they know it too much: their model is dead, they're only trying to buy time (OOXML) before it is too late, which is EXACTLY what I would've done, as everyone of us ;)
this whole article is a case of when your a hammer, everything looks like a nail.
If you mod me down, I will become more powerful than you can imagine....
....or red hat, or suse, or maple, the get back to us.
Grandpa: My Homer is not a communist. He may be a liar, a pig, an idiot, a communist, but he is not a porn star.
There have been many interesting points of view raised here. The concensus seems to be that FOSS is a race to Zero, and I agree. I also think that this is a good thing. I recall some years ago there was a piece of commercial software around called "Notepad Plus", and more recently another one which did source highliting and all kinds of nice stuff. I can't remember the name of that one, but it had a frog for it's icon. Now, there's SciTE, which is absolutely fantastic. Since discovering SciTE I haven't looked back. This is an example of the 'race to zero' you're talking about. I'm a software developer, and more recently I've become a bit of a FOSS zealot - I've contributed a couple of things to FOSS projects, but not much yet. The way I look at it, when you contribute to an OSS project you're giving something back, but if you use OSS then your contribution is very likely to be a very small percentage of the total amount of work you benefit from. and Free software works for everybody's benefit, except perhaps the developer. Alot of people seem to think that you have to shift from doing software development to doing development and support if you want to stay solvent in the coming world where all software is FOSS. but I disagree. There are people (like me!) who despise doing support, and would much prefer to write documentation and simply deal with very high level "This has been confirmed as a bug" type stuff rather than providing support, so not everybody is going to find this shift in emphasis away from development to be attractive. Secondly, A position like mine will never go away. I work in a non-IT office, writing and supporting code which is very specific to the office I'm working in - this stuff will pretty much never be replaced by FOSS, regardless of what innovative software somebody comes up with. I'll still be needed to do all the stuff which is very specific to my office, even if commercial software has gone the way of the dodo. Thirdly, there will still be a requirement for innovation and development, even after all software hits $0, there will still be companies who need things done. For example, IBM might want a capability added to a filesystem or a database, and the best way to achieve that will be to hire a bunch of people to do it. So perhaps software will be driven by what business wants rather than what some marketing team thinks the consumer wants, but I really don't think that the job of the software developer is going to go away any time soon.
The intent of the GPL -- which is, arguably, not "open source" software because it fails to meet the non-discrimination requirement of the "Open Source Definition" -- is, indeed, to cause a race to zero. Richard Stallman specifically said this when he authored the GPL: his goal in creating the license was to extinguish programmers' chances of making a living via what he called "proprietary" software. (The correct term is "commercial" software; the word "proprietary" actually has a different meaning.) He hoped that programmers -- not being businesspeople -- would be naive about the economics of software, and could be duped by rhetoric into dooming their own profession. They haven't completely doomed it, but they certainly have done great damage to it. Fortunately, they are beginning to realize the ruse that has been perpetrated upon them. The GPL and other viral, confiscatory licenses do their damage because they discriminate against programmers (the reason why they do not conform to the Open Source Definition). Anyone else can use the software as he or she sees fit without giving anything up, except for programmers -- who must give up the right to their incremental improvements. Since incremental improvements to the technology are precisely what programmers are rewarded for, forcing them to give away this valuable work reduces its market value to zero and prevents them from being successful in business. Why, then, does the "opensource.org" Web site claim that the GPL is an "Open Source" license? Primarily because the founders of "opensource.org" had financial and personal interests in GPLed software -- Linux in particular. They therefore ignored their own definition, on purpose, and added the GPL to their list of "approved" licenses. But it shouldn't be there. Other licenses on the list, such as the BSD license, do conform to the definition and are also much more favorable to programmers because they allow programmers to retain the rights to their incremental modifications and thereby to be rewarded for the advancements they contribute to the technology.
Most of the NASDAQ exchange is run my massive sophisticated computer systems.
Wondering why brokerage fees is not zero?
I'd like to buy homeland for our 10 million people. http://twitter.com/mahadiga
The short answer: Yes. It is a "race to 0" if you will.
The longer version is that there has always been something suspect in property rights, at least as implemented in modern society. Yes, yes, bloody communism, I know; let's get past that one, OK? I'm not saying that we shouldn't be able to own our own houses or cars or whatever, or benefit from our own efforts - that is and has always been the pipe dreams of people with too much time on their hands. Communism, in the essence, has always been about finding a fair balance between the amount of work you put in and the benefit you get out. If you would care to check it, it is all there, even in Marx' works - he talks about the means of production, in a context where a tiny upper class of people who had mostly inherited their wealth, lived as parasites on the ever more extreme exploitation of a working class. Who knows what he would have come up with in this day and age? But he would probably have approved of the open source idea.
The brilliance of OSS stems from the fact that it builds on the same principles as scientific research and publication: the free exchange of ideas amongst peers, which allows everybody to make improvements. The only criterium for success is whether it is received well and gets used by the community. The absurdity of property rights is never more obvious than when it comes to the concept of intellectual property; we have seen over and over how new ideas come, not from one unique person, but from many sources at once. Take the theory of evolution - Darwin got his name on it because he managed to publish it first in the place where it mattered at the time, but he wasn't the only one who has that idea; it had been bubbling in the scientific community for years - if he or Wallace hadn't come up with it, somebody else would soon after.
Software is just another example of ideas written down - you can of course refuse to let others see how you did it and treat it as your property, but as OSS shows, it is never that difficult to come up with that very same idea - and the cooperation of OSS means that it will eventually become better than the closed source version. So, how to make money from your work? Well, how does any craftsman make money? By making a product and selling it. But once it's been sold he has to make another. When you make a living from your ideas, you are in the same boat as scientists and artists - those that do it only for the money are at best mediocre and most of them only just scrape along, which I think is fair enough. If you do it because you really love doing it, you are either good enough that you can make a living, or you have a day job that gives you enough to finance your real interest.
That's the way it is, and the way it should be. Don't whine about it, or it will be my turn to call you names.
But it will filter down, people want their home computers to run the same as they have at work, so the more OSS takes off in large businesses the more it will filter down to home users..
[citation needed]
Commodore 64, Loading up the dance floor!
Open source software vendors promote true Competition in the industry.
I'd like to buy homeland for our 10 million people. http://twitter.com/mahadiga
By this time next year you'll be able to pull all the elements out of the air and robotically assemble them into steak or a rocket ship to the moon.
We just need the code and a decent fab.
I hold very few opinions. I hold information based on observation and fact. If you wish to disagree, please use facts.
Yes, open source software absolutely leads to a situation of "race to zero". As goods are commoditized and competitors can only differentiate their products based on price, prices are ultimately driven down.
Of course, some say that if companies continue to innovate, this situation might not be that bad. However, I'm definitely not convinced that people can really make a decent living through working on open source products alone. I don't know anyone that does.
There are people writing here who need to get out from behind their monitors and look at the real world. The modern economy does not require something to be manufactured to have a value. As we now know, banks have been selling promises and shares for years. And ultimately, selling promises of promises...but that is another debate.
Anyway, the point is that anything can be sold if it has perceived value to someone - it doesn't need a manufacturing cost. Hence, the software market does exist. What's more, it can and will continue as a market to sell a license. Don't forget, you don't buy software, you buy a license to operate it.
Now Open Source is great and useful to us all, but it does take time (==money) to develop. Where does that come from? Lots of people have pointed out how IBM and Sun are embracing Open Source. Of course they do - but their primary business is to sell hardware. IBM and Sun used to have a model of sell you a computer with just their software. The idea that the same OS could run on any hardware just didn't exist. I'm sure if IBM/Sun have their way, they'd go back to that.
Then we have the Open Source software companies. They make money by adding closed/proprietary extensions or services to make it useful. Then after a few years they give that bit away and build something new. In other words, they're only Open Source when it suits them. There's nothing wrong with this from a business point-of-view. It makes good economic sense. It isn't a moral high ground or the idea that software isn't real and shouldn't be paid for. It's simple, good old fashioned - I have something you want, please pay me, business.
The problem for the original poster is that because they are basing part of their business on Open Source, they cannot really go after anyone when they copy their proprietary bits, making them valueless. You've got two options: 1. Expand your portfolio, 2. Go closed, 3. Make hardware. Expansion is not a long term solution - you will need to add knowledge to your company to expand your product range, which means more people - unfortunately, you need greater sales to afford to do that. that you haven't got. So your option is to start making units where people have to buy your box. Then you've got lock-in. And this is the inevitable consequence of allowing anyone to take your ideas and/or code and reproduce them without any of the R&D costs.
Unfortunately, all those who deny the value of software and suggest that nobody should ever charge for it are damaging the whole software business. The logical end to their goal of destroying Microsoft and any other company selling software is a return to the 1970s, when the only people who could afford to make software were those making the hardware and then those hardware people had total control. Who owned that market? IBM. Now who puts most money into Open Source? IBM?
The people you are referring to do not follow the instructions. (and to be honest I don't have "basic mechanical aptitude" - I have a 30 year engineering career including 5 years as a general manager of a plumbing company - as a result I have some experience of getting untrained people to use modern plumbing fixtures. It was while working for this company that I got interested first in MRPII and then in the actual coding of MRPII systems, which is how I come to have 3 years of assembler, 5 years of C, 8 years of Java, as well as ten years of management and four years of metallurgy and component design. So perhaps I do have a clue as to the value of experience.) The skill level of your straw men is not comparable to that of the average IT worker. You have to take my remarks in context - that is, that in software just as in metallurgy, once people know how to do something properly less skilled people can build on it. Graphic designers can build working websites without knowing anything about Apache under the hood.
To take an example from the automotive world, one of the most basic cars money can buy - the Hyundai i10 - has an engine with 3 valves per cylinder, electronic management, and electronic fuel injection - all of which would be unavailable on an exotic sports car of the 1960s. The industry now regards this as an entry level bread and butter engine, using technology freely available to anybody.
From scarped cliff or quarried stone she cries "A thousand types are gone, I care for nothing, no not one."
"Open source" is the communists' method of software production and distribution: steal someone else's work and then give it away.
Capitalism, however, rewards the industrious and promotes further advancement.
Obviously capitalism will win.
Fata viam invenient.
Hi, I agree with the points about the pace of innovation needing to increase to keep the commercial window (time between launch of paid-for version and time before OSS version is as good/better) open. Also there is the advertising model, which is a bit different. We are developing a system for managing property portfolios online. It's complex and taking a lot of development, and we're giving it away for free. This will be a major headache for the reasonable number of companies that sell shrink-wrapped portfolio management software, but we'll make reasonable money from advertising and sales lead generation. I see a lot of change in business models needed, but that also means opportunities. Also, look at the Netflix prize - a lot of entrants have chained together open source software in order to make money. As a developer you will always have work to do, but perhaps at a different point in the chain. Peter
From a software developer point of view, source code is not, and will never be, knowledge (... knowledge is not wisdom). To think that downloading an opensource application give you the 'so called power' of improving it and of having the best application for nothing (because free) is a pure mirage. If someone download your opensource code and clone the commercial plugin you are selling, the final free product has no future, because the knowledge of how the 'core' is working, the ability of debuging/extending/improving/support it is in your hands. The "opensource cloner" will never be able to compete with you, all that he can do is working for free (i.e. loosing money and maybe preventing you to earn the fruit of you work). Opensource applications that can *really* compete with commercial applications are done by companies which code/maintain/understand the complete product. And these companies need to make money to pay their employees. End of the story.
You've never worked in a company... Most company's can run the worst crap ever made and require you to work around all the problems because they don't care and don't want to spend money on things like software, developers etc.
Change is certain; progress is not obligatory.
I guess you are missrepresenting your problem, and consequently, accusing the wrong party here. There isn't enough interesting work to do because our tools aren't as concerned with making it easy for competent people to develop as they are concerned about making it possible for incompetent people to do so. That is more a consequence of the tools being developped (and specified) by corporate entities than of the way their development is paid.
Now, FOSS makes it possible (but not granted) to write tools that don't incorporate the corporation mindset of "every developer is the same", while on proprietary software that is almost not possible.
Rethinking email
This is actually why i like the model that the pfSense developers use. the entire program is free and opensource. they have a couple plugins that they made, and other authors are more than welcome to write their own plugin also. for those that cannot write a plugin, there is a bounty system in which you can offer money for someone else to write it for you. and beyond that, if there is a major change or a business level plugin that needs to be made, the core developers offer paid support that means they will dedicate time to working on the request with the final product rolling back to the free version of the product. EVERYONE benefits from the deal and actually I find it helps make a tighter support community in general.
You raise an interesting point. I am a developer for a very popular (albeit, niche) open source application used by electronic musicians. It used to be sold for a very expensive fee, but it was forced to switch to GPL - in part because of the popularity of competing open source programs, and also due to the significant improvement in quality this move achieved. The only way this project could have been capitalized on was through service. Open source applications, if used by a multitude of people like in both our situations, are typically much more stable and innovative than any commercial competitors; friendly, fast, helpful, and dependable service that the customer comes to rely upon is the way to prevent open source from being that "race to zero." See Redhat and SuSE for examples. Don't look toward Sun... the Solaris 10 platform only still survives because of Sun's reputation as a stellar sever/workstation manufacturer.
The difference between closed source & open source in this case is that if it were a closed
source app, the Entry Barrier would be higher.
This in my opinion is one of the most important things to think about when deciding
to go open source on something you expect to make money on.
If my years in software development and open source have taught me anything it is bespoke or service or bust, choose one.
Either what you're writing is a service or it's bespoke, anything else and what you're creating has zero value (or close enough to it).
We operate in an economy of scarcity, no scarcity, no value. The simple and unavoidable fact is that software has zero scarcity; once one copy exists there is no limit to how many copies can exist. Same is true with music and all other forms of media and of course and we can see how hard that realization is for them to make.
My advice to you would be that software development is a booming industry with a great future; just make sure what you're making has scarcity and thus value.
I had a similar thing happen to me as what is described in the article. I wasted a half a year developing something that was undercut by a free offering that came out of the blue.
The problem with free software is that one cannot predict if/when it will arrive, so you need to assume it always will arrive soon. It's bad to bet on there being an ability to charge anything for what you've asked. (There's a big difference between anything and nothing. One of those scales way better.)
It's not like making a really nice desk out of wood, where you know in the end you'll be able to sell it for something, even if you have to lower the price a little.
And if you have to give software away and hope for consulting revenue, then what you're saying is the software creation industry no longer exists, there is only a software maintenance industry. What will happen if you give away a well-written piece of software is that others will take it over and maintain it. Of course, if you've obfuscated it or left bugs in it or made it hard to extend, you might have a shot of still being needed for a while to maintain it. Is that what we want to claim we as a society want to encourage? Creating things that are just not complete enough to take and use?
Kent M Pitman
Philosopher, Technologist, Writer
I guess you are missrepresenting your problem, and consequently, accusing the wrong party here. There isn't enough interesting work to do because our tools aren't as concerned with making it easy for competent people to develop as they are concerned about making it possible for incompetent people to do so. That is more a consequence of the tools being developped (and specified) by corporate entities than of the way their development is paid.
Now, FOSS makes it possible (but not granted) to write tools that don't incorporate the corporation mindset of "every developer is the same", while on proprietary software that is almost not possible.
You're a bit off the mark.. My point is that I enjoy creating those low level tools, the ones that have already been created. FOSS has led to some great tools, but it also leads to a lack of diversity. Yes, I know there are thousands of Linux distros out there, but they are 99% the same, with slightly different packaging. Its difficult to create something fundamentally different, unless you do it for a hobby. Furthermore, its hard to get started working on the low level aspects of FOSS projects, because the amount of effort involved in even getting started on things like Linux kernel development are beyond the time constraints of all but the most dedicated hobbyists. If you notice in grandparent post, I wasn't proposing abandoning FOSS, nor was I discounting the works created through it. I was merely pointing out that a lot of the interesting things used to be things that a developer with only a few years experience and with a good understanding of the theory might actually get paid to create. Instead you make veiled insults to my level of ability. I don't lack the ability to do these things, I lack the time. If it were my job, the time problem would be eliminated.
RedHat share value = $8.74 http://finance.google.com/finance?q=RHT
Microsoft share value = $19.90 http://finance.google.com/finance?q=MSFT
Since RedHat sells almost all software products that Microsoft is offering as closed source products the race to equilibrium is very far.
I'd like to buy homeland for our 10 million people. http://twitter.com/mahadiga
Let us use text editors as an example. It's inefficient to have human beings spending millions of man-hours making hundreds of different text editors that all solve the same problem. If we could somehow reduce the amount of human effort spent writing text editors, the remaining effort could be diverted toward solving as-yet unsolved problems.
The world really only needs a few text editors, so one might think it would make sense to reduce the number of text-editor vendors, allowing a few vendors to serve everyone's need to edit text. In that case, there would be little to prevent these companies from charging exorbitant prices for (proprietary) text editing software. Furthermore, those companies would be free to waste resources developing features nobody wants, hiring incompetent staff, buying expensive furniture, and making nonsensical "premium editions" ("I'm sorry, the Standard Edition can only edit *.txt files. If you want to edit *.c or *.cpp files, you need to buy the Professional Edition. Also, the *.bas files you made with the Educational Version can't be edited with any other version."). By reducing the number of text-editor vendors, we enable those vendors to become extremely inefficient.
In a free market with only a few producers making expensive, poor-quality text editors, new vendors will naturally enter the market with cheaper alternatives of better quality. This, in turn, forces the incumbents to either "get efficient or get lost". So, in order maximize the efficiency of individual vendors, you need sufficiently many vendors that none of them acting alone can manipulate the market price. However, if you have 200 vendors making 200 different text editors, then 199 of the text editors are extraneous but necessary to keep the market competitive. Every so often, some some of these vendors will be purchased or otherwise eliminated by their competitors, and there there will eventually be so little competition that prices will again begin to increase. When that happens, new competitors will enter the market, and they'll waste yet more human effort developing brand new text editors that serve no other purpose than to stabilize market prices.
Free/open-source software (FOSS) offers an escape. People may decide to write one last text editor---once and for all---to avoid having to continue paying for this otherwise endless cycle of wasted human labour. But how will the initial development of this new text editor be paid for? Here are a few possibilities:
This provides a blueprint for how to make money selling proprietary software in a world of FOSS:
I just re-read your post, and realized I completely mis-interpreted it. No more posting before drinking coffee for me.
Facts are easy to see - just look at the marketshare of OO.org vs MSOffice, or GIMP vs Photoshop, etc.
...but you must innovate in a different direction. Who Moved My Cheese?
will software simply be a by-product of the operation of other industries?
Software only exists because someone in some industry needs it to help them do their job. It is by definition a by-product of other industries.
That's how it worked for dos and windows, which had success in a business setting thanks to IBM...
Prior to that, the home computer market was split between Commodore, Atari, Timex/Sinclair, Apple and a few others...
http://spamdecoy.net - free throwaway anonymous email - avoid spam!
We can already see this in the case of Operating Systems because everybody uses an OS AND because there is no scarcity of OS related ideas either (OS algorithms are easily available). And therefore, sooner or later, somebody will find utility in doing it for free and bear the oppurtunity costs.
Some companies try to emulate scarcity by introducing DRM, but any such attempt will inevitably face competition from non- DRM substitutes which will inevitably lead us back to the problem of no scarcity. Some other companies try to write bad/incomplete software so that they keep improving and customizing it. But such companies will face competition from better/more complete software.
There are however someways to get around this problem:
Heroes die once, cowards live longer.
"My company is a software vendor/developer. We maintain a popular software product and keep ourselves afloat by extending the value of the core project. Over time we've seen our business model eroding as offshore companies produce cheaper versions of the utilities that are our bread and butter. Something that was worth $5K last year is suddenly worth $1K because the Indian version is just as good as the US one and they pay their developers peanuts. This same cycle is obviously having an impact on other software vendors. Is cheap competition ultimately a race to zero? In ten years will there be any cost associated with commodity (non-custom) software? If not, will there still be a 'software industry' as it exists today in the West, or will software simply be outsourced entirely to sweatshops in Asia? Is that a good thing or a bad thing? As a professional developer, do I need to fear this or feed it?"
"And the meaning of words; when they cease to function; when will it start worrying you?"