Subject: Option & Software Pricing
From: Laurent GUERBY <>
Date: Sat, 23 Jul 2005 22:07:53 +0200

Link from /., interesting point of view on software license/maintenance
pricing with an eye of FOSS by Robert Lefkowitz:
At this point, the astute reader will have noticed that the sum of the
value of the option for the upgrades plus the options for the
maintenance is $18.80 + $62.50 = $81.30. That is to say, our $100
software license consists of $18.70 for the value of the actual software
and $81.30 for options on future maintenance and enhancements.
Therefore, the major difference in worldview between open source
advocates and proprietary software license advocates is explainable as a
differing opinion on the correct value of the volatility of maintenance
and upgrade pricing. People who believe that the pricing on maintenance
is stable and unlikely to change see greater intrinsic value in the
software. People who fear that the pricing is subject to large
fluctuations see no intrinsic value in the up-front license; stripped of
the options, the license value approaches $0.

For the open source movement, perhaps a better way to position the
change that OSS is making is this: we're converting warrants on future
maintenance and enhancements into options, which means that instead of
having a sole supplier (warrants), we have created a third-party market
(options) of these derivatives.

How capitalistic is that?