Subject: Re: street performer protocol
From: "Stephen J. Turnbull" <turnbull@sk.tsukuba.ac.jp>
Date: Mon, 22 May 2000 15:25:16 +0900 (JST)

>>>>> "Crispin" == Crispin Cowan <crispin@wirex.com> writes:

    Crispin> Consider Lineo vs. QNX:

I can't; I don't have the technical expertise to judge which end of
the Norman castle wall you're trying straddle is more plausible, let
alone which you believe in:

    Crispin> For the embedded/non-RT market, Lineo's business model is
    Crispin> far more attractive than QNX's, even though QNX's
    Crispin> technology is superior,

[sic]!

    Crispin> because Lineo's cost base is lower for similar

[thus]!

    Crispin> functionality.

Given lock-in, the customer is going to want to be on the technology
whose capability is going to grow faster.  So I need to know how the
customers (a) _currently_ perceive the tradeoff, but also how they (b)
view the future potential.  If Lineo is an open source firm that is
going to be forced to price aggressively to differentiate themselves
from copycats, customers may decide its preferable to be locked-in to
the QNX technology with its access to a greater per-unit revenue
stream and thus its ability to fund more development.  Especially if
QNX's marketing talks the talk and walks the walk better than Lineo's
does.

Note that being locked into the Lineo _brand_---by definition, if OSS,
customers are not locked in to the brand---and being locked into the
Lineo _technology_ are rather different things; the cost of switching
to QNX in the future if Lineo, and its copycats, fizzle out
technically is still substantial, I should imagine.  Certainly there
will be many examples where it would be substantial.

Lock-in (aka "switching costs") is very much relevant to OSS; however
the disadvantages to customers are rather different from being locked
into a proprietary product.  (This point is not in Shapiro and Varian,
and as far as I know may be new; citation(s) to earlier mention would
be greatly appreciated.)

OSS-based business models have yet to demonstrate cost advantages in
development (in the abstract sense of lower cost/performance, however
customers define the latter) that are not (more or less) cancelled out
by the competition adopters of that model must face from other firms
who by definition have fairly equal access to their most valuable
resource.  I am fairly convinced that OSS does not impose a net
business disadvantage in many fields of software development, and can
see many small advantages that accrue in one segment or another.  But
conversely I strongly doubt that it confers a _crushing_ advantage in
any market segments.


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