Subject: Re: New ESR paper: The Magic Cauldron
From: "Stephen J. Turnbull" <turnbull@sk.tsukuba.ac.jp>
Date: Fri, 25 Jun 1999 14:40:10 +0900 (JST)

>>>>> "Ian" == Ian Lance Taylor <ian@airs.com> writes:

    Ian>    From: "Stephen J. Turnbull" <turnbull@sk.tsukuba.ac.jp>
    Ian> Date: Fri, 25 Jun 1999 11:28:36 +0900 (JST)

    Ian> In his list of free software models, he doesn't mention the
    Ian> insurance model.

    Ian>    I'm not sure what you mean by that;

    Ian> In this model you release the software and then sell
    Ian> insurance (``if this software does not do what you need it to
    Ian> do, we will pay you $X'') rather than selling support or
    Ian> services.

Oh.  I think that's a non-starter.  The amount of capital you would
need to be credible is huge.  It only makes sense to the buyer if
you're willing to cover contingent damages.  And the legal battles you 
would get into would surely give your goodwill a nasty beating.
(Remember, you have to defend yourself from attempted frauds, and the
frauds will publicly and loudly claim that you're the bad guy.)

It's true that the originating FSB would have advantages in knowing
the code, but what almost guarantees that this is not a business for
FSBs is the fact that any company that wants to buy such insurance
will be able to get it more cheaply from Lloyds (which already has the
deep pockets), who can hire hackers to review the code and read the
mailing lists.

So FSBs can sell consulting services to insurance companies, but
they'll get their lunch eaten if they try to sell insurance to
customers.

    Ian> For one thing, insurance is more likely to be sold by
    Ian> somebody else, although in this paper ESR doesn't talk much
    Ian> about third-party services.

OK, you figured that out first.  But there's no reason why the
consultant needs to be an FSB.  And I think Lloyd's will be leery of
conflicts of interest if the vendor tries to sell consulting services
on their own product.

-- 
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