> When something is available for essentially nothing but a little
>dusting off, what is the economic model?
it's called a "gift economy". it's a fairly natural way of adapting to
hyperabundance of resources relative to consumption. "exchange
economies", such as the one in which you go to the store and buy a package
of shrinkwrap software, are adaptations to resource scarcity relative to
consumption.
one of the problems in the software industry is that they're using the
wrong business model.. they've tried to adapt the SOP of industrial
production to software, without resolving some some inconsistancies in that
model.
industral systems present a high barrier to entry throughout the entire
production sequence. it takes a lot of expensive equipment to fabricate
and assemble the components which end up being an automobile. if you
don't have access to that equipment, you can't build cars.. period. even
then, when you've invested in a production line, there's a significant cost
in raw materials and operating expenses which has to be made before it will
produce a saleable product.
industrial producers are protected from competition by the barriers to
entry inherent in the process. every car manufacturer can assume the
other guy is facing roughly the same resource allocation problems, so the
competition is more or less fair.
the problem with software is that 99.99% of the cost is in design. it
costs a billion dollars to make the golden master, but each copy thereafter
costs a fraction of a cent. the barrier to entry on development is high,
but the barrier to replication is low enough to be effectively nonexistent.
the current software market has introduced all sorts of artificial limits
on distribution in an attempt to duplicate the kind of bottleneck which is
inherent to the industrial model. licensing, support, upgrade track, and
pretty much every traditional reason why "nobody ever got fired for
reccomending Microsoft" are alien structures which are in no way inherent
to the practice of developing and distributing software. they all add
additional cost to the distribution process, and in some cases (especially
tech support) the cost of doing them well quickly falls prey to diminishing
returns.
the upshot is that contemporary software production houses burn a lot of
resources to make their production and distribution processes less
efficient than they can be. so far, they've been able to protect that
inefficiency in the marketplace, because consumers have generally bought
into the industrial production model, too.
the widespread distribution of high-quality free software breaks down the
validity of the artificial barriers which maintain the industrial
bottleneck. the values of the structures themselves are thus beginning to
fall prey to diminishing returns. competition among the software vendors
themselves will gradually strip away more and more of those structures.
the simplest possible model for software is to sell it and give it away
simultaneously. tbose users who want it for free can download or copy it,
and those who want to pay for it will do so anyway. in the long run, i
expect to see the commercial software industry doing things that way.
once the artificial barriers to reproduction are gone, vendors will be able
to devote resources to providing services which tie in with the software
they distribute. service industries provide their own barriers to entry,
in terms of things like logistics, reliability, and learning curve. there
are well-established business models for exploiting the bottlenecks
inherent to *those* barriers, so that's where i expect to see the primary
business reaction to open source heading.
> Is the lack of visible large scale organization, as well as highly
>developed arts and crafts in the Eden Epoch, then related to
>over-abundance?
large-scale structures can exist in gift economies, they just have a very
different character. 'wealth' in a gift economy is based on how much you
can give away, not how much you can hoarde. playing Santa involves some
serious logistics, and there are frequently tie-ins to items which are not
abundant.. time and skill, for instance. the more scarce resources you
can afford to invest in distributing abundance, the wealthier you are.
within that framework, all the standard economic tools work, they're just
turned on their heads. consumers don't compete for products from
producers, producers compete to convince consumers to accept products.
> It seems to me, that from all the models I have run across, the viral
>self assembly model is the closest to what I have seen. Linux is a viral
>phenomenon, with the standards being the DNA (or actually RNA) that allow
>it to self-assemble.
i'd say it's a standard marketplace, with few or no inherent barriers on
trying new products and partnerships. collaboration between efficient
specialized producers generates greater abundance than redundant
independent production, and the market is an efficient structure for
finding the best collaborations.
that's not so different from the standard model of enzyme-patterned viral
assembly, if you think about it..
> It also implies that if MS is to destroy Linux, as was implied by the
>Halloween memo, MS must act against the RNA -- and we must watch our RNA,
>our standards, to see that it does not extend them in ways incompatible
>with our self assembly. That is exactly what they are trying to do in
>their extend and encompass methodology with respect to perverting
>standards to their own ends.
as long as Microsoft tries to bottleneck entry to production and
distribution, they're spending money to be less competetive in the market.
the cost of introducing a proprietary standard is very high, especially
when the competition is pushing an open standard. there's very little
stability.. once you own the standard, there's a chance that some bastard
will develop another standard which competes meaningfully with yours.
worse yet, as those who like to sneer at the W3C will tell you, the fact of
having defined a standard doesn't really mean you control it. standards
belong, fundamentally, to the people who use them, not the ones who write
them.
then there are the legacy problems.. when you go from version N to vesion
N+1, there are always things you have to support for back-compatability.
if your standard gets too complicated, you lose support, and competing
standards have a better chance. if you declare a flag day and throw away
the old stuff regardless, you've introduced a new competitor for your own
standard. the easiest way to avoid the problems is to keep your standards
open, but that's precisely what Microsoft doesn't want to do.
it would be much more effective for Microsoft, in the long run, to invest
in a truly first-rate tech support system which supports any flavor of open
source OS or software, but which suggests that people try the Microsoft
product in application area X. they'd gain mindshare among the percentage
of consumers in the "pay anyway" sector, and would gain information about
how to make the best possible product in that area. ultimately, the
Microsoft product would end up being one of the app-killers (so standard
nobody wastes time competing) in that area.
the costs are higher, and the margins are lower, but that's about the only
model i can see where a very large, organized development firm can
out-maneuver the paralell development/support capacities inherent in the
open development model.
mike stone <[EMAIL PROTECTED]> 'net geek..
been there, done that, have network, will travel.
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