Subject: Market Forces and Free Software
From: dfickes@advice.com (David Fickes)
Date: Sat, 21 Sep 1996 19:08:19 -0700 (PDT)


I've worked with a couple of different freeware companies including
Caldera and have been somewhat interested in watching the from the
fringes of the freeware world. The following comments are of
course my own opinionate blather which I expect will generate
a little bit of hate mail and perhaps an interesting discussion as
well.

Executive summmary: Freeware companies have consistently failed to
   take major industry roles because their owner/operators just 
   don't try to comprehend the software channel and are too busy
   trying to teach the world "a better way".

> MS-DOS Discussion:
> Yes, but.  The reason they've been able to raise and raise the price
> for DOS and Windows is because they keep bundling more and more
> software with the OS.  

Simply not the case, lack of serious competition. If you examine 
the papers filed by Caldera and the Justice Department you'll 
discover that the price of MS-DOS rose dramatically for OEM customers
within weeks of Novell announcing that they were discontinuing DR-DOS.

At this stage, Microsoft earns over 50% of their revenue from 
Microsoft Office (PC Week 9/16/96). 

There is a real VAR/OEM market for Linux that is just starting to
get on its legs. But rather than building this channel, most of the 
Linux "vendors" are just shoveling CD's out to the market and giving 
away most of the revenue to the channel. This leaves them underfunded
to pay for needed market development.

If this strategy continues, I believe Linux and other freeOSes
will be destined to be niche "hacker" OSes in a world dominated 
by WindowsNT. 

Currently, Caldera seems to have a clue and has active programs 
in place and Red Hat appears to be taking a few steps to remedy 
this situation. BSDI seems to have a clue and has taken a narrow
niche positioning.

But by and large the freeware community doesn't understand the 
traditional software channel, the dynamics of the VAR channel or
the means of marketing and getting the message out.

Freeware OS features and discussions of DLLs and the like
are interesting to the technicians of the world but ultimately
buyers are interested in solutions not technical features nor
politics. Unfortunately, UNIX and the freeware community is 
appears to be made up of software engineers and technicians who are
opinionated "know-it-alls" who don't understand -- marketing.

regards, -d

David Fickes                                       david@advice.com