Re: A Linux Today story has been mailed to you!

[Pavan K Balellugari <pavkb@xxxxxxxxx>]

Hi Suresh,
     Thanks for brining this article here.. i had
never read an article that was as well written as this
one.

     So the question still remains that, how do people
make money out of opensource??

Thanks again

Pavan
--- Nobody <nobody@xxxxxxxxxxxxxx> wrote:
> 
> 
> This message is sent to you from 
> Linux Today (http://linuxtoday.com)
> ----------------------------------
> Suresh Ramasubramanian, mallet@xxxxxxx has requested
> that we send you this article.
> You can find this story online at:
>
http://linuxtoday.com/news_story.php3?ltsn=2001-04-12-006-20-OP-BZ-CY
> 
> Suresh Ramasubramanian adds: This is an excellent
> article - thought I\'d share it with y\'all.
> 
>         -s
> 
> ----------------------------------
> 
> Ganesh Prasad: Open Source-onomics: Examining some
> pseudo-economic arguments about Open Source
> By Ganesh Prasad
> 
> 
> 
> 
> Synopsis:
> While the technical arguments against Linux and Open
> Source are being gradually silenced,
> several unrefuted myths about the economics of Open
> Source continue to float about,
> confusing and scaring off people considering these
> alternative products. Worse, the Open
> Source community is itself divided on such issues,
> and is unable to provide a cogent
> rebuttal. This article is an attempt to set the
> record straight.
> 
> 
> Contents
> 
> 
> "The poor performance of Linux stocks proves that
> Linux is a failure"
> "Open Source is not economically viable"
> "Not paying for software will ultimately kill the
> industry"
> "Why will programmers continue to contribute code if
> they can't make money from it?"
> "Even Open Source development involves effort, so
> there has to be payment for that effort"
> "Are Open Source programmers writing themselves out
> of their jobs?"
> "But free isn't natural. There's no such thing as a
> free lunch."
> "Is software a commodity?"
> "Who will invest in software development if it
> doesn't yield a return?"
> "Open Source may have a niche, but proprietary
> commercial products will continue to rule"
> "Customers will never trust something that is free"
> "Open Source may release value, but it doesn't
> create value"
> God, Government, Market and Community
> Conclusion
> References
> About the Author
> 
> 
> 
> "The poor performance of Linux stocks proves that
> Linux is a failure"
> 
> What's the relationship between the performance of
> Linux stocks and Linux's own prospects of
> success? When stocks of companies like Red Hat and
> VA Linux Systems skyrocketed in the wake of
> their IPOs, that was taken as an indication that
> Linux had arrived, and Linux advocates said
> nothing to counter the impression. Indeed, many
> gleefully used the stockmarket to show their
> peers that Linux was to be taken seriously. So now
> that the same stocks are trading far below
> those prices, doesn't it indicate that the Linux
> shine has worn off? Look at the number
> of Linux companies in the doldrums, that have laid
> off employees or closed down. That certainly
> seems to indicate the end of Linux. It was a great
> idea that failed to deliver on its promises,
> and we should now go back to software and companies
> that are more firmly grounded in economic
> realities, right?
> 
> 
> Well, first of all, Linux is quite independent of
> Linux companies in a way that the market has
> never seen before. Windows means Microsoft, Netware
> means Novell, OS/390 means IBM. The fortunes
> of operating system and company are usually heavily
> intertwined. That's simply not the case with
> Linux. If Novell closes down, that pretty much means
> the end of Netware, unless another company
> sees fit to buy the product and keep it alive (On
> the other hand, Microsoft may simply choose to
> buy Netware and kill it!). Such things can't happen
> to Linux. As an Open Source operating system,
> Linux is teflon-coated against the commercial
> failures of the companies that try to build business
> models around it. Commercial entities are
> Johnnies-come-lately to Linux anyway. Linux managed
> without them for years, and will continue to exist
> even if they should all disappear.
> 
> 
> In fact, companies that claim to support Linux are
> wrong -- Linux supports them!
> 
> "Open Source is not economically viable"
> 
> 
> OK, so Linux as a technical product may continue to
> exist, but if companies cannot make money from
> it (as is seemingly evidenced by the woes of the
> Linux companies today), then it's another great
> technical success that is a commercial failure.
> History is littered with such examples. Linux will
> never go anywhere unless people can make money off
> it.
> 
> 
> Now here's an argument even Open Source sympathisers
> have trouble with, -- the assumption that money
> must be made for Open Source to succeed. However,
> the argument is incomplete because it chooses
> to concentrate on the supply side alone, without
> regard to the demand side.
> 
> 
> While it may well be true that no one can make money
> from Open Source, that should only serve to
> discourage suppliers of software. On the demand
> side, however, consumers are saving
> tons of money by using Open Source. Since a penny
> saved is a penny earned, there is a strong
> economic basis for the success of Open Source after
> all. Someone is saving money, and they will fight
> to keep those savings.
> 
> 
> The demand side is the one that should drag the rest
> of the market, kicking and screaming, to a
> regime of drastically lower prices. Vendors will see
> their margins shrink, many will close down,
> newer, leaner ones will spring up, vendors in other
> market segments will provide software, and
> eventually, the market will adjust itself to the new
> reality. Dollar volumes will go down even
> as unit volumes go up. The transition could be quite
> painful for suppliers of software, but no
> law of economics says it cannot happen. It is not a
> law of nature that vendors must continue to
> make the revenues and profits they are used to.
> 
> 
> "Not paying for software will ultimately kill the
> industry"
> 
> There are the long-term worriers who don't like this
> scenario at all, even as they accept that
> it may happen. Yes, they say, customers will save
> money in the short term, but they're eating their
> seed corn. Customers need financially healthy
> vendors to be around to support them and continually
> improve their offerings. A herd of gnu may be happy
> at the disappearance of the local lion
> population, but the herd needs predators to cull its
> ranks of the weak and the sick, and
> to keep its gene pool healthy. Saving money by
> starving your suppliers is not in your own
> long-term self-interest.
> 
> 
> This is a strange suggestion from people who
> probably describe themselves as market capitalists.
> When customers make a purchase, should they think
> about their own savings or should they worry
> about the supplier or the economy? Is it reasonable
> to ask them to choose costlier products because
> that will ultimately and indirectly serve their own
> interests? The argument smacks more of Marx
> than Adam Smith, -- The State above the individual.
> 
> 
> This was the convenient argument of horse-buggy
> manufacturers when the locomotive arrived, and of
> the railroad companies when the aeroplane appeared.
> We've seen this dozens of times in our history.
> A generation of suppliers is threatened, and they
> try to convince the rest that society as a whole
> is threatened. If history is any guide, consumers
> will make the decisions that suit their immediate
> interests, and vendors will have no choice but to
> adapt as best as they can. Those decisions may
> 
=== message truncated ===


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