Subject: Re: the Free Software Movement in Industry
From: Bernard Lang <Bernard.Lang@inria.fr>
Date: Sat, 25 Aug 2001 10:14:22 +0200



The example of ACT (Ada Core Technologies in the USA, I believe) is
interesting, and so is the example of OpenCascade.

  But in both cases, the business has a strong service components,
on which they make their living.
   The question is that it may not always be the case, and that
without service, the eonomics may not works as well.

Bernard

On Fri, Aug 24, 2001 at 05:01:37PM +0200, Jesus M. Gonzalez-Barahona wrote:
> Seth Gordon writes:
>  >    [Tom Lord:]
>  >    The competition _might_ be a little bit tougher.
>  > 
>  > What gives the billing-software companies any incentive to benefit
>  > their competition -- even if the benefit is slight?
> 
> iif the the billing-software companies get any benefit from that
> strategy, that gives them a good incentive. 
> 
> For instance, if the customers pereceive advantage in
> purchasing free software products, it is enough that one
> billing-software company (A) offers such a product to completely change
> the market. A is going to get benefit (probably a lot, in case the
> alternative is no selling a product at all) from offering a free
> software product. Probably it is also benefiting its competition. But
> while B, C and D (its competitors) are busy examinating A's code,
> understanding it, hiring people with enough knowledge in the tools
> used, etc., probably A is in a position to re-offer its solution to
> other telcos, probably with some customization (which at that time
> only A can provide). 
> 
> Sure enough, with time, B, C and D will also be ready to offer
> solutions based on A's software. But there is a time-window where the
> only offerer will be A, and if A licences carefully enough (for
> instance, using GPL-like licences), there is a chance that A also
> benefits, in the future, from B, C and D develpements based in A's
> software.
> 
> I like to see this as a game of competiton and collaboration. Of
> course A, B, C and D are competing for a market. But once one of them
> decides to offer free software under something similar to GPL, if the
> others enter to play the same game, all of them are going to
> collaborate, even if they don't like the idea. They will be forced to
> do so, and that will only stress competition. Developement in that
> market should be faster (thanks to the greater competition), and the
> situation is better specially for customers. Of course producers may
> do not like the idea, but they are forced to enter the game or lose
> market share (supossing that the free software model really works and
> provides more economically efficient solutions).
> 
> In my opinion, companies are usually not interested in the benefit
> they provide to their competition, but in the benefit they get
> themselves. I do not see a problem in providing 1 Meuro benefit to
> comapnies competing with me if my incremental benefit is 10 Meuros,
> for instance. Or even if the alternative if I do not produce such a
> benefit is lossing money, versus benefiting of 0.5 Meuros.
> 
> All this reasoning is only sound if the customers are able of
> generating enough resources for maintaining the developemnt costs of
> at least A, of course. But that shoul dnot be different with free or
> proprietary software...
> 
> There is at least one example of this behavior: the Ada compiler
> market. It is a relatively small market, made up by usually large
> purcharsers. In the age of proprietary compilers, they were rather
> expensive, and several companies competed for a fraction of the
> market. When one company (ACT) started to offer a free Ada compiler
> (based on GCC), the competing companies have been forced to improve
> their compilers. Although any of them could get ACT's compiler and
> sell solutions based on it, none did: it is difficult to compete with
> ACT using a product which is better known by ACT. Now, ACT has a
> significative fraction of the market, and in fact it is probably the
> de-facto standard.
> 
> In other industries, of course, the story could be rather different...
> 
> 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

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