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

[Seb James <seb [at] xxxxxxxxxxxxxxxxxxxxxx>]

On Wed, 14 Jan 2004, Simon Brown wrote:

> >From debian-uk, food for thought?
> 
> > 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. 

i.e, the big party in which companies have been able to sell an 
over-valued commodity (some simple computer program or other) for a high 
price is over... or at least, all the booze has been drunk and quite a few 
people have gone home. 

> > 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.
> ___________________________________________________________________
> 
> Sheffield Linux User's Group -
> http://www.sheflug.co.uk/mailfaq.html
> 
>   GNU the choice of a complete generation.
> 

Seb James
-- 
Managing Director,   Educational Systems,  Hypercube Systems Ltd
         Providing Open Source ICT solutions for schools.
Tel: 0114 268 4814                Web: www.hypercubesystems.co.uk
Mob: 07970 849445               Email: seb [at] hypercubesystems.co.uk

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http://www.sheflug.co.uk/mailfaq.html

  GNU the choice of a complete generation.