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<title>Only the Free World Can Stand Up to Microsoft |
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- GNU Project - Free Software Foundation</title> |
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<div class="article reduced-width"> |
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<h2>Only the Free World Can Stand Up to Microsoft</h2> |
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|
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<address class="byline">by Tom Hull</address> |
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|
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<ol> |
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<li>The reproduction and distribution cost of software is zero at |
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the margin. This means that in theory it is no more |
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expensive to produce software which can be freely distributed and |
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used by everybody than it is to produce software for a limited |
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clientele.</li> |
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<li>The pricing of software bears no relationship to the cost of its |
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development. The two factors that do matter are market size (which |
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is limited by price and utility) and competition. Given a market |
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for a software product, the maximum margin can be obtained by |
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precluding or eliminating competition.</li> |
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<li>Software companies that are able to thwart competition attain |
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pinnacles of power which are inconceivable in other industries. |
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Partly this is due to the enormous cash flows that are possible in the |
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absence of competition from products with nil reproduction costs, but |
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largely it is due to the complexity of software itself, which allows |
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dominant companies to design “standards” which exclude |
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future competition.</li> |
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<li>All niche markets for software rapidly evolve toward monopoly or |
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an equilibrium where a small number of players tacitly agree not |
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to mutually destroy their profits. (Established companies can |
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defend their market share by reducing their prices to practically |
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nothing, making price competition suicidal for newcomers.) However, |
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there are cases of asymmetrical competition, where a large company |
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with other sources of income can destroy a smaller company that |
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depends on a single niche revenue stream.</li> |
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<li>Microsoft has a secure revenue stream based on its dominant |
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position in personal computer operating systems software, and uses the |
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power inherent in that position to favor its other business activities |
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with its ability to dictate “standards” and to undermine |
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competition, especially where power (as opposed to mere money) is at |
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stake.</li> |
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<li>Capitalists invest in new software ventures with the hope of |
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gaining a dominant position in a new niche market. There is |
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essentially no new investment in existing niche markets, since it |
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is impossible to compete with an established dominant player on |
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the basis of lower costs and the possible gains of an uphill |
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battle for a small share of a shrinking pie rarely justify the |
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risks. In their wildest dreams these capitalists want nothing so |
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much as to be just like Microsoft.</li> |
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<li>The drive to restrain Microsoft under the rubric of antitrust law |
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seems mostly to be the effort of companies who find their own power |
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positions threatened by Microsoft's activities. They seek to make |
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it harder for Microsoft to undermine their own businesses. However, |
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they are fundamentally similar to Microsoft in that they don't |
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question a world where technology companies working from private |
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caches of intellectual property are able to control the use of that |
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technology for their own best profit.</li> |
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<li>In the market equation, demand is equal to, and in many ways the |
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master of, production. Yet in the world we live in, production is |
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highly organized and efficient and commands enormous financial |
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resources and seductive powers of persuasion, while demand is |
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fragmented, uninformed, and powerless. While consumers can still kill |
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a product that they have no desire for, they are nearly powerless to |
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direct or even influence the detailed designs of those products. For |
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software products, consumers can only choose among a given set of |
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alternatives, which are extremely complex, dauntingly impenetrable, |
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and generally designed more for the company's anticompetitive purposes |
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than for the user's tasks. (Even the old fashioned option of doing |
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without is often impossible due to the intricate web of |
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interdependencies as new hardware and software march in lock step into |
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the future.)</li> |
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<li>The real “killer software” is free software: software |
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that is free of intellectual property claims; that is published in |
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source code form, so can be inspected, evaluated, fixed and enhanced |
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by anyone with a mind to do so; that is freely distributed and can be |
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installed on machines and used without limit. Free software is the |
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software that kills the closed, nefarious software product |
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industry. It is software that users can select intelligently, to do |
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today's tasks, and which they can collaboratively build on to handle |
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future needs. Free software is the one thing that not even Microsoft |
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can compete with.</li> |
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<li>Still, there is one core problem: who pays for developing free |
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software? The usual answer—which leads to all of the trouble |
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above—is that investors pay for development, which they |
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recover from their profits. The only real answer is that development |
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costs must be paid for by users. The key point here is that what is |
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paid for is not the distribution or use of the software, but its |
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development, and that the development of free software implies that it |
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can be used by anyone. I think there is a simple way to handle this: |
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anyone who wants a piece of software developed or enhanced posts a |
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“request-for-proposal,” including a sum that the requester |
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is willing to contribute towards its development. Intermediary |
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organizations can pool these requests, and interested parties can up |
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the ante. Developers can then search through the current postings and |
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bid on development work or work on spec. Developers can also post |
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their own proposals, which users can then buy into.</li> |
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<li>Free software can be developed less expensively than closed |
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software products. Even for well paid professional developers, |
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fully underwritten by conscientious users, the cost of free |
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software would be significantly less than the premiums now being |
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paid for empire building. The quality would be better, especially |
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in terms of fitness for use. Free distribution would ensure |
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maximum exposure and choice: a free market based purely on |
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utility and quality. The service component of software would also |
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open up: anyone who wanted to could start from the same code, to |
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learn, support, and teach. The best service providers would |
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succeed.</li> |
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<li>Simple steps can get this movement underway: Form an initial |
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organization to sort out the technical issues, suggest working |
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arrangements, study the economics, hack out a legal framework, seed |
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and coordinate the requests, and canvas for initial technology |
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contributions (including the large body of currently available |
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freeware), do some evangelical work. Urge large companies and |
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organizations to budget a small fraction of their annual software |
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outlays for proposals. Set up a review group for intellectual property |
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issues, challenge dubious claims, and investigate the feasibility of |
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buying and releasing rights to valid claims. Encourage the |
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development of more local organizations—local to place, to |
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industry, to niche, to taste—with the initial group breaking |
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up or fading away: common methods and procedures, but no centralized |
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control.</li> |
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<li>Let's call this organization, this whole framework, “The |
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Free World.” It stands for free and open knowledge, free and |
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open development, software that works for you. Take a stand. Make a |
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contribution. You have nothing to lose |
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but <kbd>CTL-ALT-DEL</kbd>.</li> |
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</ol> |
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<hr class="column-limit" /> |
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<p>Additional notes can be found |
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at <a href="/philosophy/free-world-notes.html"> |
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gnu.org/philosophy/free-world-notes.html</a>.</p> |
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<p> |
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Please send questions and comments regarding this specific page to Tom |
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Hull <a href="mailto:ftwalk@contex.com"><ftwalk@contex.com></a>. |
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<p>Please send general FSF & GNU inquiries to |
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There are also <a href="/contact/">other ways to contact</a> |
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<p>Copyright © 1997 Tom Hull</p> |
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<p>You may link to this document and/or redistribute it |
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electronically.</p> |
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<p class="unprintable">Updated: |
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$Date: 2023/05/10 10:41:16 $ |
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