Open source, free markets, and the capitalist urge for $0.00
Slashdot asks a provocative question: "Is Open Source Software a Race To Zero?"
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?
It's a good question, but the answer is the same as if asked about free-market economics: yes. Yes, open source is a race to $0.00, because that is what free-market capitalism is all about.
Indeed, the "free" in "free and open-source software" is really about free markets, more than anything else. This is why Tim O'Reilly has been urging the open-source world to stop fixating on bits, whose price point is dropping to $0.00, and focus instead on data and higher-value services around data.
Open source is a free-market, capitalist phenomenon. It's all about driving yesterday's value to $0.00, and forcing the market to innovate new ways to discover and price value.
Matt Asay brings a decade of in-the-trenches open-source business and legal experience to The Open Road, with an emphasis on emerging open-source business strategies and opportunities. Matt is vice president of business development at Alfresco, a company that develops open-source software for content management. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure. You can follow Matt on Twitter @mjasay. 
1. MS Office: If Microsoft had made MS Office cross platform (Windows/OS X/Linux/Unix) BEFORE OpenOffice was developed, would OpenOffice have been developed? OpenOffice simply addressed the need for an office productivity suite on non-Windows platforms.
2. Photoshop: Would GIMP have been developed if Photoshop was available for Linux/Unix?
3. iTunes: Songbird is evolving into a potential rival for iTunes. Would it have been developed if Apple had made iTunes available for Linux/Unix?
4. ...
It is possible these programs would have been developed anyway, but the need for them would have been much less and people may have just stuck to what they already knew.
Personally, I think commercial software companies should move quickly to support Linux before Linux gains further market share with alternatives that entirely negate the need for their products.
Software is quickly becoming a commodity, which is good for everyone. Even the soon to be dead companies that can't adapt.
As someone caught in this squeeze, I'd love to see a way out of it. Ten or fifteen years ago I could write a little tool that provided value for my customers and expect to get a fair return on my investment. Now I don't expect to see any return, so (economics again) I curtail my tool building. This doesn't seem like an optimum allocation of resources, but I've got bills to pay.
Software is an enabling technology. Its future is most likely in enabling services, utilities and hardware.
- by forever4now November 24, 2008 12:24 PM PST
- @The_Decider
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- by The_Decider November 24, 2008 3:08 PM PST
- No it doesn't have to be open source, and that was not my point.
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- by The_Decider November 24, 2008 3:09 PM PST
- To give you an example:
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(7 Comments)I am not familiar with all the licensing details, but I do know there are closed source applications being delivered with Ubuntu and other distributions (e.g. Skype). There are also a number of programs that are offered for purchase on the CNR site (www.cnr.com). Thus, I don't believe it is a requirement that Adobe, Microsoft, or any other commercial software vendor open source their software, in order to offer it to Linux users.
My point was that these programs would still likely exist, even if they had a linux version, precisely because these programs were not open source.
Nvidia produces proprietary linux drivers for its video cards, and they are top notch.
But there is a still a drive to produce working drivers for these cards that are open source.