Just noticed 2 recent "academic" papers at http://mice.uni-muenster.de/mers/index.htm
Open-Source Software: An Economic Assessment Open Source-Software: Eine volkswirtschaftliche Bewertung
The Impact of Microsoft Deutschland GmbH on the German IT Sector Die Bedeutung der Microsoft Deutschland GmbH für den deutschen IT-Sektor
Their conclusion in short: Microsoft good, Free Software Bad. Does anyone know something about the authors?
w.
I am not at all surprised that the study by Kooths et al comes to this conclusion. According to the Heise-newsticker http://www.heise.de/newsticker/data/tol-10.12.03-002/ the study was commissioned by - who would have guessed - Microsoft Germany! Michael
Wouter Vanden Hove wouter.vanden.hove@pandora.be schrieb:
Just noticed 2 recent "academic" papers at http://mice.uni-muenster.de/mers/index.htm
Open-Source Software: An Economic Assessment Open Source-Software: Eine volkswirtschaftliche Bewertung
The Impact of Microsoft Deutschland GmbH on the German IT Sector Die Bedeutung der Microsoft Deutschland GmbH für den deutschen IT-Sektor
Their conclusion in short: Microsoft good, Free Software Bad. Does anyone know something about the authors?
w.
1. regarding my last posting: I do not imply that there is something phoney about these papers; I'm just saying that I am not surprised that the conclusion is pro Microsoft, when Microsoft Germany initiated these papers.
2. I have not had the time yet to read through these papers, but from an economical point of view the conclusion actually could make sense: if you have companies that sell mediocre proprietary software you need other companies that offer software and services to meliorate the original product. (it is just like the environment pollution thing: having a company that pollutes nature, and then having a company that does the decontamination and clean-up economically makes perfectly sense: both produce something and thus help raise the gross domestic product. Having only one company with a "green" pruducing scheme is in terms of GDP less good). Michael
Wouter Vanden Hove wouter.vanden.hove@pandora.be schrieb:
Just noticed 2 recent "academic" papers at http://mice.uni-muenster.de/mers/index.htm
Open-Source Software: An Economic Assessment Open Source-Software: Eine volkswirtschaftliche Bewertung
The Impact of Microsoft Deutschland GmbH on the German IT Sector Die Bedeutung der Microsoft Deutschland GmbH für den deutschen IT-Sektor
Their conclusion in short: Microsoft good, Free Software Bad.
The idea of an OSS movement that reduces the overall volume of economic revenues is widespread but wrong. There is no company that burns the money that is saves on OSS. The money is simply spent on other purposes creating the same gross domestic product. Therefore 'uneconomic' damage and repair are of no benefit for the economy.
Hans
On Wednesday, January 7, 2004, 5:06:26 PM, Michael Groß wrote:
[snip] (it is just like the environment pollution thing: having a company that pollutes nature, and then having a company that does the decontamination and clean-up economically makes perfectly sense: both produce something and thus help raise the gross domestic product. Having only one company with a "green" pruducing scheme is in terms of GDP less good). _______________________________________________ Discussion mailing list Discussion@fsfeurope.org https://mail.fsfeurope.org/mailman/listinfo/discussion
On Wed, 07 Jan 2004 05:38:19 +0000, Wouter Vanden Hove said:
Just noticed 2 recent "academic" papers at http://mice.uni-muenster.de/mers/index.htm
The German c't magazine runs this article by Stefan Krempl
http://www.ct.heise.de/ct/04/01/045/
with the conclusion "Die bezahlten Studien können so hauptsächlich als neuer Hinweis darauf gesehen werden, wie groß Microsoft die Bedrohung durch freie Software einschätzt." (Those paid reports should primarly be viewed as an indication on how seriously Microsoft rates the threat of Free Software [for their business]).
There is also an article in the current German Linux-Magazin (http://www.linux-magazin.de/Artikel/ausgabe/2004/02 (TOC only)) by Harald Milz where he claims that this job motor by MS is only due to all the problems and defects of MS software and thus a lot of companies make a living on working around these bugs. With MS software getting better over time this market will dimish.
Much like car vendors would deliver broken cars and many garages are required to let the customers make actual use of their new cars. Whether this is an advantage for the economy is another question ;-).
Werner
Having read the abstract of "Open-Source Software: An Economic Assessment", I have to take the authors to task on some of their initial assumptions, such as: "...the main purpose of making the source code freely available is to prevent a price-controlled market from evolving in the first place." - I can think of many reasons why source code is made freely available but this is surely not the main reason.
"Their motivation stems from an individual interest in solving a problem, the technological challenge or the hope of establishing a reputation. However, software supply should be determined by users' actual wants." - This seems to mean that the authors are in favour of a Soviet style demand economy. If ever there was an industry that has shown how supply can stimulate demand it must surely be the software industry!
"The open-source model is poorly suited to be the only alternative form of software development." - An obvious straw man. I know that a few OSS advocates would like to see OSS as the only form of software development but the majority accept the diversity of development models in current use. I don't know anyone that advocates a single OSS/commercial software split.
"If software is available free of charge, its development does not generate proceeds, income, jobs or taxes. This inability to add value cannot be compensated for by using complementary strategies." - Surely it is a mistake to imply that added costs means added value. This is clearly the sales pitch of a software vendor. What they are missing is that there is a huge amount of software developed by organisations, who are not software vendors, for their own needs. These organisations, both commercial and non-commercial, can see the many non-tangible benefits of sharing their code with the wider community. A illustrative example that comes to mind is the waste heat produced by power stations. Pumped straight into rivers and lakes it can be a form of pollution. Electricity generators are happy to 'give away' the heat to market gardeners who use it to heat greenhouses and grow products that would otherwise be uneconomic if they were to pay for the heating. This is exactly the situation that the paper's authors claim does not exist: proceeds, income, jobs and taxes from something 'free'. In the same way organisations, from charities to banks, generate software as a by-product of their normal activities. As by-products are not the principal economic activity of the organisations that produce them, the concept of added-value is not relevant. This is precisely why software vendors 'don't get' OSS. Their principal economic activity is selling software licences. If there were companies that existed to make profits from the sale of hot water, they would be just as pissed off at electricity companies 'giving away' their excess heat in the form of hot water!
Mark.
On Wed, 2004-01-07 at 05:38, Wouter Vanden Hove wrote:
Just noticed 2 recent "academic" papers at http://mice.uni-muenster.de/mers/index.htm
Open-Source Software: An Economic Assessment Open Source-Software: Eine volkswirtschaftliche Bewertung
The Impact of Microsoft Deutschland GmbH on the German IT Sector Die Bedeutung der Microsoft Deutschland GmbH für den deutschen IT-Sektor
Their conclusion in short: Microsoft good, Free Software Bad. Does anyone know something about the authors?
w.
Discussion mailing list Discussion@fsfeurope.org https://mail.fsfeurope.org/mailman/listinfo/discussion
Having read the abstract of "Open-Source Software: An Economic Assessment", I have to take the authors to task on some of their initial assumptions, such as: "...the main purpose of making the source code freely available is to prevent a price-controlled market from evolving in the first place." - I can think of many reasons why source code is made freely available but this is surely not the main reason.
"Their motivation stems from an individual interest in solving a problem, the technological challenge or the hope of establishing a reputation. However, software supply should be determined by users' actual wants." - This seems to mean that the authors are in favour of a Soviet style demand economy. If ever there was an industry that has shown how supply can stimulate demand it must surely be the software industry!
"The open-source model is poorly suited to be the only alternative form of software development." - An obvious straw man. I know that a few OSS advocates would like to see OSS as the only form of software development but the majority accept the diversity of development models in current use. I don't know anyone that advocates a single OSS/commercial software split.
"If software is available free of charge, its development does not generate proceeds, income, jobs or taxes. This inability to add value cannot be compensated for by using complementary strategies." - Surely it is a mistake to imply that added costs means added value. This is clearly the sales pitch of a software vendor. What they are missing is that there is a huge amount of software developed by organisations, who are not software vendors, for their own needs. These organisations, both commercial and non-commercial, can see the many non-tangible benefits of sharing their code with the wider community. A illustrative example that comes to mind is the waste heat produced by power stations. Pumped straight into rivers and lakes it can be a form of pollution. Electricity generators are happy to 'give away' the heat to market gardeners who use it to heat greenhouses and grow products that would otherwise be uneconomic if they were to pay for the heating. This is exactly the situation that the paper's authors claim does not exist: proceeds, income, jobs and taxes from something 'free'. In the same way organisations, from charities to banks, generate software as a by-product of their normal activities. As by-products are not the principal economic activity of the organisations that produce them, the concept of added-value is not relevant. This is precisely why software vendors 'don't get' OSS. Their principal economic activity is selling software licences. If there were companies that existed to make profits from the sale of hot water, they would be just as pissed off at electricity companies 'giving away' their excess heat in the form of hot water!
Mark.
On Wed, 2004-01-07 at 05:38, Wouter Vanden Hove wrote:
Just noticed 2 recent "academic" papers at http://mice.uni-muenster.de/mers/index.htm
Open-Source Software: An Economic Assessment Open Source-Software: Eine volkswirtschaftliche Bewertung
The Impact of Microsoft Deutschland GmbH on the German IT Sector Die Bedeutung der Microsoft Deutschland GmbH für den deutschen IT-Sektor
Their conclusion in short: Microsoft good, Free Software Bad. Does anyone know something about the authors?
w.
Discussion mailing list Discussion@fsfeurope.org https://mail.fsfeurope.org/mailman/listinfo/discussion
A comment to a study, published by the Muenster Institute for Computational Economics (MICE) http://mice.uni-muenster.de
The cites are taken from the published abstract of the study.
| MICE Economic Research Studies Vol. 4: | Open-Source Software: An Economic Assessment | | Ph. D. Stefan Kooths, Ph. D. Markus Langenfurth, Nadine Kalwey
| 1. No Market at the Core Open-Source Development | Open-source software is developed outside of market mechanisms, | as the main purpose of making the source code freely available is | to prevent a price-controlled market from evolving in the first | place.
That is absolutely wrong! OpenSource and Free Software IS developed according to the rules of market mechanisms: They take part in the "price-controlled market" with THEIR prices. They try to compete against their competitors with THEIR prices and, most important, by "making the source code freely available". And that's exactly what the term "market" is about: competition.
So, it is absolutely wrong to say, that "Open-source software is developed outside of market mechanisms".
Nearly the whole study is based on this false assumption.
| As such, the open-source model (dominated by restrictive | licenses such as the GPL) has a nonmarket core.
1. As shown above, the market core of OpenSource and Free Software is to compete with other software industries.
2. The GPL only restricts to restrict. It is only restrictive to someone, who tries to restrict the access to software. To those it is really restrictive, but only to those!
Well, please keep in mind, that software companies are not the only ones who use computers; they are not the only economic entities in the IT-sector.
| There are commercial business models based on open-source software, | but they impact OSS development indirectly, if at all.
Do they talk about software producing businesses? Of course they have an "impact" on their own product.
It is true, that they cannot restrict it like other software houses can. But that is inherent: Free Software has to be independent, ie. free. Free from interests of one single company for the benefit of all other computer users (customers).
Or do they talk about commercial business models using software of others? Well, they have a choice. And this once again proves, that market mechanisms do have a strong impact on OSS and FS development.
| In any economy | based on the division of labor, the market fulfills important | coordination functions. However, when software is distributed | free of consideration, it lacks a key coordination component | the information medium of price and, as a result, suffers from | economic and functional deficits.
Price as "information medium"??? Well, probably they could gain that back by labeling their software like this: "If this software wouldn't cost you nothing, it would cost you 100000,12 EUR". ;-)
In fact the price of priceless software IS an information medium. It says: "Our price is 0,- EUR, and that is cheaper than any of our competitors. So take our product if money matters to you at all!" In my opinion that kind of argumentation is fully inside the field of economy and not outside of it. But who am I to teach an institute for economics about economy.
Please notice: In this section the study doesn't talk about OpenSource or Free Software anymore, but about software "distributed free of consideration". But as the study itself stated before: "There are commercial business models based on open-source software", OpenSource and Free Software is most often not distributed free of consideration. And so they are talking about something different here.
For more information read this: http://www.fsf.org/philosophy/selling.html
| 2. Developer Orientation is Not Customer Orientation | At the nonmarket core, volunteer open-source developers work | on projects that suit their own preferences. Their motivation | stems from an individual interest in solving a problem, | the technological challenge or the hope of establishing a | reputation. However, software supply should be determined by | users' actual wants. If there is no market, then there is no | mechanism to steer the interests of developers towards the wants | of customers, either.
"Reputation" is as good a motivation for customer orientation as money is. Even for customers, who are not able or willing to pay extra! And believe me, especially "users' actual wants" often are a real "technological challenge".
Well, let's leave this decision to the market. If OpenSource and Free Software really were so bad, then nobody would use it. Nobody is forced to be free.
| 3. Weak Commercial Software Does Not Mean Strong Open-Source Software | The open-source model is poorly suited to be the only alternative | form of software development. Open-source software development | requires a strong commercial software market. A commercial market | acts as a wellspring of resources for jobs, income and product | ideas for open-source development.
Could anybody explain that to me? Does that mean, that OpenSource developers are so stupid, that they have no ideas on their own? Does that mean, they have no job or income, when they don't work for a software company? Are they too stupid to work for another company inside or even outside of the IT-sector?
Well, most of OpenSource and Free Software is developed in spare time, while there are some, who have a job and income as Free Software developers.
| 4. Open-Source Software Does Not Aid SMEs in the IT Sector | Far from offering extra business opportunities, open-source | software offers only some of the opportunities already available | in the commercial market. Nor is promoting open source a suitable | local-policy tool for supporting SMEs in the IT sector. If | software is available free of charge, its development does not | generate proceeds, income, jobs or taxes. This inability to add | value cannot be compensated for by using complementary strategies.
Not all SMEs in the IT sector are software companies.
Of course a new competitor is a threat to companies. That is the basis of economy. But OpenSource, Free Software and software free of charge only compete with software companies. All other companies in the IT sector benefit from them, especially the SMEs.
| 5. Promotion of Open Source Not a Competition-Policy Tool | State support and subsidization of competitors in | highly concentrated markets is not a competition-policy | tool.
Please note: Here they themselves talk about "competitors in [...] markets", while the rest of the study is based on the assumption, that "Open-source is developed outside of market mechanisms" (sec. 1)!
| Furthermore, such interventions require a level of | information that government authorities simply cannot have.
A very keen statement, indeed. ;-)
| As an IT demander, the state should therefore as stipulated in | budgetary laws be guided strictly by economic considerations.
That's one point I fully agree with. ;-)