Subject: Re: Successful FSBs
From: "Benjamin J. Tilly " <ben_tilly@operamail.com>
Date: Mon, 30 Sep 2002 05:02:00 +0500

"Tim O'Reilly" <tim@oreilly.com> wrote:
> On 9/27/02 10:22 PM, "Stephen J. Turnbull" <stephen@xemacs.org> wrote:
[...]
> But I don't think that free software is a handicap, even in business.  It's
> a strategic advantage, when applied strategically! It's a handicap only if
> applied dogmatically.
>
> This is my whole point to the list:  the secret of being a *successful* FSB
> is to use free software where it's appropriate, and not to use it where it
> isn't, and to understand the dynamics of the markets it creates.

But now I sympathize with Stephen.  It is possible to use
free software dynamics strategically in a manner that is
not relevant to my understanding of the purpose of this
list.  Allow me to illustrate with each dynamic that you
define.

> Free software and open source tend to:
> 
> 1. Fill niches where commercial vendors haven't yet identified a market.
> (This is my alpha-geek argument). Hackers build tools that vendors don't yet
> supply.  When the market gets big enough, vendors go after it with tools
> that make it accessible to a wider audience.  If the vendors were blind long
> enough, then the free software may have become too widespread to displace,
> in which case the dynamic below kicks in.

In which case one could follow free software to try to
identify untapped markets that, once identified, you can
address in a proprietary fashion.  For instance web
servers and browsers were invented in free software but
then proprietary companies formed to deliver the same
thing.

> 2. Commoditize markets.  (The open design of the IBM PC is an even better
> example than Linux, which hasn't yet succeeded to the same level.)  In
> commodity markets, brand, being the lowest cost provider, and supply chain
> management become more important advantages than controlling IP.

And, of course, one could do as Sun has tried to do to
Microsoft and release free software to commoditize
markets that a competitor generates substantial profits
from.

> 3. Allow people versed in computers to share information more easily,
> lowering the barriers to entry and advancing innovation.  This is open
> source as the late 20th century equivalent to the long tradition of
> scientific publishing.

Noticing this pattern may affect people's choices of tools
as they go about proprietary businesses.  This makes them
free software consumers, not businesses.

Cheers,
Ben
-- 
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