One of the criticisms of free software you hear over and over
again is that there is no business model for software companies to
use with free software. After all, it is said, how can you sell
something that your customers can get for free? What this criticism
really says is, "how can companies use their present business model
to sell free software?" Obviously they can't.
If ever there was a technology that could be described as
"disruptive," it would be free software. It scares the hell out of
people. It is feared that if all software were free, no one would
have any incentive to write software and thus the whole world would
just dry up. This line of reasoning overlooks several important
facts:
- Most software is not packaged product. The truth is
that most software is developed for internal use.
- People still want software and are willing to pay for
it. Since software is still needed, there will always be work
for programmers to solve other people's problems.
- Software development in its present form is very
wasteful. Closed source code has a chilling effect on software
development. There is tremendous incentive to reinvent the wheel as
licensing other closed source tools is as limiting to developers as
it is to end-users. This failure to "stand on the shoulders of
giants" along with the proprietary nature of their own work causes
continuous limits on their own development resources.
The present closed source model is a fairly recent development
in the software industry. Before the PC, most software was
contracted and those contracts always provided for source code to
be given to the customer. The customer, after all, wanted control
of his computer and wanted the freedom to have another contractor
provide future maintenance of the code. Once the PC software
industry discovered the secret of selling a $2 diskette for $400,
the present business model fully took hold. But such a trick can
only work if you can enforce an artificial shortage on the
software.
The model of the future will be very different. In the future,
when you pay for software you will pay for its development. You
will not pay for the effects of the artificial shortage of
software. In fact, there will be a variety of new kinds of business
models:
- Software Development Houses are a traditional business
that develops software for hire. In the future, they will market
their services to groups of companies that wish a particular
application built. The resulting project will be open to outside
developers and the customers for participation. One example is the
relationship between the Mozilla
project and Netscape. Another example is Cygnus Solutions
division of Red Hat.
- Development Brokers will be a new type of business
that will find groups of users for a particular application or
system and will organize them into consortiums that will fund the
development of projects. They are the middlemen that will bring
users and software development houses together. They will negotiate
the project requirements, the acceptance plans, and contract
administration with the software development houses. There have
been a few attempts at this model, but so far they have mistakenly
attempted to match up large companies and individual
developers.
- Development Support Companies will provide on-line
services for developers. Early examples of this business are
SourceForge and Collab.Net. One problem that software
development houses will face is how to host projects for open
source development and maintenance. Various companies will step
forward to address this market.
- System Integration and Management Services will emerge
to coordinate the delivery of software products to users. This is
not practical in the closed source world and it results in severe
logistical and cost issues for large users of software systems.
Early examples of this developing model are the Red Hat Network and
Ximian Red Carpet.
As you can see, there will be a future after all.