Sunday, October 19, 2008

Pros and cons of making more software free

Scribbled some notes down on Richard Stallman's argument that all software should be free. Interesting to have this debate at Sloan. Stallman's article is philosophical, but of course as business school students, it came down to a debate over the net economic surplus created.

Should software be free?

No, it shouldn't be

  • Profits incent innovation; no investment in software means a slower rate of technology improvement
  • Software would be developed internally to meet business needs; this would be ineffecient
  • Quality cannot be guaranteed, especially for the non-technical consumer; is it really free if you need to buy support services to get it to work?
  • From the CIOs perspective, you need accountability (one throat to choke), scalability, and availability. It's hard for open source to do this.
  • Software can be donated or provided at a discount for those who need it

Yes, software should be free
  • Programmers can still make money customizing software for customized functions and support services
  • Potentially lower barriers to entry for businesses
  • Could potentially lead to the production of more and better software based on existing software
  • Could help the developing world who cannot afford to pay
  • Quality of software is often low due to “black box” approach; opening code would allow for improvements
  • Creates virtual monopolies or oligopolies that limit benefits to consumers (e.g. Windows)
  • Enforcement is a violation of principles of freedom (the Libertarian argument)
  • Free software promotes unprecedented levels of worldwide collaboration, why stop it?
Realistically speaking:
  • Balance between open source and for-profit models is ideal. In a way, it is an effective way to segment many markets.
  • Software copyright rules currently provide 70 years of protection; perhaps this should be reduced to a much shorter term (5 to 15 years?)
  • Benefits from holders of software copyrights opening up their platform is substantial; creates customer loyalty and enhanced products with minimum additional $ investment
  • Total cost of ownership is the way to evaluate all solutions, be they open-source, freeware, internally developed or out of a box.
  • The success of the Waltham company Black Duck, which help manage a company's mish-mash of code from the intellectual property perspective shows how jumbled this space is. Managing open source requires a lot of energy, and when you sell your company, you may be beholden to open source software licenses if you built on top of them.
  • Conclusion: Realistically, the balance that is being created is fantastic. People will choose business models that make sense.

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