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GNU is Not Unix

Joel On The Economics of Open Source 383

Stephen writes "The ever-incisive Joel Spolsky discusses the economics of open source software in his latest Joel on Software column. Why do so many large companies want to develop open source software? It's not because they have suddenly converted to Stallmanism."
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Joel On The Economics of Open Source

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  • I thought the article was well worth reading, but the statement that browsers were a good complement commodity to servers seemed strange to me. How so? Server and browser software is independent of each other, interacting only through a well-defined and public (okay stop sniggering) protocol. Besides, browsers are a mass-market item while servers are for a far smaller segment. So how does market penetration of browsers support server sales, except for via brand recognition/mindshare of potential buyers? Or perhaps dirty tricks (like browser company "portals" as default homepages) to push products?

    Maybe I answered my own question. (And did anyone else read "Stallmanism" as "Stalinism" the first go-around?)

    • by jshowlett ( 134148 ) on Monday June 17, 2002 @10:37AM (#3715497)
      Simple. With no web browsers out there, there wouldn't be much demand for web servers, would there? In this case the strategy is not to grab market share from the competition but, in the words of Dubya, to "make the pie higher!"
    • by Anonymous Coward on Monday June 17, 2002 @10:41AM (#3715542)
      I thought the article was well worth reading, but the statement that browsers were a good complement commodity to servers seemed strange to me. How so?

      Name-brand recognition.

      The part you mention is actually the one flaw in an otherwise great article: he mentions that Netscape gave away the browser in hopes they'd be able to sell servers-- which, in the time immediately after the free MSIE hit the market, was true-- but then neglects to mention that this did not work. Which is a large part of why Netscape is no longer a company. For the exact reasons you mentioned-- interchangability and stuff-- Netscape's browser presence meant jack shit for their web server platforms and enterprise servers and such.

      (This may be a good time to mention the theory that AOL bought Netscape not just to grow, and not just so that they had the browser to use as political leverage against MS, but also so that they had control of the netscape.com start page. AOL worked out that supplying the browser does give you control over the default start page, which many users will ever change-- which, to a media company like AOL, equates to an ungodly number of hits as your page pops up every time someone opens a new window. Somehow, though, AOL doesn't seem to have used this to the same advantage MSN has.)
    • by Anonymous Coward on Monday June 17, 2002 @10:42AM (#3715550)
      Forget that they're supposed to use common protocols and whatnot; imagine that in order to view stuff from a MS server, you need an MS browser, to view stuff from a Netscape server, you need a Netscape browser, etc.

      Real life isn't quite that simple... for the basic stuff the browser doesn't matter, but for the more advanced stuff (browser-based administration, XML datasets being transferred around, applet support, etc...) you're going to get better results with the "native" browser.

      A better example would be streaming media - you nead a RealPlayer browser to get data from a RealPlayer server - and (to tie it into the browser argument) if you control the web browser, you're in a much better position to control the media browser... or the instant messenger... or the mail client.... etc.

      So if 99% of people use IE, and thus use Windows Media Player and MSN Messenger, it's going to be pretty appealing to use the Windows server package, rather than use a patchwork of other people's servers.
    • The Thin Client Syndrome.


      I thought the article was well worth reading, but the statement that browsers were a good complement commodity to servers seemed strange to me. How so?


      Netscape si now a consulting company which is mainly assisting in crafting intra net, browser controlled, business applications.

      Instead if writing client apps or using X11 for "windowing" with a "server application" the browser is used.

      Instead of having a true "thin client" a PC is used. Well, the customer has a PC for using MS Office.

      He also has browser.

      Nescape has the "networking computing" and server computing and "web app" know how. So making Browsers commodity makes thin clients obsolet and boosts "simple unix based" server sales because it makes BIG IRON client/server solutions less attractive.

      Bottom line the customer wins: no big iron needed, reuse of the PC, no thin client needed. Basicly no software to distribute and install on teh client except of the browser.

      angel'o'sphere
    • Well, it was an ok idea at the time. But we all know it didn't work now. By the time netscape should start earning money on their webservers, everyone was already happy with their open source equivalents...
    • When Netscape started up, the "world wide web" was NOTHING like its current size or influence. When Netscape started, Mosaic was showing people that the web had great POTENTIAL, but for many non-technical people there weren't enough services to make it worth using. Netscape wanted to sell servers; if it wanted to sell other people servers, there needed to be a lot of potential users of those servers. Netscape "gave away" the browsers so that there would be a market. Although it didn't work, this actually made sense at the time. After all, when you sell one server, you can (in theory) charge a big initial fee, plus lots of support fees, and each sale brings in lots of money. Client sales are a pain; each one only makes a little money, and supporting each user can cost more than the sale. A business strategy of selling where the profit margin would be largest seemed like a good idea. I suspect Netscape thought that once they owned the browser market, they could create proprietary extensions to their server so that users of other browsers would have a poorer experience (if it worked at all).

      However, the big picture intervened here, in many ways. First, I think Joel is right, companies want to commoditize complementary products, because it leads to more sales for them. But different organizations will want to commoditize different things, because it's in their interest. As a result, sometimes the interaction of different players can result in the commoditization of many product categories. This can have a very beneficial result to the consumer, because commodity products are often in the consumer's best interests.

      Looking at the Netscape case, Netscape had an interest in a commodity browser to support a proprietary server. But server administrators, using open source software approaches, managed to commoditize the server (Apache), ruining that approach. And Microsoft exploited its monopoly hold on Windows and OEM licensing agreements to prevent Netscape from getting their product on many PCs (as well as eliminating any possibility of selling Netscape for a profit). (In this case, some of these actions have been found illegal, but I believe similar things can happen even without illegal activity). As a result, Netscape ended up open-sourcing Mozilla. Now both the client and server sides can be viewed as commodity products: the server certainly is a commodity product, and Mozilla certainly limits what Microsoft could charge for a web client. This is a result neither Microsoft nor Netscape would have wanted, but it's better for the consumer.

  • Misread (Score:5, Funny)

    by flipflapflopflup ( 311459 ) on Monday June 17, 2002 @10:34AM (#3715474) Homepage
    "It's not because they have suddenly converted to Stallmanism."

    Anyone else misread that as "Stalinism"?

    • Re:Misread (Score:5, Funny)

      by k98sven ( 324383 ) on Monday June 17, 2002 @10:45AM (#3715569) Journal
      Anyone else misread that as "Stalinism"?

      The word "Stalinism" is deprecated, the correct term is "GNU/Communism".

    • by FreeUser ( 11483 ) on Monday June 17, 2002 @11:10AM (#3715701)
      Anyone else misread that as "Stalinism"

      Of course not. That was the entire point of coining the term "Stallmanism." It is the use of language to subliminally implant and drive home a particular political stance, in this case a strongly anti-RMS, anti-FSF, anti-freedom (or at least, apathy-toward-freedom) stance.

      In short, the usage of such a term is a cheap form of propoganda on the part of the Slashdot poster (the term is not used by Joel Spolsky in the article itself). Which isn't really surprising, since most slashdot article posts have a strong bias in their summaries ... this is just a little more extreme than most (and quite a bit less appropriate than most, for a site the prides itself on being a supporter of free software).

    • "It's not because they have suddenly converted to Stallmanism."

      Anyone else misread that as "Stalinism"?

      So there's actually a difference? ;-)
      • There's some. For instance, Stallman, to date, hasn't used his military to invade other countries and kill millions of his own citizens. I know it's a nit, but I was here to pick it.
        • As anyone old enough to remember the Bloom County reference knows, Bill Gates does not have enough money to buy Sweden; it's Norway, and it's enough to get him a date with no kissing.
  • When I was young, I used to do a lot of programming that I never sold (usually gave away). I thought it was great though because I was producing these neat products that people would download and use. (or like my search engine which I will not list for fear of /.ing)

    Then my father said to me one day "why don't you charge for it"

    I responded "because it's free, it doesn't cost me anything to program it"

    Father - "well, how much time do you put into it?"
    Me -"a couple of hours a day" (back in HS)

    Then he said, "so are you saying those two hours of your time is not worth any money?"

    I then just stared and realized what he was trying to get across to me. I can work for free, I can do a lot of things for free, but the my time becomes worth $0 by those calculations. When in reality it should be worth far more.

    Open Source software is free for some, but for all of the programmers and all of the companies behind the scenes it's very costly.

    Something to think about (I still love Linux, though. :-)

    • This is why most OS projects are done as a hobby, not as a job. You give back to the community on your own time, but still put food on the table.
    • by PeterClark ( 324270 ) on Monday June 17, 2002 @10:49AM (#3715593) Journal
      Except that with Free/Open Source software, you are being paid: you are being paid with fantastic programs that would be impossible for any one individual or company to replicate. Releasing software Free is the appropriate expression of gratitude to the community.
      The greatest lie of our market-based system is that time equals money, in all circumstances. (Please note the qualifier.) We should not become so obsessed with money that our activities are dictated by it.
      :Peter
      • by FreeUser ( 11483 ) on Monday June 17, 2002 @11:03AM (#3715664)
        The greatest lie of our market-based system is that time equals money, in all circumstances.

        Exactly!

        If you and your girlfriend are having sex (for free), do you regret it because you spent six hours making passionate love and didn't charge her for it? Does she regret it because she didn't charge you? After all, time is money and hookers typically charge a couple hundred bucks an hour.

        (I won't bother with the "did you buy her dinner, then you paid for it" argument, since it misses a number of nuances ... like going out to dinner because you enjoy eating out, and enjoy a woman's company, etc.).

        Contrary to popular myth greed ins't good, and most of the time time isn't money. Greed may be a reality we have to live with (especially living in a society that deiefies and nurturs it the way ours does), but it comes at a very high cost. I could charge someone for the time I spend boring holes in the sky in my little Beech Sundowner, but since I'm doing it for pleasure, and taking a friend along for a ride doesn't cost me anymore than flying by myself does, the only thing greed would bring me in that context is a little money at the expense of taking a hobby I love and turning it into Yet Another Mundane Job. No thanks.

        The same applies to free software. Those who write free software (myself included) do so because we love to do it, not because we are trying to get rich doing so. If you're writing free software because you hope to get rich by doing so, then you're in the wrong field.

        The amount of great software I've received for free, not to mention the amount of freedom I've gained in both my business and home life by using free software, more than compensates me for the time I put into it, whether it is writing stuff as a hobby, or testing it (and reporting bugs) for my job. The payoff is in the collaboration, a collaboration to a degree which wouldn't exist between people blinded by their myopic, Ayn Randian Greed.
        • by killmenow ( 184444 ) on Monday June 17, 2002 @11:26AM (#3715804)
          Does she regret it because she didn't charge you?
          You mean your girlfriend doesn't charge?

          Where do I find one of those?
        • This all depends on what you think that the purpose of life is. If you are one of the strange people who think that life is about gathering as much money as possible then time is money, work hard, la la la. If you think (I'm in this category) that you should strive to be happy, make others happy (or at least don't make them unhappy unless they deserve it), and try to make the world even slightly better, then writing software and giving it away is well worth the time you put into it. You enjoy your hobby, get cool software, and other people get software too! You also get software from people with a similar philosophy. And yes, some free stuff is as good as or better than any commercial counterpart. Some examples that are hard to dispute are Hello World and ls. Some debatable ones are Python (a great language, much better than Visual Basic IMO) and Apache (which runs on almost all of the web servers with top uptime, according to netcraft [netcraft.com].
        • Yeah, but Joel's article isn't about why *you're* writing free software, it's why IBM is paying people to write it. They're two completely different things.
        • If you and your girlfriend are having sex (for free), do you regret it because you spent six hours making passionate love and didn't charge her for it?

          No, but most people don't use this as a business plan either (I've heard some Internet statistics that challenge this but you get the point). The point is, I may love programming software, and I may get great OSS based programs in return (give/take relationship), but it doesn't feed my family or pay the bills.
        • If I may have the opportunity to rephrase something in my original message. I will do so here.

          I didn't mean for it to come across as my time is worth money. My message meant to be that my is worth more then nothing. Therefore, even if I donate it to a project such as Linux, it is still worth something.

          The main essence of my original post, and my fathers comments is that as long as we are mortal (not living forever) our time is worth something. Just like as long as people believe paper with pictures of Laurier (in Canada) or Washington (in the US) or someone else is worth something, then they are. Even though they are just pieces of paper in reality.

          Now, I am not saying that I wouldn't decide to donate my time to worthy causes. As I do spend a lot of time programming and retouching my search engine, as well as other projects. And if I ever felt that I could help with Linux I definitely would be willing to. I am just saying that even though it doesn't cost me anything in dollars and cents, it does cost me time. Time which I do not have an endless supply of.

          As well, if I decide to have sex with my g/f or do anything else recreational. It isn't time that is worth nothing. It is time that I have decided to spend on romance, and entertainment.

          I think the gist of my father's message is a good one for people, and perhaps a happier one then originally came across.

          You only have so much time on this planet, spend it wisely, as your time is worth something to you. Not in dollars and cents, but in experiences, freedom and your life. If you decide to donate your time, remember that you are doing just that donating your time to what you believe is a worthy cause.

          I think that's a good morale for people today, and it definitely isn't just greed.

        • Time isn't money, but all time does have value. (At least, I value my limited time on this planet and I hope everyone else does.)

          Money is merely a system for abstracting value so it can be easily traded and transferred, to your children; between millions of consumers, factory workers and shareholders; and instantly across oceans. It's flawed, as you point out, but it's workable and nobody has significantly improved on it (that I've heard of, though I'm no economist).

          I think Joel's point is that some open source advocates claim that, because you pay $0 for OSS, it costs nothing. But it does cost time, which does have value. If the time belongs to a for-profit company, then that time has monetary value -- the company pays for those hours, which could be used for something more profitable.

          And even if the OSS contributors don't work for for-profit companies, their time does cost them just as much, even if it's hard to attach a number to.
        • Your missing the point. Everything you do has VALUE..

          Your sex example. I place a high VALUE on sex.. so no, I don't regret doing for 10 minutes because I place a high value on it.

          In economics money is used to provide an expression for value. It creates a stable base on which all types of economic comparisons are made. And as such, time has a certain value to it (and an associated opportunity cost). In other words if I spend an hour programming something for free... that brings me a feeling of satisfaction (lets say $80 worth of satisfcation). I could have spent that hour cooking, but that only brings me $20 in satisfaction... see?

          Business place value on time. If someone spends 4 hours learning how to use Mozilla they have brought very little value to the company (After all, what does Mozilla have that IE doesn't.. and they already have sunk the cost of learning IE)...If they spend those 4 hours writing documentation, they have created value for the company.

          Your example even demonstrates this. You place a certain value on your hobby... you also likely value the no-hassle pleasure you get form bringing a friend. To turn this into a business would decrease its value. An economist would put a dollar amount on this value.. and then could use it to explain your behavior.

          In this sense.. everything has a value including time. Time is valuable, and how you use that time has an associated cost.
        • The same applies to free software. Those who write free software (myself included) do so because we love to do it, not because we are trying to get rich doing so. If you're writing free software because you hope to get rich by doing so, then you're in the wrong field.


          The amount of great software I've received for free, not to mention the amount of freedom I've gained in both my business and home life by using free software, more than compensates me for the time I put into it, whether it is writing stuff as a hobby, or testing it (and reporting bugs) for my job. The payoff is in the collaboration, a collaboration to a degree which wouldn't exist between people blinded by their myopic, Ayn Randian Greed.

          Your scope is too narrow and your argument is therefore flawed. No one seriously claims that every human transaction is driven by some simplistic concept of monetary greed. Folks tend to act, ultimately, out of enlightened self-interest. That's much more basic than money. You code for the reasons you note above and you are satisfied that you benefit from doing so. Likewise, I work in my garden because I enjoy the work and enjoy eating the fresh vegetables that result. I give away fresh vegetables to my neighbors because I like them and because I like to do my part in maintaining a friendly social atmosphere in my neighborhood. Making money's not really a factor.

          Free software isn't free, it's simply subsidized. Unless you're independently wealthy or living off someone else's paycheck you'd better be making money doing something or you're going to have difficulties paying for your hobbies. The amount of time people can spend working on free software or flying airplanes, like any other project not done for money, is limited by how much time they're willing to spare from doing other more necessary things in life.
        • Sex has a huge dollar value, at least for me.

          Example: I've played hookey from work for sex. My company was at the time billing me out at US$100 per hour. I was risking losing my job. It was worth it.

          The reason you don't pay for sex is because the transaction, the act of paying for it, has a real cost Sex that you pay for is worth less than sex that you get for free.

          All of my time has value. I prefer to think of it the other way around, though: All money is time. Money can be limitless. Time marches on.

          Bryan
      • The greatest lie of our market-based system is that time equals money, in all circumstances.

        Actually, it is the greatest truth of any economic system. And it is an understatement.

        Money is nothing more than an attempt at an objective measure of value with the underlying assumption is that there is no objective measure of value. Time has value. A smile has value. Everything has value.

        Each of us, however, values everything differently. This fact is something so very fundamental, yet it is something socialism and communism miss entirely. Though money helps us translate our valuations into a rough average, capitalism recognizes this is a rough average. For this reason, under capitalism, all transactions make everyone involved richer.

        Let's look at a simple example. I have a piece of chocolate cake and you have a piece of vanilla cake. Unfortunately, I hate chocolate and you hate vanilla. How much do you think the chocolate cake is worth to me? How much the vanilla cake? If I saw the two side-by-side in a store, I would probably pay $2 for the vanilla and $0 for the chocolate. Assuming the chocolate cake was all I had in this world, we would say I hate no net worth. Furthermore, assuming the reverse was true for you, you would also have no net worth. In the economic universe consisting of the two of us, we have a total net worth of $0. The minute we trade cakes, however, our individual net worths jump to $2 and the entire net worth of our universe to $4 (until we eat the cakes!).

        My point? My point is that every decision we make has value. That includes how we spend our time. Choosing to spend time doing X instead of Y has value. You cannot escape it. You wallow in self-pity instead of take the $7/hour job at McDonald's after getting laid off because wallowing in self-pity is worth more to you than $7/hour. And because money is the only thing close to a quantification of the value we place on our decisions--including on how we spend time--time is in fact money.

      • That's great, but that won't put food in my 11-month old daughter's mouth, clothes on her back, nor a roof over her head, will it?

        Of course, since I have such *WONDERFUL* Open-source programs, everything's gonna be peachy.

        Not to sound like a troll, but time == money. I really don't have the luxury to volunteer my time to software projects anymore. Almost every project I've worked on and attempted to put volunteer time into ends up either really pissing me off, or ends up shooting itself in the foot (stampede anyone?).

        Unless I get paid to work on something, so I can raise my family, then I don't want to hear a thing from you about it.
        Don't get me wrong, I'm totally for people who can afford to give up their time to write open-source software. I work on Mozilla for christ's sake (I'm a netscape employee). I love working on the project, but I guarantee you, if I weren't getting paid to do it, I wouldn't. Now, this is an ideal situation, because I get to work with lots of cool people from the community. But, if it came between open source and feeding my family, I would choose to feed my family, thanks.
      • Except that with Free/Open Source software, you are being paid: you are being paid with fantastic programs that would be impossible for any one individual or company to replicate. Releasing software Free is the appropriate expression of gratitude to the community.

        It is interesting to me that an argument using Capitalist concepts as a base to critique Free Software was modded down and a reply that used Marxist (Communist) ideas was modded up. Funny enough, most Slashdotters probably wouldn't realize how much they agree with Marx and Engels Manifesto of the Communist Party [anu.edu.au] and probably would take offence to being described as having communist leanings. I guess it goes to show you how negativity in the popular media can alter perception of ideas that may have some worth in them.

        The really interesting thing about Free Software is that it seems to be a microcosm of the only scenario where Communism can be truly workable; when the cost of replication of goods or services of value tends to zero.
      • The greatest lie of our market-based system is that time equals money, in all circumstances.

        At one point Joel points out that just because there isn't money involved does not mean that there are no costs. Chosing one thing always costs you the "opportunity cost" of potentially making a different choice. For example, if you are chosing to spend (note the word spend) time writing some piece of software, it costs you the opportunity to do something else with your time (like beg someone for sex).

    • Why is value always in terms of $$$?


      One payment you received: experiance


      Another: Your contributions as well as many others have permitted FREE (beer) software to develop which costs you nothing to get.
      And yet another: Friends -- the people who download your software may not be able to pay you but one day they may help you get a job by being a reference.


      Linux got his job at transmeta because of what he did. Imagine if he charged for Linux from the start...


      So yes there are payment methods other than $$$...

      • "Getting stuff back", albeit stuff you would get even if you didn't contribute, is one strategy. (NPR kind of works on this idea). And maybe you contribute because the stuff you get back is better than if you didn't contribute.

        Another possible reward: You play it like Grampa Simpson and say "I just want attention". Supposedly scifi geekdom has had the name "egoboo" (for ego boost) as the "currency" people get for making cool fandom stuff for free. You gain the respect of your peers, a little attention, a stronger place in the community, people listen to you more. I think Open Source banks on this to a certain extent as well...it also ties into the experience to put on your resume aspect.
    • Quantify this! (Score:5, Insightful)

      by Interrobang ( 245315 ) on Monday June 17, 2002 @11:11AM (#3715710) Journal
      If I put a dollar value (imaginary money?) on everything I did, *I'd* be Bill Gates. Come on, folks, not everything comes down to money, and it's kind of a flaw in our culture, IMNSHO, that nothing is seen as important unless you can dollar-figure quantify it, package it, and sell it.

      This argument from above so are you saying those two hours of your time is not worth any money is similar to the MPAA's "lost sales" argument especially in cases where in reality no sales would have actually taken place -- you can't make income off a job you don't have. More simply, if no one is willing to pay you for doing whatever it is you're doing, you can't make money doing it. In that case, you have two options: you can do it for free because you like to (in my case, the concrete example would be "publish for copies"), or you can go off in the corner and sulk.

      Incidentally and additionally, the previous poster's argument only makes sense at the individual level, and not at the organizational/business level. Businesses have to do things that will make them money; that's what they're for. However, further deposition into the logical consequenses of that statement leads into politics and ideology, though, and is irrelevant to this comment.
      • If I put a dollar value (imaginary money?) on everything I did, *I'd* be Bill Gates. Come on, folks, not everything comes down to money, and it's kind of a flaw in our culture, IMNSHO, that nothing is seen as important unless you can dollar-figure quantify it, package it, and sell it.

        You are so totally wrong. EVERYTHING you do has value. Money is nothing more than an attempt to quantify that value. Your choice to take a bath instead of shower has some value to you. We do not tend to quantify that value with money since it has no value to anyone but you. However, the choice you make to shower or bathe versus going au naturale does have value. And the easiest way to quantify that is through terms like, "I would buy him some soap if only he would shower!" In other words, the cost of soap is clearly what your bathing is worth to me. In other words, money is a unit of value measurement just as sure as meters are units of distance measurement. and everything has value.

    • by mjh ( 57755 ) <mark@horn c l an.com> on Monday June 17, 2002 @11:12AM (#3715715) Homepage Journal
      Open Source software is free for some, but for all of the programmers and all of the companies behind the scenes it's very costly.

      Yes, but the cost is really widely distributed, so that compensation for any individual is complicated. Let me give you an example.

      I run Linux. I also have an HP printer, so I use the hpoj [sourceforge.net] software. I also like the CUPS [cups.org] print spool software. HPOJ and CUPS don't integrate very well. So I wrote, and distribute under GPL, a CUPS backend that allows it to integrate with HPOJ. I contributed about 2-3 hours of time to get this to work. But in return I got hundreds and hundreds of other people's work. I got a working printer and a very flexible print spooler running on a free operating system! And for that I made it so that other people can do that too. I contributed 2-3 hours of work that has value, because it saves time for whoever else uses it (2-3 hours multiplied by the number of users). Thus it contributes back to the economy of opensource/free software, making it all more valuable. I pay small amount of time, and I get back huge amounts of time. Moreover, my contribution makes it so that the next guy will get even more back for his/her contributions. Everyone that contributes a small amount of time, gets paid back much more than they contributed.

      What makes opensource/free software different is that it allows large numbers of people to contribute their work to each other, and cumulatively save themselves tons of work. I gladly trade 2-3 hours of work for 2-3 hundred hours of work. It saves me time and money.

      I like Joel's article, but it doesn't explain the tradeoff of how people get paid in opensource. It doesn't explain the small amount of effort input for huge amounts of gain returned that opensource/free software allows and encourages. And that's got to be part of the economic equation that explains opensource. It only tries to explain the economics of why IBM, HP, et al, are contributing to opensource. It ignores the fact that IBM, HP, et al, are also trading their small contributions of time for the huge amount of time and money that they save.

    • I see it more like co-developing stuff with other people. Lets say I want something and can't find finished GPLd software. I search for projects in sourceforge and try to get the stuff working. That benefits all the developers of the project, and me.

      Lets put it in a different way. I needed a java project manager for my company. I found one, but it didn't work very well. I helped to iron out the bugs. My company got a __free__ project manager, except that they __paid__ me for my time. I got a great deal, the other developers of the project got help.

    • Inch time foot gem (Score:5, Interesting)

      by jcsehak ( 559709 ) on Monday June 17, 2002 @11:17AM (#3715743) Homepage
      There's this zen koan:

      A lord asked Takuan, a Zen teacher, to suggest how he might pass the time. He felt his days very long attending his office and sitting stiffly to receive the homage of others. Takuan wrote eight Chinese characters and gave them to the man:

      Not twice this day
      Inch time foot gem.

      The day in which you coded that software you gave away for free will not come again. A small bit of your time is more valuable than the largest diamond. It's limited and you can never buy more. Never put a price on your time. It cheapens it.

      (BTW, if anyone knows exactly which characters Takuan wrote down, I'd be eternally grateful if you told/showed me, email is jcsehak.at.yahoo.com)
    • Of course, how many users would you have had had you tried to charge for it? Or, in other words, your time may not be free according to your father, but if what you produced did not have a perceived value to your users equal to the value of your time, then you were working on the wrong thing. And that will mean you should be working on whatever gives you the highest income, not what you _like_ to work on - which pretty much destroys the hobby and enjoyment aspect of it, turning it into another job.

      Of course, if you want to have it as an income source, you should reason like this. If you are doing it for the fun of it - and for the opportunity to learn stuff - then it just isn't a good value calculation. Trying to equal time and money in everything you do is a pretty destructive way to see your life. Why go to the movies, spend time with your friends or read a book, when you could spend that time much more productively with a second job and lots of overtime?

      /Janne
    • Think of your time spent as an investment. The fact of the matter is that a teenager's time is not particularly valuable. If you really wanted to monetize the time you spent programming you probably would have had to spend it pulling weeds or bagging groceries. A commercial software company wouldn't have been even remotely interested in paying you for your time, and it would be very difficult to get contract work. That means that in order to sell your programs you would have to come up with a scheme to market, distribute, and collect payment for your work. Shareware is the obvious answer to your problem, but making money via shareware isn't precisely a straight-forward excercise, especially if you are planning on making money on a piece of software that you only work on part time. Once people start paying for software, they expect things like a support phone line, upgrades, fancy documentation, etc. all of which add up to much more than a couple of hours a day.

      In other words the chances of actually getting paid for software written as a high school student (even if it is exceptional) are not particularly good. Especially if you aren't willing to treat your software as a business (meaning working business hours).

      However, programming, even if you aren't getting paid for it, is a much more useful investment of your time than most of the things that high-school students do. You could have spent those hours playing video games, for example. Programming is one of the professions where many of the most important skills are essentially self-taught. Good programmers emerge after hours and hours of programming, and like many other skills the sooner you start learning the better off you will be when you are in a position to profit from your work. You learned valuable skills while programming the software you gave away. If you would have tried to charge for the software your userbase would almost certainly been much smaller, and you probably wouldn't have made any money anyhow (although you would have learned some useful information about the software industry).

      I am not belittling the lesson that your father taught you, but Joel is right when he says that the reason that people are putting money into Free Software development is because they expect to make money from their investment. The fact of the matter is that your story illustrates the fact that software doesn't necessarily have to be ridiculously expensive to develop (high school students can do it in their spare time). Since Free Software also allows the development costs to be spread out widely it is no wonder that Free Software is advancing at a rapid pace.

  • by newt_sd ( 443682 )
    Ok talk about Econ 101. What is revolutionary here. Zero Price does not equal zero cost of total ownership no kidding. If you time is valuable to you at all there is no such thing as free. I do agree though that this myth of free is not so good. One problem I see with open source/free stuff is the lack of a stable central marketing agency. Redhat and a few others come close to it but IBM is probably leading the race as far as a complete marketing package surrounding linux. But think about that for a second. Why would a company do that unless it meant dollars for them. Well it does mean dollars for them if they provide the equipment which runs the free os. So now the linux community is letting a company or two do the complete marketing promotion for the whole industry. That just doesn't make sense to me. I think the whole open source business model (if you can call it that) is flawed if you look at competing desktop for desktop with someone like microsoft. I agree with the argument that a superior product wins out but you will need a 2 to 1 performance benefit before most of the general mass start to perk their ears and begin the SLOW transition for grandma and grandpa jones to begin to learn linux. Just my thoughts
  • by taya0001 ( 457928 ) on Monday June 17, 2002 @10:39AM (#3715519)
    step 1: make a inovative open source product that will benefit all involved and distribute it freely.

    step 2: ???

    step 3: Profit
  • by Mr_Perl ( 142164 ) on Monday June 17, 2002 @10:39AM (#3715520) Homepage
    Let me repeat that because you might have dozed off, and it's important.

    Now that's funny. How did he know I'd be snoozing at exactly that point in the article!
  • The article tries to build from basic economic principles, but conveniently misses one, the problem of free riders.

    Let's look as his examples:

    Netscape is trying to commoditize the browser market .. in order to dominate the server market. This would have been plausible in, say, 1997. I find it amazing that he tries to push this by anybody--the browser was commoditized.. and servers turned out to be irrelevant! Where is netscape now?

    IBM is investing in open source software to bolster its consulting services ... -- wait a minute. IBM's fortune was made in the early 50s by being the king or proprietary--you couldn't even buy their computers--you had to lease them! The US government eventually stopped this, but IBM's greatest period of success in the computer age was when it had a complete monopoly on sales and service of its own, very closed product lines. With the IBM 360 series, IBM saw some erosion of this due to "plug compatible" peripherals produced elsewhere. With the IBM PC (btw.. the author's description of IBM's "success" in commoditizing the PC makes NO sense whatsoever), IBM did poorer still--we all know how badly they did.

    But let's look at the specifics--IBM is a BIG company. Let's say (hypothetically) it could put its full weight behind OSS and therefore contribute a whopping 3% to the total corpus of reasonable OSS stuff. Suddenly, it has what--spent a lot of money for the benefit of all while increasing what it can personally consult on by a whopping 3%. Even if there are network, learning, or syndicate effects, this situation screams "free rider problem."

    Ditto for Transmeta..

    It's almost ironic that the author pics such dead or dying companies like Netscape, Transmeta, IBM, etc for his examples.. Look, I like these companies as much as anybody for their past, but let's face it..

    I could go on, but this article is a big swing and miss.

    • he author's description of IBM's "success" in commoditizing the PC makes NO sense whatsoever

      no, it makes perfect sense, if you read it. he's describing how IBM published the specs to the interfaces so that 3rd party vendors could create plug-in cards. with cards, PCs can do more, making them more valuable in more situations, causing demand for them to increase.

      -c

    • Not the point (Score:4, Insightful)

      by Anonymous Coward on Monday June 17, 2002 @11:09AM (#3715699)
      It's almost ironic that the author pics such dead or dying companies like Netscape, Transmeta, IBM, etc for his examples

      His point wasn't that it was a necessarily *successful* strategy (although arguably Microsoft makes up for all the other failures) - he was just providing the motivation for companies to adopt open-source, presenting the argument that they're not doing it for moral reasons.

      If you think he's wrong about their motivation, go ahead a present a different one. But saying that he's wrong because some of his examples haven't been successful completely misses the point of his article - it wasn't "Why companies should adopt open-source", it was "Why companies *are* adopting open-source".

      Anyway...

      Netscape is trying to commoditize the browser market .. in order to dominate the server market. This would have been plausible in, say, 1997.

      Which is the era which he was talking about...

      IBM is investing in open source software to bolster its consulting services

      IBM spends a *small* amount of money relative to the amount it brings in from consulting... by adopting Linux and Apache, it can bring in huge consulting dollars without spending the money to develop a whole OS or web server. The money is in the skill used to put together the consulting package (ie. web applications with WebSphere, etc.), not in the commodities (the OS and web server, as well as the hardware, in this case).
    • Hmm, IBM is still the largest computer company, Netscape is a part of AOL/Time Watrner, Transmeta is still making CPUs and signing deals for portable devices...

      Just what is your definition of "dead or dying"? What makes a compnay successful?
    • ``IBM's fortune was made in the early 50s by being the king or proprietary''
      While that may be true, being overly closed accounts for some of IBM's (as well as others') greatest failures. Recall PS/2, a brilliant bus architecture that even had Plug-n-Pray-like features. IBM kept specs to itself and would only license stuff for $$$, and PS/2 soon got pushed out of the PC-market by the slightly inferior but open EISA-standard. Another issue was backward-compatibility (EISA is compatible with ISA, PS/2 isn't), and, to be honest, I'm not sure which one was the major factor.

      A similar case was VESA with its VBE/AF standard for accelerated video. They charged $$$ for it, and I know exactly _one_ program that uses it (actually, the Allegro library ), and I think they started using it only after the standard became open. It is sad that the project that provides Open VBE/AF drivers seems to be less than alive.
    • Netscape is trying to commoditize the browser market .. in order to dominate the server market. This would have been plausible in, say, 1997. I find it amazing that he tries to push this by anybody--the browser was commoditized.. and servers turned out to be irrelevant! Where is netscape now?

      No, Joel is right. Back in '95 or '96, Jim Clark said Netscape sell printing presses, but first we have to teach people to read.

      My own take on Netscape's collapse in the server market is that they stretched themselves too thin. Netscape Enterprise Server 2 was an excellent product, fast, stable and flexible. Version 3 of most of their products - and there were a lot of them by now - almost universally sucked, they had been rushed out of the door, and it showed.

      IBM is investing in open source software to bolster its consulting services

      I think Joel's right here - IBM Global Services is what makes the money for IBM, consulting and outsourcing. If IBM can compete on data centre implementation and operations, something they have always excelled at, they can get software for free and hire people cheaply, because sysadmin and programming skills will be commoditized.

      Suddenly, it has what--spent a lot of money for the benefit of all while increasing what it can personally consult on by a whopping 3%.

      Really, contributing to open source is just their approach to learning about how to make open source software work in a managed facility, so they can adapt and maintain it - they could care less about "the community". It's a better way to train their people, letting them cut their teeth in the real world rather than in a classroom.

      Remember, IBM created the PC industry, then lost control of it. They created the relational database industry, and lost control of it. They know a great deal about how to survive and make money in a commoditized environment, and that's on "value add" - i.e. services.
    • by Carnage4Life ( 106069 ) on Monday June 17, 2002 @11:18AM (#3715752) Homepage Journal
      The article tries to build from basic economic principles, but conveniently misses one, the problem of free riders.

      Actually this is not a failing of the article but a failing of the people the article references. Many people like to think that the reason that Open Source is popular among businesses is because it is "free as in speech" which although being a nice fuzzy-feelgood reason is not a BUSINESS reason. On the other hand, trying to commoditize a certain market while making money of off its complement "giving away the razor and charging for the blades" is a well known tactic amongst business types and is something that can fully be brought to bear with Open Source. In this case Joel's article clearly articulates this point with numerous examples.

      However the problem of Free Riders tends to be orthogonal in well executed versions of the "give away razors" strategy. In well executed versions of this strategy, the business is uninterested if the market it has commoditized now has a low barrier to entry as long as there is still a significantly barrier to entry in the market for its complement. Specifically, IBM doesn't care that any Johnny Come Lately can enter the Linux distro business because the same doesn't apply to their consulting or hardware businesses that benefit from the commoditization of the OS.

      It's almost ironic that the author pics such dead or dying companies like Netscape, Transmeta, IBM, etc for his examples.. Look, I like these companies as much as anybody for their past, but let's face it..

      Anyone who considers IBM [yahoo.com] to be dead and dying knows nothing about the current state of the software industry.
    • IBM did really well on the PC. They sold more of them than anyone at the time believed the whole market to be. It was only several machines later that their secret knowledge in putting together the commodity hardware to make the standard interface got reverse-engineered to the point where the PC because commodity. Unfortunately for them, in the business world, "step 3: profit!" isn't the last step; you have to do it again every few years, and it's been a long time since their original success.

      As far as IBM's involvement with OSS, sure, they won't contribute that much to the total corpus of OSS. But IBM can fill in the gaps they care about. Software is always in the state of being just a little bit wrong for what you want (e.g., "I'd love to use it, but I can't stand it if Alt-d doesn't get you to the Location bar..."). IBM wants software which works exactly right in the situations they care about.

      All of the reviews I've seen of linux installations by new people have gone: "It worked amazingly smoothly, up until the part where I tried to get {something} working, at which point I got stuck and frustrated. If I just skipped that step, everything was perfect, but I couldn't use my {something}." If IBM can fix this one thing, the OSS solution their consultants sell will work instead of not working. The customer won't pay 99% for a 99% solution, they'll find someone else who can promise a 100% solution. If IBM contributes the last 1% (in the configurations IBM wants to use), they get the customer instead of not getting the customer.

      Of course, the benefit of using OSS is that IBM can actually work on the 1% that doesn't work, rather than trying to get their direct competitors to fix it.
  • Great Read! (Score:3, Insightful)

    by peterdaly ( 123554 ) <petedaly.ix@netcom@com> on Monday June 17, 2002 @10:39AM (#3715522)
    That's got to be the best Joel on software I have ever read. Not only is it a great discussion of Open Source economics, but it is an interesting read to boot!

    The "make your compliment a commodity" idea is great. Not a new idea, but I have never heard it put that way before, the examples (Flights to Miami vs. Hotel rooms in Miami, etc) make it even better.

    I am not a Joel on software fan. Even if you arn't either, read the article. It will give you great examples of economics to pull out next time someone questions how Open Source can make money and survive.

    -Pete
  • Quite good, but... (Score:4, Interesting)

    by 00_NOP ( 559413 ) on Monday June 17, 2002 @10:50AM (#3715597) Homepage
    A lot of good points, but the Cathedral/Bazaar point is still a good one.

    The argument here seems to be people make free-as-in-beer software because its cheap. But they may also do it because it produces better software (therefore reducing the TOC for the other products).

    These two things are not necessarily in conflict.

    Frankly, I also think that a number of arguments used are pure Aunt Sallys. Has anyone ever really said IBM have converted to communism? If so, which mental institution were they speaking from at the time?
  • Reason for Java (Score:5, Insightful)

    by Colossus202 ( 585193 ) on Monday June 17, 2002 @10:53AM (#3715613)
    Joel says Sun made a mistake in releasing Java, which makes hardware a commodity.

    I say the reason Sun released Java was to allow all the Windows app programmers to make apps that work on SPARC chips and Solaris as well as Windows.

    It was a strategy of weakness, a "Me too" strategy. Not aimed at promoting their hardware, but demoting the more numerous boxen of their competitor.

    *And* demoting their competitor's OS, which also had far more apps.

    And Microsoft was very afraid of this possibility.

    Still is (C#, anyone?).
    • Re:Reason for Java (Score:3, Insightful)

      by nuggz ( 69912 )
      I agree, Sun wants to break inertia with MS Windows and Intel/AMD. If people are stuck on buying MS solutions there is no way Sun is even in the picture, they have to fix that before any sales.

      Once Sun is a contender they can begin to compete and leverage their reputation and product advantages. Computer hardware is a commodity, in about the same way cars are.
    • then you actually would be able to write an application for Windows, Linux and Solaris all at the same time. And have people use it. People do it ( I'm one of them), but it's not for the general public consumption yet.

    • Re:Reason for Java (Score:4, Insightful)

      by namespan ( 225296 ) <[namespan] [at] [elitemail.org]> on Monday June 17, 2002 @12:29PM (#3716243) Journal
      Java mostly looks like a solution looking for a problem. It originally was a language for delivering services over an interactive television like product. They realized the web was getting close. So they released it.

      I don't think the WORA aspect of the product fit into a larger strategy for a while. Then they came up with "the network is the computer".... the network delivers code that can run on any computer, and services that run on high powered hardware. Who sells the hardware that delivers code and services?

      Sun.

      I think the commodotize your complement analysis is brilliant, and I appreciate being exposed to it, but like all principles and theories, its application is the trick. How many times in physics did you misapply a correct physical principle? In Econ, it's even easier.

      And we also operate in a world where no one principle is the end of the story.

      Sun's strategy is half-baked, but not as much as Joel thinks it is.

  • Who is he quoting? (Score:3, Insightful)

    by catfood ( 40112 ) on Monday June 17, 2002 @10:53AM (#3715615) Homepage

    Joel "read me I'm the next Jon Katz" Spolsky wrote, inter alia:

    Headline: IBM Spends Millions to Develop Open Source Software.

    Myth: They're doing this because Lou Gerstner read the GNU Manifesto and decided he doesn't actually like capitalism.

    Headline: Sun and HP Pay Ximian To Hack on Gnome.

    Myth: Sun and HP are supporting free software because they like Bazaars, not Cathedrals.

    Where does Spolsky get these myths? Does anybody seriously believe that Gerstner has gone all hippy-love on his shareholders? Has anybody published the idea that Sun and HP are ideological converts to Free Software? Does this even past the "huh?" test?

    The "myths" are straw men, uncited, unsupported. Without them, what is Spolsky saying? That businesses use Open Source for... business reasons? That wouldn't be much of a story, would it?

    Move along, nothing to see here. Proving you're smarter than people who don't exist by making up their positions and knocking them down isn't much of an exercise.

    • by Junks Jerzey ( 54586 ) on Monday June 17, 2002 @11:26AM (#3715802)
      Where does Spolsky get these myths? Does anybody seriously believe that Gerstner has gone all hippy-love on his shareholders? Has anybody published the idea that Sun and HP are ideological converts to Free Software? Does this even past the "huh?" test?

      They're mild parodies of what seem to be mainstream views on Slashdot. You'll find lots and lots of people arguing, for example, that record companies are evil and all music should be given away free. People *love* to hear that IBM is doing work to support Linux, but that the same time don't remind them that IBM is a business. They don't want to hear that. They like to think that IBM is doing this out of the goodness of its heart.

      In general, Slashdot represents the ideal of college students without much disposable income.
      • Huh? (Score:4, Insightful)

        by DG ( 989 ) on Monday June 17, 2002 @12:44PM (#3716399) Homepage Journal
        I don't think even the most rose-glassed optimist thinks that IBM hase jumped on the Linux bandwagon so enthusiastically out of "the goodness of their own heart"

        OF COURSE IBM is doing so out of a business/profit motive. I defy you to find any actual person who thinks otherwise.

        But the point is, it doesn't matter what IBM's motivation is - as long as IBM plays by the rules that govern Free Software, everybody benefits (including IBM)

        Do I care if my neighbour acts nice to me because he likes me, or if he's buttering me up for future favours, or because his God commanded him too and he's in fear for his soul if he does not? No. All that matters is that he be a good neighbor.

        And there is every indication that IBM is a good neighbor to Free Software.

        The news flash here is that IBM has managed to convert itself into a company whose business plan is based around contributing to the common good, rather than locking everybody into proprietary, IBM-only solutions, as had been their modus operendi for the previous 40 or so years.

        DG
    • SFAIK,
      Sun are intending to use GNU tools for there Unix.
      because GNU is now more-or-less de-facto Unix standard.

      Now all Sun need to do is change there name to UNG and everything will fit perfectly inplace.
      Now if HP were to use GNU then maybe there Unix wouldn't have buffer limits of cat etc.....
    • I think it's still quite useful to know exactly how Open Source provides business benefits for IBM. Both so the model can be replicated, and so IBM's involvement can be better understood. If you know why your business partner wants to do something, it will help you make better descisions as to how to make their involvement work well for you too.

  • by toriver ( 11308 ) on Monday June 17, 2002 @11:05AM (#3715670)
    Nice article, until he comes to Java and Sun at the end, then he misses.

    1) Java wasn't made from a hatred of Microsoft. Heck, they event contracted Microsoft to handle the Windows implementation of the spec (before Microsoft decided to violate the contract).

    2) Sun make implementations for Windows (for the market share) and Solaris (their stuff), because Java is software and Sun is a hardware company that coincidentally also makes software.

    The Solaris platform already was semi-crossplatform in that it's another Unix: If you write software that will run on Solaris it can be modified to run on most other Unixen.

    So why didn't Sun go the Apple route and make a totally proprietary and closed architecture and operating system? The same reason Apple left their "route" and embraced BSD, PCI and whatnot:

    Because proprietary sucks.

    If you're the only one going your way, you end up taking all the chances, doing all the work and become your own "weakest link".

    If you go with published specs, open standards and shared source, you will get competition, yes, but you will also get better quality though that competition, and you will be able to benefit from the work of others, because you can more easily understand what they do, and be able to match their features.

    You win.
  • The basic idea of the article is that if you can make the total cost of entry for some product lower by reducing the cost of one of the product's components, you can charge more for the components that are left. If you're smart, you get the price down for these compliments that you don't control so you can up the price of the services you do.

    So if PC hardware is cheap, more people can afford the price of entry and you can charge more for the OS (eg, Windows). If enterprise OSs and software are cheap, you can charge more for your consulting services (eg, IBM).

    Why is Mozilla "cheap"?
    [Given that IE is free, what is the incentive for Netscape to make the browser "even cheaper"? It's a preemptive move. They need to prevent Microsoft getting a complete monopoly in web browsers, even free web browsers, because that would theoretically give Microsoft an opportunity to increase the cost of web browsing in other ways -- say, by increasing the price of Windows.]

    Java does exactly what Sun *didn't* want:
    [If you can run your software anywhere, that makes hardware more of a commodity. As hardware prices go down, the market expands, driving more demand for software (and leaving customers with extra money to spend on software which can now be more expensive.)

    Sun's enthusiasm for WORA is, um, strange, because Sun is a hardware company. Making hardware a commodity is the last thing they want to do.

    Oooooooooooooooooooooops!]
    • IMO, java is the way it is because Sun wants you to entice you with switching to their HW. They saw that many many people were writing windows applications and that windows applications would never be easily ported to their hardware. So in order to increase the sales of their HW, they wanted to reduce the cost of entry to their platform. Creating java and making it popular increased the chance that their HW would be bought.
      Since Java is 'fastest' on their new SunFire servers (the top end model has like 106 procs), they get you to code/develop your app on your PC, then when you want more power, you go to their servers.
      How well this plan has worked is debatable, but that's my opinion that the author has missed when talking about Sun.
  • by TweeKinDaBahx ( 583007 ) <(ude.tmn) (ta) (keewt)> on Monday June 17, 2002 @11:23AM (#3715781) Homepage Journal
    Finally, somone who stood back and took a long look at the realities of the software industry.

    For those of you who either slept through or didn't even take an economics class, this article provides enough of a basic intro into micro/macro economic theory to not only allows the author to make some fairly advanced points, but also to allow the reader to fully understand some of the greatest misconceptions surrounding the OSS movement as well as modern computer-based industry as well.

    One of the biggest points that I think the author made in his article (without saying it directly) was that OSS programmers are not business analysts. Sure, what seems very simple and straight forward, free software, sonds like a good idea, but I'm glad the author pointed out that while the software my be 'free' there are many costly issues and circumstances that surround such software, such as re-training (sorry kiddies, most business-people have no desire or will to RTFM, so the reality that is created is costly training seminars), support (since it's open source, other than usenet and a few other forums, there is no free support availible, which means someone has to foot the bill to get one of you LUNIX D0oDz out of your mama's basement and into the server closet), hardware costs (yeah, linux and other OSS support SOME hardware, sometimes even cheap hardware, but not ALL hardware), and of course incompatibilities with exdisiting systems.

    With all this build up, even the cost of the systems analysis for a change to OSS becomes prohibitive.

    To expand on the author's analogy of chicken to beef (chicken being OSS and beef being something proprietary); sure, the chicken might be free, but in this situation, you have to butcher the chicken yourself and hire a chef to prepare it for you, whereas you can simply walk up to a the counter and order a hamburger.

    It's what it keep saying over and over again: No one wants to have to re-invent the wheel to get the job done, and as per my own experience, using Linux in a non-technical environment is like trying to invent the shelby cobra when all you have to work with is a dull bronze chisel and a little water.

    • by Tony ( 765 ) on Monday June 17, 2002 @12:13PM (#3716125) Journal
      To expand on the author's analogy of chicken to beef (chicken being OSS and beef being something proprietary); sure, the chicken might be free, but in this situation, you have to butcher the chicken yourself and hire a chef to prepare it for you, whereas you can simply walk up to a the counter and order a hamburger./I.

      Uhm.... Bullshit.

      The secondary costs of installing and using MS-Windows is about the same (or perhaps more) than installing and using Linux. That, coupled with the primary costs of using MS-Windows (licensing and media fees) puts MS-Windows at a higher cost than Linux.

      To extend *your* extension of the analogy, it's like you can walk into a diner and order a hamburger, or you can get a chicken sandwich for a couple of bucks less, because the chicken costs the restaraunt nothing.

      This idea that MS-Windows has no secondary cost because it has a primary cost is stupid.
      • TCO (Score:3, Informative)

        by Gleef ( 86 )
        Tony writes:

        The secondary costs of installing and using MS-Windows is about the same (or perhaps more) than installing and using Linux. That, coupled with the primary costs of using MS-Windows (licensing and media fees) puts MS-Windows at a higher cost than Linux.
        ...
        This idea that MS-Windows has no secondary cost because it has a primary cost is stupid.


        Yes, and to add some figures behind your statements, Paul Murphy [winface.com] has done some extensive TCO studies of Windows vs Various unix systems, and found that in many cases, a sanely configured Solaris solution (far from the bargain basement of the *nix world) can often save over 60% compared to the comparable Windows solution. The real world numbers are likely even more slanted towards Unix, because he leaves out the expensive hardware replacement that Windows pushes on you to keep running their software.
        [linuxworld.com]
        A strategic comparison of Windows vs. Unix, LinuxWorld, October 2001
  • by javilon ( 99157 ) on Monday June 17, 2002 @11:27AM (#3715814) Homepage
    What I most like of this theory is that hardware is a commodity today. If open source can turn software into a commodity, the real value will be in the people putting systems together (as the IBM example shows).

    Most of the slashdot crowd are technical heads so I would say that it is in the best interest of most of us to get GPL'd stuff working, with the possible exception of packaged closed software developers, about 5% of all developers.

    This way the money will go to us, instead of CEOs or marketing departments.
  • Thanks for the basic economic lecture, Joel. While I hardly consider your big two intro economics classes impressive, your thinking is clear. It should be, the concepts you dwell on are simple enough.

    It's presumptious of you, however, to tell us why IBM, RMS, and everyone and their dog is doing what they do. The spin is a little nausiating. Let's examine some of the nasty ones:

    At this point, it's pretty common for people to try to confuse things by saying, "aha! But Linux is FREE!" OK. First of all, when an economist considers price, they consider the total price, including some intangible things like the time it takes to set up, reeducate everyone, and convert existing processes. All the things that we like to call "total cost of ownership."

    What confusion? You forget that studies consistently prove the lower cost of ownership of free software? Not that it's what I tell people. I generally point out freedom, control, security and then cost. Now I see the confusion, it's a straw man. What else does this silly Sallmanist say?

    Secondly, by using the free-as-in-beer argument, these advocates try to believe that they are not subject to the rules of economics...

    Wrong again! If you keep economic priciples in mind while reading free software organization pages, you will note and remember many economic reasons offered support software freedom. It's the makers of propriatory software that would like to make themselves beyond the reach of economic laws. They attempt to do this by abusing copyright and patent law, and engaging in other anti-competitive behavior. RMS rightly noted that the results of such behavior is economic waste in the form of double work and the inability to use software as you would.

    The rest of the article is inconsequential after the false frame work has been applied. Free software advocates are not ignorant of economic laws and one of the main advatages to free software is lower total cost of ownership. Only propriatory software concerns have a financial intrest to deliberatly waste the efforts of users.

    • There is truth in your comment. But you devalue it by not providing examples, and making even more unsupported claims than Mr Joel.

      "...studies consistently prove the lower cost of ownership of free software."

      Really? Which software and which studies? Compared to which propreitary applications? I can believe Apache is cheaper (not to mention better) than IIS. But what about Star Office vs MSFT Office? Is this a study of technically proficient users, or not?

      "The rest of the article is inconsequential after the false frame work has been applied."

      OK. Now that is frankly ridiculous. Even if you disagree with some of his comments about OSS, that does not make the rest of the article meaningless. Indeed, the rest of the article is thought provoking, and contains more than a sliver of truth. (Ie, IBM wants OSS to be a success because then it can make money running your Apache server for you.)

      It seems there is way too much religion in your post: "if you point to flaws in the OSS model [which I don't believe his does] then you must be against OSS. and those who are against OSS are ignorable."
  • by madro ( 221107 ) on Monday June 17, 2002 @11:45AM (#3715933)
    The article offers some neat ideas about the strategic area various companies focus on ...
    • HP: hardware, I guess (after merging with Compaq, I don't know what their strategy is -- I hope they're planning on more than economies of scale chasing after commodity hardware markets)
    • IBM: long ago it was PCs before Microsoft changed the rules on them. Now it's consulting, and they're hoping to press forward by helping everyone implement 'free' software solutions in a way that improves business bottom lines. HPQ has a lot of catching up to do if it wants to beat IBM at this game.
    • Microsoft: Windows and Office has carried them far, but now it seems like their strategy is to throw stuff at the walls and point to whatever sticks and say, "We did that -- we're still innovative and capable of leading the industry." XBox, set-top boxes/Ultimate TV, mobile phones, PocketPCs, embedded Windows ... sheesh. On second thought, I guess they deliver value by making sure whatever they do integrates well with their monopoly product. It worked for AT&T, for a while. But people finally got tired of it.

    Apple has the right idea. Their current ad campaign talks about switching -- how you can do the same things on a Mac as a PC, except on a Mac it's easier. This tries to make software a commodity while keeping the UI separate (not the core OS, Apple wants that to be a commodity, too). It also emphasizes that it's easy to switch -- low switching costs are really, really important.

    Apple's core advantage is the amount of integration it can offer between hardware and software. It looks like they're trying to de-emphasize anything that's purely software (unix, apache, browser, for sure ... but office suites and other applications, too) in favor of solutions that require hardware and software to work together well (iPhoto and digital cameras, iTunes and iPod, Airport's WiFi support).

    The only problem is that Apple is still going it alone on some of their hardware components -- maybe because they've decided they can't make money trying to offer the same ease of use and integration across so many possible hardware configurations. Such a task either represents a real opportunity for the open source community, or a black hole of wasted effort trying to keep up. I'm not really sure which.
  • by KjetilK ( 186133 ) <kjetil@kjePARISrnsmo.net minus city> on Monday June 17, 2002 @11:54AM (#3715987) Homepage Journal
    Well, many of Joel's myths are straw men, but I think he ignores some important things in his eagerness to tell us that it isn't about freedom.

    The point he misses is that freedom is good for economy too. Freedom is what makes the jump onto the bandwagon a no-risk jump. Freedom is what makes the legal implications so clear, that you're not risking a lot by joining. When HP chose Debian as their basis for Linux development, it was because of the pains Debian developers go through to make sure their distro is truly free. It makes it very FUD-resistant, and that is something very important.

    Why is it that people often assume that whats good for freedom is bad for economy, and whats bad for freedom is good for economy? While most of the IT industry may think that way, it doesn't need to be so.

  • Software companies think they can get Java developers right out of school for half the salary they would have paid an experienced C/C++ developer to write software just as efficient, in half the time!
  • I think that it really hit the nail. I am sure the slashdot community will bitch their asses off because what Joel wrote, or try to make fun of him and thus making him go away. I was very impressed what with he wrote, and it makes a lot of sense.

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