nehdia_s
10-14-2001, 02:41 PM
I am a freshman studying in the Lahore University of Management Sciences (LUMS), Lahore, Pakistan. I am currently writing a term paper on the open source software movement. My aim is to argue in favour of open source approaches over proprietarism, particularly from the point of view of a third world country. A few questions have occurred to me, however, and I would like to share these with you. Any help in answering these is greatly appreciated.
1. What are the sources of revenue for a company that uses open source approaches? I have so far thought of technical support and packaging (i.e. providing installation software and add-ons that might not be available with the original source code as in Red-Hat Linux). Can somebody give me more ways an open source company generates income?
2. Is it conceivable that an open source company such as Red Hat can some day be worth as much (if not more) as a proprietary company such as Microsoft? What I mean is, can an open source company, from an investor's viewpoint, generate the same amount of profits that a proprietary company does, or is the idea impossible? The following URL:
http://eol.finsys.com/ShowFiling.asp?dcn=0000950109-01-502119
shows one of Red Hat's recent quarterly reports. Among other things, it states:
"We have not demonstrated the success of our open source business model, which gives our customers the right to freely copy and distribute our software. No other company has built a successful open source business. Few open source software products have gained widespread commercial acceptance partly due to the lack of viable open source industry participants to offer adequate service and support on a long term basis. In addition, open source vendors are not able to provide industry standard warranties and indemnities for their products, since these products have been developed largely by independent parties over whom open source vendors exercise no control or supervision. If open source software should fail to gain widespread commercial acceptance, we would not be able to sustain our revenue growth and our business could fail."
Perhaps I should reconsider my stance on the subject. :)
3. Am I correct in assuming that since the open source approach brings down development and management costs, lower software costs will generate the same profits that would have been made through the proprietary approach? Can this, in fact, have a far-reaching impact on software affordability in the Third World? Do you agree that it can curb software piracy?
4. Why do programmers participate? A paper, "The Simple Economics of Open Source" is located at:
http://papers.nber.org/papers/W7600.pdf
This paper states two main reasons why programmers participate: concerns about future job offers (for example, Linus Torvalds has been hired at Transmeta) and peer recognition (ego gratification). Can anyone add to this?
5. What is the difference between "free software" and "open source" software? Are they related? Is the Free Software Foundation working with the Open Source Initiative?
6. What about intellectual property rights? Eric S. Raymond at his web site:
http://www.tuxedo.org/~esr/not-the-osi/software-ipr.html
states that he supports intellectual property rights; that software developers should only *willingly* give up property rights. Doesn't this imply, however, that open source relies heavily on the altruism of programmers? And isn't that pushing reality?
Thank you for your time and help.
Very sincerely yours,
Nehdia Sameen.
1. What are the sources of revenue for a company that uses open source approaches? I have so far thought of technical support and packaging (i.e. providing installation software and add-ons that might not be available with the original source code as in Red-Hat Linux). Can somebody give me more ways an open source company generates income?
2. Is it conceivable that an open source company such as Red Hat can some day be worth as much (if not more) as a proprietary company such as Microsoft? What I mean is, can an open source company, from an investor's viewpoint, generate the same amount of profits that a proprietary company does, or is the idea impossible? The following URL:
http://eol.finsys.com/ShowFiling.asp?dcn=0000950109-01-502119
shows one of Red Hat's recent quarterly reports. Among other things, it states:
"We have not demonstrated the success of our open source business model, which gives our customers the right to freely copy and distribute our software. No other company has built a successful open source business. Few open source software products have gained widespread commercial acceptance partly due to the lack of viable open source industry participants to offer adequate service and support on a long term basis. In addition, open source vendors are not able to provide industry standard warranties and indemnities for their products, since these products have been developed largely by independent parties over whom open source vendors exercise no control or supervision. If open source software should fail to gain widespread commercial acceptance, we would not be able to sustain our revenue growth and our business could fail."
Perhaps I should reconsider my stance on the subject. :)
3. Am I correct in assuming that since the open source approach brings down development and management costs, lower software costs will generate the same profits that would have been made through the proprietary approach? Can this, in fact, have a far-reaching impact on software affordability in the Third World? Do you agree that it can curb software piracy?
4. Why do programmers participate? A paper, "The Simple Economics of Open Source" is located at:
http://papers.nber.org/papers/W7600.pdf
This paper states two main reasons why programmers participate: concerns about future job offers (for example, Linus Torvalds has been hired at Transmeta) and peer recognition (ego gratification). Can anyone add to this?
5. What is the difference between "free software" and "open source" software? Are they related? Is the Free Software Foundation working with the Open Source Initiative?
6. What about intellectual property rights? Eric S. Raymond at his web site:
http://www.tuxedo.org/~esr/not-the-osi/software-ipr.html
states that he supports intellectual property rights; that software developers should only *willingly* give up property rights. Doesn't this imply, however, that open source relies heavily on the altruism of programmers? And isn't that pushing reality?
Thank you for your time and help.
Very sincerely yours,
Nehdia Sameen.