Blog: Mark Madsen

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Open Source: Better Than Free

Kevin Kelly wrote an excellent article which, while not about open source, explains very well what the economics of software really are. You could read this entire piece as how to sell open source software, and why open source firms make sense. Here's an excerpt:

The instant reduplication of data, ideas, and media underpins all the major economic sectors in our economy, particularly those involved with exports -- that is, those industries where the US has a competitive advantage. Our wealth sits upon a very large device that copies promiscuously and constantly.

Yet the previous round of wealth in this economy was built on selling precious copies, so the free flow of free copies tends to undermine the established order. If reproductions of our best efforts are free, how can we keep going? To put it simply, how does one make money selling free copies?

I have an answer. The simplest way I can put it is thus:

When copies are super abundant, they become worthless.
When copies are super abundant, stuff which can't be copied becomes scarce and valuable.
When copies are free, you need to sell things which can not be copied.

Well, what can't be copied?

From my study of the network economy I see roughly eight categories of intangible value that we buy when we pay for something that could be free.

In a real sense, these are eight things that are better than free.

I'm off the Open Source Think Tank now. Should be a great couple days.

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