by Rex Ballar » Sat, 05 Feb 2011 12:04:15
n Thursday, February 3, 2011 4:17:37 PM UTC-5, DFS wrote:
You might want to read the GNU Manifesto, Stallman himself suggests that there is nothing wrong with providing SERVICES for free software. OSS just prevents one person from purloining another person's or company's software, making proprietary enhancements, and then holding corporations hostage for $billions annually.
The "publish once then sit back and collect $millions in royalties" has never really worked out that will. It's like the new Amway dealer who thinks he is going to get filthy rich by getting a bunch of other people to do all the work and the selling, while he just sits back and rakes in the money.
Software is a VERY service oriented business. Customers demand frequent upgrades, timely bug fixes, hand holding, training, support, and they are usually NOT buying "software", they are buying "services".
The ONE exception to this is Microsoft, and even here there is often a distorted view of their business model. Microsoft doesn't spend that much on tech support, but they spend a LOT of money on marketers and lawyers. And many of their marketers also function as consultants.
Many years ago, IBM used to sell you a mainframe for $millions of dollars and you expected them to fix it if ANYTHING went wrong. Part of the cost included having someone in an office near the computer to answer questions and fix problems. That person knew who to call if extra help was needed, and if necessary, the company would charter a jet to fly someone to a customer's site in the wee hours of the morning, to get them back on-line.
Microsoft's model was to avoid the high cost of producing and supporting hardware, with the fans that would fill with dust (causing CPUs to overheat) and the hard drives that would eventually overheat and fail. By farming the high cost to other companies, they were able to charge $1000 per user per year, adding up to about $60 billion a year (probably more now) in royalties, with very little cost in actual production and distribution of the software media. In fact, by marketing through OEMs, and large corporations, Microsoft was even able to eliminate most of those production costs. These days, the actual cost of production and distribution of Windows, Office, and Project - even together, is probably less than a quarter.
This leaves Microsoft with about $10 billion to spend on lawyers. They keep the lawyers busy enforcing all of Microsoft's intellectual property rights and defending Microsoft against attempts to break up the monopoly or stop the bundling. In fact, one of the best things about having a legal budget of $10 billion is that you can break the law, and have your lawyers craft a settlement that makes what you did legal, and even gives you permission to do it some more.
Of course, Microsoft has also paid $billions in settlements. Roughly 5% of their total revenue goes to paying settlements.
And even though you really have no choice about whether or not to use Windows, or Office for that matter, because of Microsoft's exclusive contracts with the OEMS (lawyers hard at work), Microsoft buys $billions for advertising. Not because they want you to buy something you wouldn't already buy, but because they don't want the press covering competitors in a favorable way. $5-10 billion in advertising, plus placement control over $40 billion, can get you a lot of favorable press.
Much of Microsoft is just maintaining a "percepti
