From: dittigas (dittigas_at_nonexisting.hamakor.org.il)
Date: Thu 29 Jan 2004 - 17:46:11 IST
FYI, I have attached a reply I received from ESR in regrads to a new
paper published by the German "Muenster Institute for Computational
Economics" a few weeks ago. The paper is titled "Open-Source Software:
An Economic Assessment" which doubts that the idea of: exchange of
“gifts for reputation” and participation in a developer community based
on reciprocity can realy deliver, either from quality point of view, or
economicaly for end users (Governemnts, SMEs etc.)
Opening this for discussion if you are interested. I've also CC'd Dr.
Robert Sauer from the Jerusalem Institute for Market Studies (JIMS) who
had recently published an essay titled "Open Question" on globes.co.il,
regarding similar issues, mainly OSS's TCO and use in government and
other issues which are partialy discussed in this paper as well.
Roberts essay is available here:
http://www.globes.co.il/serveen/globes/DocView.asp?did=747399&fid=980
and his reply to some questions asked, attached.
Resources:
Open-Source Software: An Economic Assessment
http://mice.uni-muenster.de/mers/mers4-OpenSource_en.pdf
Both papers are available at: http://mice.uni-muenster.de/ (under MERS)
Regards,
Uri
Eric S. Raymond wrote:
>dittigas <dittigas_at_whatsup.org.il>:
>
>
>>1. No Market at the Core
>>
>>Open-Source Development Open-source software is developed outside of
>>market mechanisms, as the main purpose of making the source code
>>freely available is to prevent a price-controlled market from
>>evolving in the first place. As such, the open-source model
>>(dominated by restrictive licenses such as the GPL) has a nonmarket
>>core. There are commercial business models based on open-source
>>software, but they impact OSS development indirectly, if at all. In
>>any economy based on the division of labor, the market fulfills
>>important coordination functions. However, when software is
>>distributed free of consideration, it lacks a key coordination
>>component the information medium of price and, as a result, suffers
>>from economic and functional deficits.
>>
>>
>
>This is fundamentally in error. Open source does not abolish the market
>in developers' time and attention. Supposing the world were *entirely*
>open source, developers would still respond to bids from customers wanting
>software produced for their use. The only thing open source abolishes
>is secrecy and what economists call "rent collection".
>
>
>
>>2. Developer Orientation is Not Customer Orientation
>>
>>At the nonmarket core, volunteer open-source developers work on
>>projects that suit their own preferences. Their motivation stems
>>from an individual interest in solving a problem, the technological
>>challenge or the hope of establishing a reputation. However,
>>software supply should be determined by users actual wants. If there
>>is no market, then there is no mechanism to steer the interests of
>>developers towards the wants of customers, either.
>>
>>
>
>Customers are free to pay developers to be "customer-oriented", exactly
>as they do now.
>
>
>
>>3. Weak Commercial Software Does Not Mean Strong Open-Source Software
>>
>>The open-source model is poorly suited to be the only alternative form of
>>software development. Open-source software development requires a strong
>>commercial software market. A commercial market acts as a wellspring of
>>resources for jobs, income and product ideas for open-source development.
>>
>>
>
>This is confused and almost backwards. First, in that it identifies
>"commercial" with "closed source" -- a mistake, as any employee of a
>Linux distribution company will be happy to explain. Second, the
>evidence of history is at least as strong that the commercial market
>requires an open-source community to develop technologies like the
>Internet and the Web, innovations that commercial developers cannot
>produce because they don't have an obvious short-term return on
>investment.
>
>
>
>>4. Open-Source Software Does Not Aid SMEs in the IT Sector
>>
>>Far from offering extra business opportunities, open-source software
>>offers only some of the opportunities already available in the
>>commercial market. Nor is promoting open source a suitable
>>local-policy tool for supporting SMEs in the IT sector. If software
>>is available free of charge, its development does not generate
>>proceeds, income, jobs or taxes. This inability to add value cannot
>>be compensated for by using complementary strategies.
>>
>>
>
>This is nonsense, because it ignores the fact that developers can be
>and are paid for creating open-source software and for adding value to
>it. This can be a fertile source of jobs, income, and taxes. In
>fact, economic analysis predicts that as the cost efficiency of
>software rises, customers will put *more* money into programmers'
>salaries rather than less, just as the numbers and hourly wages of
>mechanics rise when the cost of automobiles fall.
>
>
>
>>5. Promotion of Open Source Not a Competition-Policy Tool
>>
>>State support and subsidization of competitors in highly
>>concentrated markets is not a competition-policy tool. Furthermore,
>>such interventions require a level of information that government
>>authorities simply cannot have. As an IT demander, the state should
>>therefore as stipulated in budgetary laws be guided strictly by
>>economic considerations.
>>
>>
>
>I agree that state subsidies are a poor competitive tool, and that
>states should be guided by purely economic considerations. On that
>battleground, the lower cost and higher quality of open source is
>certain to win.
>
>
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