Subject: Re: the Free Software Movement in Industry
From: "Jesus M. Gonzalez-Barahona" <jgb@gsyc.escet.urjc.es>
Date: Fri, 24 Aug 2001 17:30:22 +0200 (CEST)

Seth Gordon writes:
 >    It sounds like your previous employer's customers have effectively
 >    implemented a competition.  They have some criterea for picking the
 >    best billing system, inform the players of the contest, and then wait
 >    for bids.  The winning team gets a wind-fall, perhaps spread over time
 >    and correlated to the growth of the telco's needs: that's the "prize".
 > 
 >    In what way is that incompatible with the GPL?
 > 
 > Both the telco sponsoring the bidding and the software companies
 > bidding for the prize have incentives for the winning package *not* to
 > be GPLed.
 > 
 > The telco's directors wouldn't want to devote large amounts of money
 > to sponsor development of features that the telco's competitors could
 > then download for free.  (For some software projects, this wouldn't
 > matter so much, but not for a project so close to the company's core
 > business.)

Really? I do not see how you prevent this with a prorpeitary software
model. If the developer company owns the (proprietary) code, they can
sell it again and again to the competition. If this is prevented by an
agreement with the customer, the same can be done under the GPL (as
far as I know). Remember that the GPL states some conditions if you
redistribute the code, but does not force you to reditribute.

 > 
 > Conversely, the software companies' directors would want the
 > flexibility to say, "Our bid to telco A is too low to cover the cost
 > of the extra features we are implementing for them, but that's OK,
 > because those features will make our product more attractive when we
 > bid for contracts at telcos B, C, and D."

This is a bit contradictory with the previous assumption (company A is
not willing to pay for develpments for company B). But in any case,
There are (at least) two factors you have to consider too:

- The company is of course willing to sell the product to A, B, C and
D. But the cost/performance of the product has to be better than that of
the competition. If by any chance the free software solution has a
better cost/performance, it doesn't matter much the plans of the
proprietary software company (Note that this assumes that the free
software product has advantages. If it is not the case, the rest of
the reasoning is nonsense).

- If the free software company is willing to
play the same game (let's dump a bit the price for first purchaser,
we'll recover money later), they can also do. Not exactly the same way
as with proprietary software, but they can. They have much more
expertise and knowledge of the product than the competition, and the
product is "theirs". If you are a purchasing company, and get two bids
offering the same product and services, at roughly the same price, but
the product is made by one of the bidders (which has demonstrable
experience with it), which bid would you take?

If a given company decides it can compete in the market of billing
software for telcos with a free software product (perhaps because of
the reuse they can do, or whatever), even if it is with lesser
benefit than usual for propietary software companies, *and* they win
the bids, it doesn't matter that the other software companies'
directors prefer the propietary model for some reason...

Saludos,

       Jesus.

-- 
Jesus M. Gonzalez Barahona                | Grupo de Sistemas y Comunicaciones
jgb@gsyc.escet.urjc.es / jgb@computer.org | ESCET, Universidad Rey Juan Carlos 
tel: +34 91 664 74 67                     | c/ Tulipan s/n
fax: +34 91 664 74 90                     | 28933 Mostoles, Spain