Subject: Re: the Free Software Movement in Industry
From: Bernard Lang <Bernard.Lang@inria.fr>
Date: Sat, 25 Aug 2001 10:31:09 +0200

On Fri, Aug 24, 2001 at 04:59:50PM -0000, Seth Gordon wrote:

> Company A is not willing to pay for development that company B could
> later get *for free*.  However, if it saves Company A money up front,
> it would be happy to pay for development that company B would get
> later *for a price*.  (Assuming, of course, that the software vendor
> is negotiating just as stiffly with B as with A.)
> 
>    If a given company decides it can compete in the market of billing
>    software for telcos with a free software product
> 
> Oh, sure, once you have one free and decent-quality telecom billing
> product in the marketplace, that upsets everything.  The problem is, I
> don't see how we can *get* that one product -- it's not the sort of
> project to excite either hackers in their spare time or venture
> capitalists.  Lots of people were willing to use version 0.1 of Linux
> and contribute their suggestions for improving it, but who would use
> version 0.1 of a telecom billing system?
> 

the product can come from venture capital, from a consortium
interested in it  (see eCos), from state sponsored venture capital
(Ada core technologies).

It can simply come from market forces... and that may be the strongest
incentive in the long term.  Why ?  Because the software market has
several characteristics (mainly zero marginal cost, et more
importantly very strong network externalities) that tend to turn it
into monopoles.
   Hence players that start to lose are doomed.  Then their best
strategy is to change the rules of the game, in order to win back
market share, and extract revenue from it through a new business
model.  That is precisely what happened with OpenCascade.  They turned
a proprietary product that could not win because their were not first
on the market, and turned it into free software that is gaining market
shares.
  And they sell services, specific development, applications built on
the product, etc.

Bernard

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