Subject: Re: Need arguments Pro LGPL
From: gnu@CYGNUS.COM
Date: Wed, 01 Sep 93 16:40:33 -0700

>    "Hmm.. that'll mean that we'll be providing our direct business
>     competitors with source, but they'll never in hell provide anything
>     similar back to us. Do you think that is correct?"

I believe that is incorrect, for two reasons:

	*  Most of your competitors are too committed to their current
	   product lines to adopt yours.  They're too spooked by free
	   software to even consider using your source code for anything.
	   Their "immune system" shoots down this idea long before they
	   can give it conscious thought.  Even if their management is
	   flexible enough, their lawyers probably aren't.

	   (For example, no company that already sold a C compiler has
	   switched to GCC, even when GCC was better than their
	   compiler.  Only new companies, or new divisions of old
	   companies, ended up shipping GCC on their systems.)

	   (Another example is Sun's NeWS.  It could not compete with
	   its competitors' free product "X Windows", but Sun could
	   not internally make the decision to free its own product.
	   Sun even merged the free product into their proprietary
	   NeWS, producing X/NeWS, but the cost of merging it was very
	   high.  The resulting window system never caught on, since
	   it only ran on Suns, while X Windows usage across all
	   machines soared.  The NeWS and X/NeWS products eventually
	   died in the marketplace, even though they were technically
	   superior, and Sun was forced to adopt the free product.
	   Sun lost its entire investment in NeWS because of its corporate
	   inability to grasp the market dynamics of free software.
	   Its competitors who freed their software have seen it become
	   standard throughout the industry; their investment paid off.)

	*  If one of your competitors *does* end up using your source
	   code in a product they sell, they will be required to make
	   any improvements available to you (and the rest of the
	   world).  In this way, your competitors *will* provide
	   something similar back to you.  In a sense you and your
	   competitor will have "agreed to work together" on this
	   code, for mutual benefit, even while you are competing in
	   other areas of the business.  Such agreements are very
	   common, a rather large example being Apple and IBM's
	   PowerPC collaboration.  The mutual use of free software 
	   lowers the transaction cost of such agreements, since
	   no negotiations are required; the agreement is implicit
	   in the distribution terms of the software.

In short, I recommend not making your "family jewels" into free software,
unless you have a service-oriented business model.  But in any area
where you might collaborate with another company, consider using
free software to reduce your costs and your transaction costs, and/or
for its other benefits (enhanced marketing and distribution, easier
hiring of programmers with relevant experience, flow of improvements
from your customers, etc).

	John Gilmore
	Cygnus Support