Additionally, I can say I’ve found open source software to be disappointing – unless you consider Mozilla Firefox to be open source. It’s free and fine ware.

Geoff Dodd
Australia

I am just curious, how are you guys making a living? Are you paid programmers of OSS companies? If you are, I bet these companies have business model themselves. They just have different business models, like selling support instead of selling the software itself, or selling the hardware the OSS runs on.

Truth is, software development is not possible with cash / financing. People and businesses that develop software must find a way to finance their development. If you are a volunteer programmer, you either must have a day job or ask people for grant or donations. Either way, your ‘business model’ goes like these “I’ll work on these OSS project at night / weekend, but I’ll work for AAA as an employee so I can pay the bills, etc”.

Software Developers who sell their stuff most likely have something like these “I’ll develop these software, then users can use them for a fee.”

Shareware Business has little difference from traditional brick and mortar businesses. You develop a product, you sell it. To compute how much you want to sell your product: PRICE = (OVERHEAD + PROFIT) / NUMBER_OF_ITEMS + MARGINAL_COST.

The main difference I think is only the fact that the marginal cost of each product is so low or almost zero. The bulk of the cost is in the overhead (development cost). Implications? Like all businesses with low marginal cost and high overhead cost, you could be very successful or you can fail.

BTW, even if a software still sells for 10 or 20 years or forever with zero development and marketing (how it could be??), you compute the Net Present Value of all the revenue. That means a revenue of $5000 a year for the next 20 years doesn’t earned

Some of these companies are OSS companies, or at least companies admired by OSS community (I should know, I am a part of it):
1.) REDHAT – Sells subscription based support for a distribution of their Linux. Even though REDHAT LINUX is OSS, it is awfully though to get one. In no small part to efforts of REDHAT. See, if you subscribe to their OS support, part of the support contract forbids you to distribute and install the OS on more machines. So much for FREE as in FREEDOM.
2.) Google – Google support OSS by directly by the google code project (sponsoring approved projects and paying its developers) and other indirect means. This is nice. But has anyone of you got their source codes for their of engine? of their clustering architecture?
3.) IBM – IBM helps the community by direct funding of OSS projects and OSDL, releasing its patents for OSS use, etc. Hey, IBM just sued Amazon for one of its patent, and receving $1billion a year for patent licensing. So much for ‘sharing your intellectual property so other people can use it’.

Point is, these companies are not evil. Like all companies, they must earn money and must protect their competitive advantage. OSS and commercial softwares can coexist. A pragmatic person must choose which model will be more appropriate. There is no problem with that. The problem starts when one starts shoving his model / idealogy down somebody else throat.

B. You should be ashamed of yourself for making shareware. Denying all other users the freedom to use your software freely (as in freedom) is sinful and plain wrong. Regardless your software is simple and trivial, it isn’t worth the money and I feel sorry for anyone who paid for your product and didn’t get the source code.

So continue to talk out of your ass, it isn’t like slashdot isn’t used to it.

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Yeah, that’s the problem alright. It’s them darn programmers expecting to make a living doing something that’s so simple that most of the population can’t do it. You’ve been watching too many RoR demos.

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This is also the proper way for plumbers, artists, farmers, and mechanics to be paid. There is one little snag though. You may not be old enough to remember, but they tried this a while back and the result was people waiting in line for days for a loaf of bread and some milk. You’ve obviously thought of something they didn’t though, so please, do share your wisdom. Meanwhile, i’ll just have to live with the (obviously inferior) free market approach, where value-provider and value-receiver have to work out the details of how and how much is paid for a product without the government to act as a custodian. (There are so many problems with the model that you suggest that a whole book could be written on the subject, but I digress)

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90% or more of open source software is incredibly hideous, especially in the usability and documentation departments. There are good reasons for that, some of which Patrick covers here:

http://microisvjournal.wordpress.com/2006/08/23/open-source-vs-uisvs-some-myths-that-need-to-die/

Regarding Mercury’s post:

You my friend are the one who missed the point. Any programmer unable to come up with “free/libre != free/gratis” on their own has been living in a cave for at least the last decade. Here is a couple more for you from my original post:

Freeloaders != Open Source
Freeloaders == those wanting to benefit from everyone else’s work without giving anything in return

This is, in fact, what you want. You just won’t come out and say it. The real reason you, Franko, and many others want so badly for ALL software to be open sourced is so that you can use any program you please, without having to pay for it, and not feel guilty about pirating it.

It’s a sense of entitlement expressed as a complete disregard for the countless hours of preparation, money, and work that go into creating, promoting, distributing, supporting, and maintaining a product. All of this effort is rationalized away to naught with a simplistic argument about how the cost of duplication (which is not zero, even for a bits and bytes) should be the only recoverable cost of doing business. And heaven forbid that anyone should be able to make a profit from selling the goods you consume. (This is like arguing that a car dealership should only be able to charge for the cost of materials on the cars they sell)

Creating anything of value (physical or digital) and putting it to market requires an investment of time (for preparation and production), money, or more often, both. Just as with an investment in the stock market, an investment in creating a program involves risk – sometimes LOTS of risk. The only way to get people to take these risks is if there is sufficient incentive to do so. Usually the incentive in this case is the possibility of higher returns than say, working for McDonalds.

Your assertion that 2000 hours invested in a product is worth some arbitrary value approximately equal to one year’s salary shows a complete lack of understanding not only of the effort involved in running your own business, but also of basic free market economics. If you’re punching a timecard every day and getting a regular paycheck, you are effectively accepting a lower return (your salary) in order to reduce your exposure to risk. If you’re a consultant, there’s a possibility that you’ll have many more gaps between paying jobs (risk), so consultants get paid more. If I decide to create a program to sell, the risk may be orders of magnitude higher. Let’s say I have to invest 2000 hours (1 yr, full time) plus operating expenses for that year (rent, food, etc), and I have no monthly paycheck coming in and no guarantee of any return at all. No sane person would make that kind of investment, with that much risk, without the potential for higher returns than those same 2000 hours invested in a full time job with an almost. This is not freeloading; it’s supply vs. demand and risk vs. return – the same principles that drive everything from produce prices to stock prices to interest rates on car loans.

This also helps explain why open source software is usually of much poorer quality than equivalent commercial software. Creating high quality software, and everything that goes with it, can take a huge amount of effort, even for a fairly simple program. It’s the rare open source project where there is sufficient incentive for contributors to invest this level of effort. The few exceptions to this rule are almost always that way because they are used as a loss-leader for something else.

Paul Grahm has a very good essay that, while not really addressing commercial vs. open source, certainly explains why the extremes you suggest would kill or at least severely dampen innovation in software or any other industry:

http://www.paulgraham.com/wealth.html

The section titled “The Pie Fallacy” is very relevant to your misconceptions about commercial software and freeloading.

1) It is now the case that once reduced to digital form, pretty much anything can be distributed everywhere at effectively zero marginal cost. This did not used to be true, and it was very much less true the further back you go. All indications are it is becoming increasingly true as time passes.

2) Copyright has been retrospectively extended so that it’s now effectively perpetual, and digital restrictions are being imposed to enforce it. If this were not the case, if there were not DRM and if copyright expired in a reasonable time (say 7 years, given the fast-moving reality of development today), then I would take some of the arguments favouring copyright and ownership thereof more seriously than I do at present.

Point (1), however, means that to all intents and purposes an idea is no longer distinguishable from the expression of that idea in some fixed, recordable, copyable, and distributable form (with or without modification). That didn’t used to be the case, not in the same way.

Here’s a free clue: you can’t own an idea. The moment you communicate it, you lose control of it. That’s what’s happening to software, and to other media as well.

The question is not how you prevent that, which is the intention of the digital restriction mentioned (2) (can you stop the tide, King Canute?), the question is what business models are going to work in this new environment.

Free/libre software is one model that seems to work; paid-for custom software as it already exists seems unaffected; grant-based basic research might be another, and there may be more. Proprietary, closed development, however, doesn’t seem to be coping in this environment.

As for the canonical dragon story, I don’t know so much about dragons but you could say that epic fantasy as we know it took off from the roots laid by William Morris in the 19th century with the Wood Beyond the World and The Well at the World’s End; Tolkien and later exist in the shadow of and draw on Morris’s ground-breaking work.

Interestingly, Canonical is the name chosen for Shuttleworth’s company which is spearheading a renaissance of open-source software for Everyman; it is not for no reason that this is so.

Incidentally: can I get a download link to the time synchronizer that completely and for all time solves time synchronization problems for all users?

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But the need for even worrying about that issue of how to pay programmers is already past, as virtually all software anybody would need already exists and is open source.
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And it all runs in 640 kb of ram, too!