Re: Charging the Charger [was: GPL v3 public performance idea?]

At 03:12 PM 5/1/2005, Laurent GUERBY wrote:
>On Tue, 2005-04-12 at 09:22 -0400, Marshall W. Van Alstyne wrote:
> > In a version of the model we're developing, we can consider the proportion
> > of developers who are freedom versus profit motivated and this does 
> seem to
> > change the kind of license that becomes optimal.
>
>Only about 10% of IT people are concerned by your licence optimization
>scheme (those who work for software editors), the remaining 90% don't
>care that much about licencing since they develop, glue, administrate,
>deploy, customize software for only one customer, either their employer
>or in an out-sourcing setup, or are selling consulting or support.

Hi Laurent, sorry for the delay -- been travelling.

I'm pretty sympathetic to this observation but I think that F/OSS biz 
models will grow faster whey they take full advantage of market forces, 
especially _price_.  By itself, focusing on the concerns of IT folks alone 
misses two important ideas.

First, IT people clearly do matter, a lot, but they're not the _only_ force 
that matters.  The most important omission is the capital markets e.g. 
banks, VCs, and even interested companies.  They'll put $ in if they can 
also get $ out, but this depends on being able to charge.  They are likely 
to put even more $ in, if the charging mechanism is clear.

Second, "developing, administrating, customizing etc." for only one 
customer loses a huge opportunity.  This doesn't scale nearly as well as 
selling packaged solutions.  Gates didn't get to be richer than Croesus by 
doing one customer at a time.  Arguably, a variant on the IT staffing 
argument is that most software costs are maintenance, so a biz model that 
reduces these costs should be successful.  But profits = revenue - costs, 
so I'd argue that, of course cutting costs is important! but if that's all 
we do, then we miss a real opportunity by forgetting the other half the 
equation.

>>  But innovation happens less if you can't charge for the value of your 
>> innovation.
>
>Now, for a software ecosystem, what's giving more to customers, many
>small incremental innovations or "innovation" as a complete new product?

Both are important!  I haven't seen a systematic study but I'd bet that if 
you were to list the most important _first_ product in any given category 
(e.g. word processing, spreadsheet, operating systems, etc.), a majority 
would start out as non-free software.  Why not harness these market 
incentives and add them to the mix?

MVA