Subject: Re: FW: Why would I pay for Ximian software?
From: Ian Lance Taylor <ian@airs.com>
Date: 02 Jan 2002 18:43:45 -0800

"Perry E. Metzger" <perry@wasabisystems.com> writes:

> Thus, the evidence against the traditional arguments on externalities
> and market failure: the fact that we can have entire operating systems
> like Linux or NetBSD in existence without the traditional closed
> source model shows that the open source model certainly provides
> dramatic incentives of some sort to production beyond the model of
> dollars going to a copyright holder. At least part of the
> externalities are being handled in some manner, however mysterious.

There is really nothing ``mysterious'' about this--it's only
mysterious if you get your head so wrapped up in econ-101 that you
forget to look at what is really happening.  There are a number of
motivations for creating free operating systems; just to mention one,
the same impulse which leads people to construct large and detailed
model railroad systems, when found in the software arena, leads to the
construction of large and detailed software projects.

There are relatively few people who measure their motivation in
dollars; for most people, money is an enabler, not a goal.


> All this is of very immediate interest to me. I've got a company that
> I started with a bunch of engineers working for me doing NetBSD work
> for a living, and we confront the issue of paying our salaries every
> day of the week. Exactly what sort of models can work that don't
> involve exclusion so that we can continue to make a living AND have
> everyone reap the benefits of having the software be open is a very
> important issue to us -- as I assume it is to many people here.

I would guess that for a company like yours, the key is to find an
area in which your expertise in NetBSD is worth much more to the
customer than the time it takes you to solve the customer's problem.

For example, it's possible that there is an increasing market in
network appliances.  Perhaps you can contract with companies building
such appliances to customize NetBSD for their particular needs.
Perhaps they will pay hundreds of thousands of dollars for something
you can do in a couple of weeks but they can not do at all.
Alternatively, if they can't afford it and you can, maybe you can do
the work at a loss in return for a royalty.  Getting a royalty on
sales of each appliance does not at all preclude feeding your changes
back into the main NetBSD sources.

I wouldn't focus on porting to new microprocessors--I would guess that
most appliance people pick the processor based on the tools, not
vice-versa (of course this doesn't hold for the processor vendor, who
may pay for a port).  I would focus on device and managability
support; perhaps talk to people who sell chips to embedded system
manufacturers, although those people may not have any money.

I don't know a lot about network appliances, so I don't know how
reasonable this is.  But basically I think you need to look for a
niche.  They key point to remember is to charge based on value to the
customer, not on your costs.

Apologies if this is obvious.  When I look at your web site, I don't
personally see this approach.  What I see is a description of services
you offer related to NetBSD.  I think that's selling a feature rather
than a benefit.  I would imagine that many of your potential customers
don't even know that they need NetBSD, so pitching yourselves as a
NetBSD company doesn't really speak to them.  There is some text about
what NetBSD is good for, but that's not the focus.

Ian