Before I jump too deep inside this question I should make a few points. The first is this is my first ever blog post, so please bear with me if I don’t fully adhere to normal blogosphere etiquette. The second is, as I’m sure you know, Dot Net is a Microsoft partner, so I am somewhat biased in my opinions, although contrary to popular belief, Microsoft has not ‘put something in the water’ and our choice to go the paid-for software route when setting up Dot Net was due in large part to the arguments I am about to put forward.
I’m about half way through reading ‘Naked Conversations’ by Scoble and Israel and this has given me the encouragement I needed to start blogging (along with our new corporate blog). It also contained a statement from Jonathan Schwartz of Sun Computers that inspired this particular post. That statement was “in the near future all software will be free and that surviving companies will need to move value away from traditional delivery of a piece of software”. Now I keep hearing things to this effect, although never quite this bluntly, and to be honest it gripes me somewhat. Tim and I run a software company and we know first hand the blood, sweat and tears that goes in to delivering a high quality piece of software. I must admit I just can’t help but feel bemused when I hear that software should be free. Last time I checked the record industry was not providing music for free, nor the publishing industry e-publications. I understand that there is no ‘unit cost’ as such for any of these three, but this does not detract from the fact that someone, somewhere, has to create them.
I keep asking myself the question that why would anyone in their right mind expend a huge amount of time and effort on something simply to give it away? Of course there are a huge number of reasons why they might. Many who contribute to open-source development do it for the love and recognition of their peers. They feel that they are really contributing to some greater good. Not least of all I’m sure they get a huge ego boost from seeing their work become part of something which is used by thousands or even millions of people. This I can understand. What I can’t understand is the new hype within the industry at large.
Shareware is a good example of a sound business model revolving around giving your software away. You license use of your software for a limited time, or with limited functionality, in the hope that a few people will feel obliged to purchase the full package. This model clearly works. You might also choose to give away software to support your main business model, with examples such as Skype. I’ll give people free access to make phone calls to other Skype users in the hope that some of them will pay to make calls outside the network. Again this model clearly works. What I can’t see working is the model as seen through Schwartz’s eyes I give away my software in the hope that my customers will come back to me for some value-add on the top.
Let’s take the example of Fred Bloggs who walks in to PC World and buys a new computer. He needs to be able to email and write some letters. If he buys a computer pre-loaded with a free copy of Linux and Star Office where is this ‘value add’ supposed to come from? Let’s assume Fred isn’t very technically savvy. He has everything he needs right there. Assuming nothing goes wrong with his computer he never needs to spend another penny on it. How as a Linux vendor am I supposed to recoup the money I have ‘spent’ giving him a free operating system and office suite. The fact is I can’t.
The same is true in a business environment. If I provide the OS for free, the database server for free, the web server for free and everything else for free once again where is the value add supposed to come from? Admittedly business users are far more comfortable with paying on-going support costs, but as a software development company how can I guarantee I get a piece of this pie? The only way is to impose a monopoly on providing support for my software. Can you imagine if Microsoft pursed this tact and insisted only they could support their software? They’d be riots in the streets (well probably not, but people wouldn’t be happy). The fact is they don’t because they’ve already been paid for their work so they can sit back and help their partners to sell the value-add on top.
Don’t get me wrong similar business models clearly work elsewhere. If I near-as-dammit give away my printers, as most companies do these days, I can be guaranteed getting my money back through selling ink supplies. I am locking the consumer in to my products. The same just isn’t true of software. There are no on-going maintenance costs associated with software it just does what it needs to.
I think the real killer for me is the lack of responsibility associated with open source software. There’s an old adage in business – if you don’t want grief from a customer don’t charge them. No-one can possibly complain about something they got for free. This is the one insurmountable problem. You haven’t got a leg to stand on when something goes wrong. Sure people will tell you this is the value add, but I just don’t agree. Personally I’d rather pay for something and then scream blue-murder when it does not work. Do I really want to be screaming at someone who has simply taken it upon themselves to be accountable, or at the person who really is accountable?
I know this has turned into a bit of a rant, but I felt it needed to be said. There are an army of people at present espousing the virtues of open-source software and it seems far fewer its paid-for equivalent. Ultimately software is an IP commodity the same as all others and it needs to be paid for the same as all others. Developers need to feed themselves and put a roof over their heads. Up until now open-source development has been subsidized by others so that developers can spend their spare time producing it. This is not a model which can go forward. Those that really think open-source can be free have clearly missed the point. By Schwartz’s admission the free element is just a lure to extract additional value-add services. People will soon get wise to this. By definition nothing can be free, it can simply be dressed up as so. So let’s stop kidding ourselves and just pay for what we use. Let’s also stop bashing companies such as Microsoft for apparently ‘ripping us off’ by daring to charge for something they have painstakingly produced at great cost.