Eric Raymond's classic essays about the Open Source movement have been released in book form recently. Eric polished a few tidbits up for this O'Reilly edition, and Robert Young, co-founder of Red Hat, provided the foreward. And so far the book appears to be a hit among the suits.
The essays. Eric is a prolific and talented writer; these three essays are The Cathedral and the Bazaar, Homesteading the Noosphere, and The Magic Cauldren. They are available for reading at http://www.tuxedo.org/˜esr/writings.
Eric's essays speak very eloquently about the ecology and economics of open-source software development and business models. I won't try to summarize them: you should just read them yourself.
What I do care to comment on is the confusion, as I call it, between open-source and free software, and their respective business models.
Adam Smith vs. Dilbert. The Dilbert workplace, where even the managers and vice presidents of companies have Dilbert comic strips on the walls of their office, points to the need of updating Adam Smiths view of economics. In the days before the Internet, before sharing information at the speed of fiber, before frustrated programmers stumbled over non-disclosure agreements and proprietary licensing and re-create the wheel ad nauseum, Adam Smith made some sense.
The next generation of Dilbert comic strips should, in my humble opinion, give Dilbert a promotion and show us how management should be done. Perhaps Dilbert could start an open-source software company. Or, more challenging yet, he could lead his company from a traditional business model into an open-source business model and show how that is done. This would be very interesting, since so many companies are trying to make this very transition; most get pounded by one or both sides of zealots and extremists somewhere during the transition.
Unfortunately, many participants in the open-source community embrace the GNU Public License with a sort of religious fervor. Religious zeal tends to diminish the need for an open and curious mind on the part of the zealots. It's the ``Stallman said it, I believe it, that settles it'' point of view. But many of these zealots have never tried to run a for profit business themselves. So when a Corel or a Borland/Inprise or some other traditionally for profit company tries to enter the open-source market place, it shouldn't be surprising that they will make mistakes and offend people on either side of the commercial vs. free software ideologies. The least open-source advocates could try and do is appear open-minded about something they most likely know little or nothing about: running a for profit business in the real world.
Mu Shin. The story of the zen master who over filled the American professor's tea cup, spilling tea over his would-be student, illustrates the need for ``emptying your cup'' before you try to learn something. As open-source advocates and free software developers, we should bear this story in mind when we talk with business people about the business models Eric Raymond and others propose for open-source software. We should remember, while we believe we know something about developing free software or open-source operating systems, we probably know next to nothing about running the day-to-day operations of a company the size of Corel, Inprise, IBM, or the like.
You can't really pretend to be an expert unless you know a lot about both jobs: developing open-source or free software and managing a large business. Ideals are fine, but they should be tempered with an understanding of economic realities.
Scarcity. I believe the key point where Raymond et al depart from traditional economics is on the fundamental notion of scarcity. The perception of ``Scarcity'' is the basis for the teaching of economics today (or at least when I studied it in school). Without the assumption of scarcity, theories of supply and demand, production and cost, markets and pricing, and just about everything else, must all be redefined.
Given the Internet and the gift economy Raymond discusses in The Magic Cauldren, ``software that doesn't suck'' is as close to a free externality as possible. It's largely free for anyone with the means and capability to have a PC and an Internet connection, that is.
I suspect, though, that this is one of the first times in history where mainstream business is forced to reassess the classic definitions and Smith's ``Economic Problem.'' Open-source and free software are a new phenomenon for businesses who want to compete or cooperate with the emerging vendors in these markets.
Conclusion. The existing models for business and for software development are at least partly broken, as indicated by the Dilbert mentality that pervades the business place. Eric Raymond's essays study this problem, but I believe more study of the implications of non-scarcity of good software are required. I also believe that an open mind is necessary on both sides of the free vs. commercial licensing debate in order for this ``non-scarcity'' economics to be discussed properly. I think the word ``revolution'' is in order in this discussion, since ``non-scaricty'' must cause our classic notions of economics to evolve to an even higher order.