The Simple Economics of Open Source
Raffael Cavallaro
raffael at mediaone.net
Wed Apr 26 20:57:57 EDT 2000
In article <390534BB.3D6CEBDF at libc.org>, Bill Anderson <bill at libc.org>
wrote:
>Unless you are redefining
>'commodity' (possibly by your 'known to many' remark) to fit whatever is
>provided as counter evidence.
A commodity is that which is available in large quantities, from many
vendors offering essentially interchangeable product. This makes
commodities inexpensive, hence the term "at commodity prices" meaning,
"inexpensive."
In intellectual property then, a commodity is that which is known to
many and not under copyright or patent. Because of the near zero cost of
copying, the large quantity availability is a non-issue with software.
What matters is whether or not it is known to many, because you then
have many potential suppliers. If it is only known to a few, then the
number of potential suppliers is few, and prices are not like those of a
commodity market.
Examples: The JPEG standard is known to many, and not under copyright or
patent. Therfore, software that compresses/decompresses JPEGs is
available from many suppliers (again, the ease of copying electronic
media moots the quantity issue). Because of the fact that JPEG
compression/decompression is known to many, software to perform these
functions is plentiful and cheap (i.e., often free).
The Microsoft Word (.doc) format is not known to many (really, only to
MS programmers) and binaries to read/display/edit data in this format
are under copyright. Although others have tried to reverse engineer this
ever changing format, they have not been 100% successful. The result is
that if you want to be certain that you can read/display/edit a document
in this format, you have only one supplier, namely, Microsoft. Because
of this, software to perform these functions is not a commodity item,
and is quite expensive.
In short, I'm not "redifining" the word "commodity." I'm using it as it
has always been used. I think that many open source advocates have
failed to apply simple logic to the economics of open source, believing
that somehow, the internet, or software, is immune from simple laws of
supply and demand. They are not.
Ralph
--
Raffael Cavallaro, Ph.D.
raffael at mediaone.net
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