Subject: Re: OpenSources "opensourced"
From: "Stephen J. Turnbull" <>
Date: Fri, 21 May 1999 02:45:47 +0900 (JST)

>>>>> "Craig" == Craig Brozefsky <> writes:

    Craig> Jean Camp <> writes:
    >> > Free software can generate revenue directly as well.  What
    >> > are the folx at Cygnus doing?  >
    >> They are bundling the software with trust & culture. The
    >> software is bundled with a corporate name, the corporate
    >> culture, the promise of a continuing corporate identity to link
    >> to the software, and a price.

This is true, of course---but is it useful to think this way?  You can
make the same argument that Microsoft doesn't sell software, it sells
trust and culture.  After all, anybody with a CD-ROM drive and a few
less than 100% honest friends can have any MS product for free.
Threat of lawsuit against large corporate sites?  If it weren't for
the IP laws, it would be called "racketeering".  From the point of
view of choice behavior of the customers, it's exactly equivalent.

I suspect that "selling software" is a reasonable first approximation
as a description of what Cygnus does.  We just need to figure out what 
friction they're using to get people to buy it:

    Craig> Is it because our ecomonic models are not capable of
    Craig> explaining why someone would pay for something they could
    Craig> get at no cost elsewhere that we must continue to write the
    Craig> value of of the software out of the model entirely?

Of course not.  One (of several possible) answer has been posted a
couple of times already:  management is paying for a solution to a
problem; they do not necessarily have the time or the expertise to
solve it themselves, including finding it on Web or FTP sites.

This argument may not work for shrink-wrap mass-market OA products,
but I don't believe that has been proved either way yet.

It may be useful to argue that software should have no positive market 
price; all the vendors are selling is "transactions cost reduction."
But that argument would apply equally well to Microsoft, and with a
little stretch, to custom software written for a single customer.  Do
we really want to go all the way to purely hedonic models?  I suspect

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