On 25 Mar 2010, at 11:51 PM, Cam KELLY wrote:

  My brother speaks highly of your software and I have a question.
Why is gnucash available for free and/or donation ? I have a limited
understanding of the GNU Software License but if I understand
correctly, you are not required by the license to make gnucash
available "at-no-cost".

  I am a software developer with mid-career experience (about 3
years) and have read 'The Success of Open Source' by Steve Weber and
other on-line commentaries at gnu.org. The police I worked with
previously were leery of open-source software and I continue to
transition to independent work : www.CambridgeSoftware.biz.

There are two components to the cost of software, the cost of developing it, and the cost of maintaining it. Over time, the cost of maintaining the software by far and away exceeds the cost of developing it.

The traditional "commercial" model is to sell you the software outright, however this doesn't cover the ongoing maintenance of the software, so the company needs to find a way to sell you the same software again and again. A common approach is to keep making arbitrary changes to the software to keep coming up with new products to resell, and this is really wasteful.

The open source model is based on a focus on recovering the maintenance cost instead of the development cost, so you'll find the key ways open source companies make money is through charging for ongoing support. Because there is no pressure to arbitrarily change software for change's sake to generate new sales, you'll find open source software is far more stable, changes far less frequently, and is as a result far less risky to rely on than traditional commercial software.

There is second economic incentive for open source, is that the authors of the open source software are credited directly for their work. Commercial companies generally prefer their developers to remain secret to prevent poaching of staff, but that's bad news for the staff themselves, whose contributions to software projects contributes to the reputations of the developers.

A further economic incentive for end users of software is the "fit" of the software application to their organisation. The chances of a given piece of software fitting the problem is very unlikely to approach 100%, there is always a missing feature of place where the software has to be bent to fit. In the case of commercial software, the feature will have to be custom developed and negotiated by the company who produced the software originally, and this takes lots of time, lots of money, and the company can just say no. And for people without time or money, this can prove a dealbreaker. With an open source project, the end user has the source, and can develop their missing feature themselves, or by using skills on the open market, rather than being forced to use the skills of the company who control the commercial software.

A further significant economic incentive in the favour of open source is the quality of code. Open source software is visible warts and all, and the reputation of developers is tied into the quality of the code. Closed source code is hidden, allowing a multitude of sins to remain hidden.

Regards,
Graham
--

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