Posted on 08/17/2004 11:38:59 AM PDT by Charlotte Corday
Take a look at the largest companies in the world. Of them, only Microsoft makes the majority of its money from software licensing. A handful of them ..... make some of their money from software sales, genally a small part. A few... make a small portion of their revenue from retail sales of software. So the vast majority of large global companies consume software rather than produce it...if the cost of software is driven down by competition from open source, and thus a major cost of doing business is reduced for global industry, will it be a net gain or net loss to the economy?
And the cost savings can come in unexpected places. A large corporation that I know of replaced thousands of Sun/Solaris servers with inexpensive Intel/Linux ones and ended up saving $250,000 per year -- in electricity -- on top of millions of dollars in licensing fees. Where did that money go? Did it disappear into the ether? Well, Sun Microsystems (and the power company) probably thinks it did, but in fact, instead of going to Sun, it went to pay salaries, to fund new projects, and back to the shareholders in dividends and a kick in the stock price due to greater profits. In other words, it went right into the economy.
And economics is not a zero-sum game....if a useful piece of software becomes available at little or no cost to many companies, especially to companies that otherwise would not have been able to afford such software, it can give a major boost to that company's productivity. In that case, even if no money was spent, all those companies increased their efficiency and revenues. Increased productivity and decreased expenses can have a massive effect on a company's bottom line.
(Excerpt) Read more at osnews.com ...
great article- I know I can't wait to write some free software and give it away
but..in the meantime, who pays my salary?
Tell that to the thousands of US engineers layed off by Sun since Unix has been scavaged by "free Linux".
So the vast majority of large global companies consume software rather than produce it
And these global companies now no longer have to purchase their software from the U.S., they can and now take free copies of Linux and rename them, like when the Chinese take a free copy of "Red Hat" and rename it "Red Flag".
LOL! As a former Solaris Admin, this really struck home. The company probably also saved on workman's comp, when the admins quit moving equipment with cranes and pallet jacks.
/john
OSS and operating systems make sense in certain parts of the business environment and not others. Right now it's mainly the server side that's benefiting. With servers, you usually have to have IT guys anyway, so why not have the IT guys know linux or bsd instead of solaris or windows servers?
Simply, totally, not true.
I work at a large state government IT agency. Microsoft is by far the cheapest of our licenses. Oracle and IBM far, far outstrip Microsoft in licencing fees (in fact, we're in a huge fight with Oracle over their tripling of the licencing fees). I know of one agency that pays IBM $63 million PER YEAR for licensing - for the mere privlige of using IBM products for another year. That's not counting any software sales, that's just licensing for existing software and hardware. There are many, many other software companies that exist because they keep their hands on the money pump in the form of licensing fees.
I have first hand, purchasing experience with this, and this author is completely wrong on this point - practicing a little Open Source FUD of his own.
You need to read the article. Do you think that the companies who switched to Linux put all that cash they saved in a big jar and buried it under the parking lot? What I said was "good for capitalism" not "good for one or two big suppliers"
global companies now no longer have to purchase their software from the U.S., they can and now take free copies of Linux and rename them, like when the Chinese
The Chinese were probably pirating 90% of what they used anyway. Not much loss there.
That, in a nutshell, was the business model that made Microsoft huge in the first place. Bill Gates is the Henry Ford of software- his products may not be the best on the market but they're affordable to nearly everyone. Linux is far from "free" if you value your time. I tried Red Splat on one PC in my office and spent 2-3 hours a week reviewing all of the update notices.
Are you investigating any alternatives to Oracle?
OSS coders are often people working to create or enhance something that fills a particular need for them - so the fact that they make something that makes their job easier is the compensation. Having your name on a project also enhances your resume and your pay potential in the job market. There are upsides, or thousands of people wouldn't have been doing it for the past decade. There is a pay off, it's just not the 'instant gratification' type.
As far as the money making directly part is concerned, red hat has been doing just that - making money by offering knowledge, expertise,and support -just like the MCSE's are doing - for a product people already paid for (and presumably bought support for).
So where does the US profit when Germany uses a copy of "free Linux" to avoid purchasing any US software anymore?
http://www.debianplanet.org/node.php?id=1118
It's happening all over the world too. French Mandrake is based on Red Hat, whithout a dime back to the US. Countless others.
Spoken like a life-long welfare recipient.
Any entrepreneur starts off with something he has a passion for, gets good at it while supporting himself doing something else, then goes out and makes some real money.
Some truth in what you say. Microsoft is already behind in server installations. Desktop (office) applications will be the next to go. Desktop OS's will be the last holdout.
What about public libraries?
Tom Clancy doesn't get one red cent when I go to the library to read his latest schmarn.
But old Tom doesn't seem to be hurting much, does he?
how do people outside the US that code for free profit when red hat sells a copy of their linux distro?????
It's a two way street but you want to incite based on one part of the equation. Red hat knew the rules when started up, and they're making money off of them. You seem to expect them to take the microsoft position - "Why can't we make money off of everything???"
According to an analysis by InformationWeek of U.S. Bureau of Labor Statistics employment data, the number of IT managers has soared since 2000, while the ranks of computer programmers and computer scientists-systems analysts has plummeted.
The IT labor force--those who consider themselves IT professionals, whether employed or unemployed--fell to 3.4 million during the first half of 2004, down from a five-year peak of nearly 3.6 million in 2001. That represents a 4.5% decline in the IT labor force. At the apex, Americans employed in IT approached 3.5 million; this year, that number fell to 3.2 million, a decline of nearly 7% in three years.
IT unemployment, which hovered just below 3% in 2000 and 2001 before businesses felt the full brunt of the dot-com collapse and recession, has stabilized between 5.5% and 6% over the past three years. During the first six months of this year, IT joblessness averaged 5.5% ref
------------------
There are many econmic factors influencing this including outsourcing, maturing of the industry, realization that software is now available instead of having to build everything yourself, and the impact of open source, to name just a few. My guess is that a significant portion of the remaining US programmers and computer scientists-systems analysts have suffered wage reduction as well, but that is just a guess.
Any company that uses open source but needs to apply it to their business processes.
And rather than developing competing products you'll be advancing the entire software knowledge base forward.
While I agree with the general tenor and tone of the article, I'm a little uncomfortable about the fact that they imply that MS is the only really large company that makes most of their money from software licensing. That leaves out CA, Adobe and others who are absolutely huge.
Great post, thanks. It's a waste of time & resources to keep having to do (or pay) for work that was done decades ago and whose authors (or marketers) have already been well compensated and which should long since have entered the public domain.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.