Subject: Re: OSDD?
From: "Tim O'Reilly" <>
Date: Mon, 24 Aug 1998 20:23:21 +0200

Brian Behlendorf wrote:

> At 02:32 AM 8/24/98 -0400, Brian Bartholomew wrote:
> >Here are the terms I want to buy software under, which amount to
> >"capped profit".  Suppose five guys sit in a room for a year and write
> >a spreadsheet for Linux.  Suppose they spend $1M doing this.  You can
> >sell rights to run this software which include the source, but you
> >must not collect more than $2M.  If you have 50K purchasers, each
> >purchaser must pay no more than $40.  At this point the software is
> >GPL'ed.  Then you find another program to write.  I have a few tweaks
> >to add but this is the basic idea: repay your investment, make a big
> >profit, price is simply related to cost and not tied with support,
> >don't bleed me forever.  You are incented to get the repeat customer
> >by making your current offering good.

While this might be a reasonable approach for someone who basically
wants to create free software and just wants to finance what is really
a project for the public good, I don't think it will fly with anyone who
is in business.

The biggest problem is that any business succeeds by averaging its
winners and its losers.  Any approach that caps that upside needs to
figure out how to finance the downside.

This is particularly critical when launching new businesses.

If you look at the SPA stats on software company success, you'll see
that the majority of software companies lose money.  The only reason
that investment money continues to go into software is because of the
possibility of really big wins to offset the far more numerous failures.

To me, all these discussions need to be grounded in your objectives:

Are you pushing open source as a moral issue, a la RMS, or is it
a practical way to get wide adoption of software, better quality through
peer review, etc.?  If the latter, a capped return approach would be
worth considering only if it encouraged people to contribute their
efforts to your project more than they would otherwise.

When I look at the most successful free software projects, I don't
see people contributing to them BECAUSE they are free, but because
they CAN.  The biggest benefit of free software isn't that it's free,
it's that it's adaptable, so you can solve your own problem.  So
trying to limit how much money people can make seems a bit off
the scent.

As RMS might say, the issue isn't one of price; it's one of freedom.

The benefits of freedom are entirely independent of how much money
people can make.  At least that's how it seems to me.
Tim O'Reilly @ O'Reilly & Associates, Inc.
101 Morris Street, Sebastopol, CA 95472
707-829-0515 ext 266, Fax 707-829-0104,