Free software may kill some software firms. So what?

Free software may kill some software firms. So what?


Some people who advocate against free software claim that it's bad for the economy and not sustainable in the long term, because the lack of direct revenue on developing free software makes it harder to make money out of developing such software. If generating direct revenue out of software development is not possible, they claim, then less people will be inclined to write software professionally. In turn, this will mean that end-users will have less high-quality software available. Is that really true? Let's find out.

Revenue, and money as a motivator

First of all, the statement that free software generates less direct revenue is probably true. Obviously, by giving your software away at no cost, it's not as easy to make a buck as it is when you charge people for using and copying your software. And it is indeed true that money can motivate people to do interesting things.

But this is only true to a certain extent—if the employee wages and other costs for the extra time and effort required to fix one particular bug in a piece of software will cost a developer a multitude of the extra revenue generated by fixing this particular bug, then money suddenly is no longer a motivator. Obviously, the lack of profit won't mean that the bug will not get fixed at all—there can be other things to motivate a developer apart from money. However, other motivational factors, such as making a name and improving one's image, exist for free software developers as well, so it's not really an argument against free software.

Additionally, of course, the fact that it's easier to generate revenue with proprietary software doesn't make it impossible to do the same with free software; examples can be found when looking at companies like IBM, Sun, and Red Hat, who do get some revenue from free software (although none of them provide free software exclusively).

Quantity and quality

Another argument may be that because of the more convoluted business practices required to do business with free software, there will be less software developing firms that create free software; and that, as a result, there will be less software available.

No doubt, this is also true. But quantity does not equal quality; when I last went to a shop where there was computer hardware to be had, I was surprised to see a box with the game of "mahjongg"—a game which is an almost ubiquitous part of every Linux desktop since quite a few years—to be on offer for the price of €29.99. When browsing sites such as download.com or tucows.com that specialize in shareware and other proprietary downloads, I am often appalled by the sheer volume of crap which is available on such sites—not to mention the fact that there are often many competing programs available that do exactly the same thing, but are written by different companies. Obviously, these programs are almost never able to talk to each other, or to share each other's data. Compare to the free software world, where most major and well-known competitors, such as GNOME vs KDE, are actively working together to make interoperability as easy as possible, often at the cost of many hours of extra development. On top of that, it seems to me that many of these competing proprietary programs on tucows or download.com exist mainly because some developer was not entirely happy with an already existing piece of proprietary software, and decided to write his/her own, better, replacement. In the free software world, said developer would simply provide a patch.

In short, I am not convinced that the availability of more proprietary software is necessarily good for the end-user; on the contrary.

Economic problems for the developer

Obviously, if you read freesoftwaremagazine.com, you most likely already know the above. And if you've been doing any advocacy yourself, you probably know the answers, too. But what's been stopping me a lot in the past is the argument that since it's not as easy to make revenue from free software, the rise of free software will be detrimental for the economy as a whole, wherein a lot of software development companies will suffer. But when I went to do some Christmas shopping a few weeks ago, I saw something that gave me a revelation.

In my home town of Ekeren, there is a shop called "Foto & Video Dali" which has existed for as long as I can remember. This shop, as the name may suggest, specializes in everything related to photography and related equipment: photo and video cameras, picture frames, tripods, lenses, but also film, and development of analog pictures.

The last bit, photo development, is where most of their revenue comes from. Or, well, it was where most of there revenue came from. In this digital age, where everyone buys digital cameras and even digital SLR cameras are starting to become affordable, obviously a shop that mainly lives off of picture development can no longer survive. As a result, Foto & Video Dali now needs to either find some other source of revenue, or will eventually close down.

And the first is what they're now doing; in addition to the TV sets and audio equipment they've been selling since a few years—not really photo equipment but still slightly related—they now also started selling small kitchen appliances: mixers, waffle irons, and the like. In other words, they've started to diversify, and are moving away from being a photo shop to being a shop dedicated to general electrical equipment.

What does this have to do with free software, I hear you ask? Simple. If photo shops can adapt to a changing economic situation, then so can proprietary software development firms. If nobody cares about the fact that digital photo equipment is detrimental to some people's businesses—because, after all, digital photo equipment is good for the end user—then nobody should care about the fact that free software is detrimental to some other people's businesses.

Conclusion

It is obvious to anyone that free software is gaining ground everywhere, and that this is an evolution which will only continue in the future. It is just as obvious that this evolution will be a problem to people who have high stakes in proprietary software. But, even if that is true, that's not something I care about much.

Or, in other words: free software may kill some software firms. So what?

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Comments

Anonymous visitor's picture
Submitted by Anonymous visitor (not verified) on

... it's [Free software] bad for the economy and not sustainable in the long term ...
So their outdated business model of selling licenced copies of user subjugating software is being threatened due to free software. Cry me a river. They need to adapt their model or die; horse and buggy builders had to do this when cars started becoming affordable for the multitudes.

...because the lack of direct revenue on developing free software makes it harder to make money out of developing such software.
What? Red Hat, IBM, Novell, Sun and plenty of other companies seem to make a healthy profit from developing and supporting Free software. Though there are occurrences user subjugation involving non-Free software from these companies, the fact is, they get a direct revenue and healthy profit for developing free software.

... then less people will be inclined to write software professionally. In turn, this will mean that end-users will have less high-quality software available.
If you don't have the resources (man-power, time, skill, ) to improve software for yourself or your organisation, then chances are, you need to hire a professional to do it for you. If your software was improved to work better for you by a professional that you paid, doesn't this mean that the software is professional high-quality software?

BTW, I'm not directing this comment towards you, but to the people that make these claims. To me, they have invested too much time and mind power into the old and effective business model of subjugating their users through software for profit. I haven't seen many people of this category that truly understand Free software. Because of this, they will continue complain about getting less money and not change their ways of making money. While I hope that this business model will die, I don't see it happening in the near future while user subjugation remains profitable and they choose to not educate themselves about Free software.

Anonymous visitor's picture
Submitted by Anonymous visitor (not verified) on

Isn't that a bit harsh?

I know, Windows is a bad OS that won't let me do everything i want. But 99% of the software we call proprietary is not really "subjugating" the user.

The purpose of proprietary software is not dictating what people should do (there are exceptions), but making money. Is it bad when i say i want to make money with the software i write? Writing software is what i can do best, so i want to feed my family by doing so.

I'm writing free software, that's fun. And i'm writing proprietary software, that fills my fridge. Am i a bad person now?

Wouter Verhelst's picture

Well, perhaps. But it's not impossible to fill your fridge by working on free software, either; the fact that this is true, and the fact that some people are trying to scare people away from free software by claiming the opposite, is what I wanted to point out.

I'm not saying you're necessary an evil person if you do write non-free software (hey, I'm not Richard Stallman ;-), but I do feel that this particular myth is one that should be debunked as soon as possible.

Anonymous visitor's picture
Submitted by Anonymous visitor (not verified) on

BTW, I'm not directing this comment towards you, but to the people that make these claims. To me, they have invested too much time and mind power into the old and effective business model of subjugating their users through software for profit.
That was exactly the point of my post, too :-)

Anonymous visitor's picture
Submitted by Anonymous visitor (not verified) on

"First of all, the statement that free software generates less direct revenue is probably true. [..] Additionally, of course, the fact that it's easier to generate revenue with proprietary software doesn't make it impossible to do the same with free software; examples can be found when looking at companies like IBM, Sun, and Red Hat, who do get some revenue from free software (although none of them provide free software exclusively)"

In my opinion what is important when evalutating commercial open source viability is what kind of relationships exists between the firm and the community.
In this regard RH and Sun are known to have chosen the symbiotic approach, where others enjoy more a parasitic one. For the latter I believe is not important if and how do they profit from OS, don't you agree?
I agree that free software is gaining ground everywhere, but before this would seriously affect proprietary vendors I'm much more interested in how OSS firms will eventually appropriate returns from the commons..

Anonymous visitor's picture
Submitted by Anonymous visitor (not verified) on

The distributor can add a feature to its software that lets the user make money from it in an organized way and pays the organization for the right to do so, which returns a percentage to the distributor.

Anonymous visitor's picture
Submitted by Anonymous visitor (not verified) on

it seems to me that many of these competing proprietary programs on tucows or download.com exist mainly because some developer was not entirely happy with an already existing piece of proprietary software, and decided to write his/her own, better, replacement. In the free software world, said developer would simply provide a patch.

I wish this was true... The fact that there are too many F/OSS developers who think they are the saviors of the world and that their SW will do it RIGHT is one of the biggest problems of Linux...

Anonymous visitor's picture
Submitted by Anonymous visitor (not verified) on

This is spot on - people advocating against free software this way are effectively encouraging us to smash windows (not the software windows).

http://en.wikipedia.org/wiki/Parable_of_the_broken_window

Anonymous visitor's picture
Submitted by Anonymous visitor (not verified) on

So What???! Maybe you should think a bit more about the consequences before advocating the scrapping of the economic model that has underpinned software development up to this point. What is your summary opinion on globalization? Is it good or bad or something a bit more complex? In 100 years will we look back on the globalization experiment and see that it was the best way for humanity to develop? Are you really sure about the FOSS business model or could it be that future reliance on non-professional software development somehow turn out bad?

Perhaps what is needed is a middle way. An open source model could be created where for-profit developers can restrict redistribution for a period of time (say 6 months). This would allow them to offer subscription services which would replace the "per copy" model that is offered right now. At the end of the six months the code would be relicensed under the GPL. If the developer failed to offer sufficient value in their subscription service the older GPL version would fork and become the primary distribution. If such a model existed surely more software would be free -- even if delayed just a bit.

Of course, this wouldn't be the GPL. People who have chosen the GPL don't want their code closed and their opinions should be respected.

We shouldn't just close our eyes and hope for the best.

TJ

Terry Hancock's picture

It's important to remember that the model you describe for software development has existed for only about 30-35 years. For a good 20 years before that, software was dominated by an essentially free, academic development model (what you might call a patronage model -- software development was primarily paid for by university and government research projects).

During the 30 years or so that proprietary, closed source software dominated the software marketplace, development continued, but it's questionable whether it kept up the pace that free software development did during the same interval.

As a comparable, the Windows codebase apparently dates to about the mid 1980s, whereas Linux was created essentially from a standing start in 1991. Both operating systems had the benefit of the non-copyleft free-licensed BSD Unix operating system, so that does not explain any handicap for Windows.

Today, which system is more mature: the 20+ year old system developed according to the prevailing proprietary model or the 16 year old free software operating system? In terms of number of bugs, security holes, flexibility, and robustness of design it would be pretty hard to pick Windows.

IMHO, this by itself demonstrates the superiority of the free development model, but there are many other arguments as well.

The main article is simply articulating the entrepreneurial economics concept of "creative destruction": a new business model will inevitably cause destruction of existing businesses which do not adapt, but that's just the nature of a free market. When you create an efficient new way to do things, you destroy the inefficient old way.

Many corporate complaints about the free market reduce to a failure to accept that creative destruction is good for society as a whole (note that this is not the "broken window fallacy", despite somewhat similar terminology).

Wouter Verhelst's picture

Yes, so what. It is a fact of life that businesses rise, shine, and then eventually die off again. That's economy, and doing business is intrinsically hard. I should know, I do run a business.

If you lose your job because of a business that gets closed down, then no doubt you'll find a job somewhere else. At least if you had nothing to do with the failure of the business. And if you did, well, perhaps you'll learn a lesson.

I'm afraid I can't feel sorry for people who might lose their job because they were in the business of writing proprietary software in a future where proprietary software goes the way of the dinosaur.

yalu_fvd's picture
Submitted by yalu_fvd on

http://www.nl.datanews.be/news/enterprise_computing/software/20070116021

Title: “Extra investeren in open source software kan economie jaarlijks 10 miljard euro opleveren”

Translation: "Investing more in open source software can produce 10 billion euro to the economy each year".

P.S. Hi Wouter! Good article!

Author information

Wouter Verhelst's picture

Biography

Wouter is an independent contractor specializing on Free Software. In his free time, he contributes to the Debian Project as a Debian Developer.