Subject: Re: A few thoughts.
From: Chris Maeda <cmaeda@alum.mit.edu>
Date: Sun, 16 Aug 1998 13:03:53 -0700

At 03:32 AM 8/15/98 -0000, Russell Nelson wrote:
>shap@eros.cis.upenn.edu writes:
> > Do any markets occur to you in which two major providers remain at
> > parity for any length of time?
>
>Republican / Democrat.  Coke / Pepsi.  Ford / Chevy pickups.  I'm sure 
>there are more, but my brain is fading.

The interesting thing about high tech markets is that they are always
winner take all -- the single dominant supplier gets the bulk of the
profits while secondary suppliers get smaller market share and much
smaller margins.  The other interesting thing is that this situation
will only last a few years until the technology changes and creates
a new market that is more important.  The old market stays around
and is still worth a lot of money, but people don't pay as much
attention to it.

As a business model, free software does not compete well in leading-
edge, high stakes markets because the proprietary competition will be
able to marshall resources faster and beat you to market.  The free 
software approach has never been able to pull together the resources 
and engineer a solution as fast as the proprietary software approach.  
Free software does seem to work well in mature markets.  In a mature 
market you are building something that's been built before, has probably 
been described in text books, and you have a large population of people 
that know enough to help you out.  Since time to market is not that 
important, you can take advantage of your superior cost structure.

The original question was how do you do ground breaking stuff in
free software.  I think it's really hard because the free software model
is a handicap in emerging markets.  We were faced with this choice a
couple of years ago and chose the proprietary, venture-funded startup
route.  On the other hand, if you want to grab market share in a 
mature market, and aren't in a huge hurry, free software works well.