[AktiviX] The Economics of Open Source Software - Prospects, Pitfalls and Politics [tbm at cyrius.com]

[Alan Dawson]

Recd from another mailing list 
 
The argument seems to lead to its final clause "promotion of open-source 
software cannot be an economically justifiable role for the state" inexorabley, 
but I'm sure there are a number of flaws in arguments.  It seems to paint the 
software market in too broad brush strokes.   
 
There was a letter in the Guardian Online magazine recently suggesting that the 
BBC should open up the content management system it uses for bbc.co.uk, I 
thought that was a good suggestion. 
 
There must be analogies with other examples of technological change from 
history.  Toll roads, sewers, broadcasting spring to mind.   
 
I guess that this is just a blast from those who have grown rich on software as 
a  luxury, seek to prevent their hold on its utility being eroded. 
 
> MICROSOFT RESEARCH LECTURE 
> This is a PUBLIC lecture 
> ________________________________ 
> 
> TITLE: The Economics of Open Source Software - Prospects, Pitfalls and   
> Politics 
> SPEAKER: Dr Stefan Kooths 
> INSTITUTION: University of Muenster 
> HOST: Alexander Braendle, University Relations 
> DATE: 15 January 2004 
> TIME: 13:30 - 14:30 
> MEETING ROOM: Lecture Theatre 
> ADDRESS: Microsoft Research Ltd, 7 J J Thomson Avenue (Off Madingley 
> Road), Cambridge 
> 
> Open Source Software does not represent a suitable alternative to the 
> commercial software market from an economic point of view, neither in 
> terms of creating value-added nor in terms of economic efficiency. OSS 
> does not create any new value-added potential, and offers only a 
> fraction of the opportunities of the commercial market. The impact of 
> OSS on sales and employment are therefore less than the effects of 
> commercial software. Furthermore the de facto free availability of 
> GPL-licensed software, and hence the lack of a market price, have 
> far-reaching economic consequences that are elaborated in the 
> presentation. As far as packaged software is concerned its free 
> availability very much limits the creation of profits, income, jobs or 
> taxes. The loss of turnover in the area of software sales cannot be 
> fully recovered with services linked to the software. So-called 
> complementary OSS-business models work in the smaller customized 
> software sector only. The incomes earned there are substitutive and not 
> additional to those created in the commercial software sector. The lack 
> of cost-reflecting prices for GPL-licensed standard software also has 
> consequences for the market process as the pricing mechanism is 
> associated with an important information and coordination function in a 
> market economy. If there is no price, and hence no decisive guide figure 
> for a market, it is, for example, more difficult to identify customer 
> requirements. Further problems can be identified when it comes to the 
> allocation of resources, productivity-oriented factor compensation and 
> incentives for innovations. The lower value-added potential and the 
> reduced efficiency of coordination are weighty economic arguments. They 
> demonstrate quite clearly that the promotion of open-source software 
> cannot be an economically justifiable role for the state. 
___________________________________________________________________ 
 
AED 
--  
"The long revolution is creating small federated microsocieties, true guerilla   
 cells practising and fighting for this self-management. Effective radicality   
 authorises all variations and guarantees every freedom. "   
   
  
  

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