Camford info the journal of policy, regulation

vol.2
no.1
and strategy for telecommunications
information and media 005
february.2000 © 2000 Camford Publishing Ltd 1463-6697/00/010005-03

inform...
open source:
the economics of giving away stuff,
and software as a political statement
Simon Forge
Freeware or open source software, even called brown bag software, seems to have no
value. Because why would anybody give away anything that does have value? In fact the
community in the largest sense, of the economy and the society that depends on it, have
benefited enormously and tangibly from such open development software: the internet and
the World Wide Web are just some of its children. Open source software heralds a new kind
of economic cooperation, rather than combat. Moreover its donation is a political statement,
affecting billions of people. Its growing power now makes the mightiest of software
publishers take it seriously.

Software has attained incredible economic power.
So much so that we now need ways to break out
of the current hold that its creators have over us.
But how do we escape its hold? Over the past few
years free software has been developing at an
accelerating rate. It represents a new and exciting
path for software development, challenging the
autonomy held by certain major software
publishing companies. Is free software, therefore,
set to become a key feature in the future of a
network economy, or will its advance result in an
overall decrease in its quality? Are we, indeed, on
the verge of a new age in software? Much will
depend upon people’s readiness to exchange their
trusted, yet expensive, brand names for a product
which, at present, is considerably less polished.
But what exactly does free software mean?
Unfortunately, there seem to be no `free lunches’ .
Simon Forge is a Principal at OSI
(Email: 100631.2537@CompuServe.com).
Thus, it is comforting to find that:
The term `free software’ has nothing to do with price
± it is about freedom.
So writes Richard Stallman, one of the
contributors to a book charting the growth in
the open source revolution.1 Today, the list of
free software,`freeware’ or open source code is
already impressive and constantly growing. It
ranges from the basic origins of the internet
itself, and the World Wide Web with the first
browser (Mosaic), to operating systems such
as Linux, GNU and Berkeley UNIX. It also
encompasses the scripting language Perl, the
web server Apache, as well as the GNU C and
C++ compilers.
But open source means far more than free,
in the sense of `no price’. Fundamentally, it
implies no owners. Anyone can improve on
the original, not just a chosen set of academics
and researchers. So its code is constantly cared
for and improved upon by some of the most
006 inform
open source: the economics of giving away stuff, and software as a political statement
able talent in the world. This worries the
world’s largest software publishers considerably,
rather understandably.
W hat does such an apparently fringe,
hacker-led, even nerd-dry subject hold which
is of interest for those outside a circle
sometimes viewed as consisting of introspective
ageing hippies (be they young or old in years)
who are also software freaks? The reply is that
it is clearly already an essential for our future
economy and prosperity, even our freedom.
Because open source software is really about
free speech. Software is speech, in the sense of
creativity. Thus, freely sharing ideas in software
is about communicating without hindrance.
Open source software could almost be seen as
a return to the political ideas of syndicalism
and shared benefit through freedom from
ownership. And the net is the key component.
It brings the ultimate freedom of publishing
globally, at a keystroke. The net turns open
source into a new paradigm for software
creation and network sales ± a new economic
mechanism for free global trade.
However, open source’s significance for any
future world economy is still misunderstood
and certainly unappreciated, except within its
own wired planet. Free software with free
care and improvement is already a key, but
F ig u re 1: Network economics v software economics.
Software
cost/unit
Relative cost
Volume of users
1. Richard Stallman, ‘The GNU operating
system and the free software movement’,
in Chris DiBona, Sam Ockman and Mark
Stone, eds, Opensources: Voices From the
Open Source Revolution, O’Reilly &
Associates, Sebastopol, CA, 1999, USA.
underestimated, driver for and feature of a
network economy. It established the W WW and
electronic comm erce through its free
distribution. N o comm ercial or governm ent
project could do this. From telecommunications
analysis of revenues and margins, the value of a
network economy appears to increase
exponentially with the number of consumers
attached, while the sunk cost in its infrastructure
tends to go up linearly. The main enabler for
consumption, packaged intellectual capital in the
form of software utilities that enable and support
connection, declines towards zero with open
source code (see Figure 1).
The conclusion ± for conventional sales, it
becomes increasingly attractive to sell software
over as large a network as possible. For open
source software, the same network mechanism
works differently ± it leverages its power as an
economic factor in accelerating productivity
gains for its users. Free software makes the net
affordable not to tens of millions, but to billions.
Its freeness wields massive economic power for a
network-based society.
The interesting thing is that freeware ±
opensourcing ± will increase the quality of
software as its availability increases. The network
effect assures a constant quorum of quality, in the
numbers of competent critics and workers who
Network
value
Network
cost to build
and operate

open source: the economics of giving away stuff, and software as a political statement
provide the enhancements, improve the robustness
and fix the bugs.
Furthermore, giving away software is highly
attractive in commercial terms; it is taken up
more widely and in the open source world it then
improves, free. Free software can then act as the
catalyst to sell other products. So, IBM supports
Linux for the RS6000 server and its AS400
platform, previously renowned for being highly
proprietary (the AS400 operating system even
bundled in its own database). Giveaways can
shape, then w in markets, as giving away a
platform triggers sales for products based on that
platform. It’s not a new idea ± Sun, with NFS
(network file system , a U N IX utility) and
Netscape, with its browser, have been doing it for
years. Moreover, free software trains the next
generation of designers ± freeware may often be
all that their centres of learning can afford.
But this is not new. Such was the rise of
UNIX, as AT&T intended, by giving UNIX to
universities. The University of California at
B erkeley subsequently seeded an early
academically free vehicle, Berkeley UNIX, and
Sun was formed in its embers. Its technical
directors, such as Bill Joy, created the Berkeley
version and supported its distribution throughout
academia. The free UNIX world (and UNIX’s
place on the ARPA internet project of the 1970s)
created its even more successful networking
protocol, TCP/IP, the basis of internet
connectivity with IP version 6 aimed at 21st
century e-commerce.Today, the economic model
has moved to the point where com mercial
suppliers build complementary products for a
successful freeware offering. In the case of Linux,
for instance, many of its new device drivers come
from the suppliers of peripherals themselves, to
jump on Linux system sales for disks, printers,
networking gear, etc. The image of hackerware
from am ateurs has passed, although m ajor
software publishers may often encourage this.
The history of pure open sources begins with
the GNU project at M IT in 1984 when Richard
Stallman released GNU and its utilities into the
public domain to create the first such `product’ .
Stallman and GNU were seen as part of the
establishment, yet now open source is the way
forward: Stallman has even received the Grace
Hopper award for achievement in the software
industry.
Open source represents a new path for
software development. It is not like proprietary
freeware directions that deg raded into
proprietary products. For example, UNIX has 30
different marketed versions, each slowly failing as
competing gets tougher, and all hiding differences
in their various advances which other suppliers
2. Linus Torvalds, ‘The Linux edge’, ibid.
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cannot use. In contrast, an open source
operating system such as Linux is only
available as one version, and in the most
valuable form of any software, the source (and
not just the rather indecipherable run-time
binary) is available free. So, any computer
supplier can see and understand any
innovations. Open source thus creates its own
unifying pressure to conform to a common
reference point ± leveraged by the network
affect of millions of users and thousands of
improvers.
W hile the major model of software success
so far has been to sell proprietary binary only
(one reason why enormous CDs are needed
for software now ± the literal is not the
codified version, and the code is itself
increasingly inefficient), the new model is to
deliver free software, but also to make money
out of that action. That’s easier than it seems.
Most people prefer to buy a branded water at
reasonable cost, as it is a life-giving essential,
than to trust the water company. The same
goes for open source. But the brand may be
Red Hat for Linux, rather than Evian or
Badoit for water, with an operating system
and support at a low $50 to $70, rather than
the thousands for the alternatives. However,
this may change. As the web changes from the
Wild, Wild Web to more trusted forms (of
`street’ , `mall’ , `home’ , `office’ , etc) so the raw
open source software may gain preference.
Today we only have the `street’ web so it can
be pretty frightening.
Opensources is a book which espouses free
software in ter ms of the freedom from
restrictions of ownership. It covers this `politics
of software enabled by the network’ as a
collection of papers from some of the major
software authors in the open source world. It
is worth looking into just for its insights into
the software creation process, the quality of
what goes on behind the curtain, showing up
the reality of what we have to use everyday.
Improvers of freeware tend to offer stark
comments on what they see as the faults and
gaps in competitive (commercial) offerings
and in their own freeware creations.We see the
design flaws in operating systems close up. But
what is most riveting is the passion. Criticism
of other freeware also abounds: listen to Linus
Torvalds’ views on an editor called Emacs (nb
a serious software detraction is size):2
The Emacs editor is horrible for instance, while
Linux is larger than Emacs, at least Linux has the
excuse that it needs to be.
Criticism that counts ± to break our software
chains and bring us quality, not monopoly, in
our code.