Re: GPL and economics

On Mon, 17 Jun 2002, Roland wrote:

> I was just reading this article 
> http://www.joelonsoftware.com/articles/StrategyLetterV.html

Yeah, I thought that article was an interesting juxtaposition to this 
discussion too...

> quotation:
> "Reality: They're doing this because IBM is becoming an IT consulting 
> company. IT consulting is a complement of enterprise software. Thus IBM 
> needs to commoditize enterprise software, and the best way to do this is by 
> supporting open source. Lo and behold, their consulting division is winning 
> big with this strategy."
>
> I think the same applies for programmers. By commoditizing software you 
> will increase the opportunity for those who tweak it or do consulting. So 
> we as programmers can also win big time. Maybe even more, because as long 
> as software is proprietary it will be not a commodity. In proprietary 
> software only those earn who happen to be employed in one of the 
> successfull software companies. If the software is a commodity, everyone 
> can participate in it.

Enterprise software may be a special case.  Large companies use enterprise 
software, and those are the companies who can afford to pay consultants to 
do custom tweaking.  While I agree this is an effective strategy when it 
comes to enterprise software, I don't think we can conclude that it's going 
to necessarily be transferable to other types of software, no matter how 
well it may work for IBM in this case...

After all, what end-user is going to pay consulting rates to have someone 
tweak their word processor?  Most people will just live with deficiencies.

> As an analogy from hardware think about Apple and PC. Only Apple can make 
> money of Apple hardware, although they make more money as people from PC 
> Hardware. On the other hand anyone can make money with PC hardware, 
> although each company makes less money.

The people providing the commodity don't tend to make much money -- the 
point of the article you quoted was that commoditizing the complements of 
what makes you money will help increase the demand for your money-making 
complement, as well as leaving the customer more money to pay you with.

If we commoditize end-user software, it will save users some money, but 
that doesn't necessarily mean that they'll spend it to pay programmers to 
work on that commodity code.  While consulting is a natural complement to 
enterprise software, it may not be for other types of software.

Deven