“Linux, despite being an entity in itself, has many
distributions. As I understand it, these distributions compete for
a type of “market share” as it were. Which distribution will
have the most “subscribers?” Which one will manage to convert the
most computer users to their cause? Each distribution has its
idiosyncrasies: being extremely user-friendly or unfriendly, coming
with many applications or few, or being suited for “newbies” or
not. This whole bustling community of distributions — Debian,
RedHat, Mandrake, PhatLinux, CorelLinux, Storm, Caldera, and more
— is extremely reminiscent of the economic concept of perfect
competition.”
“There are five basic criteria here. The distributors are price
takers. They create a homogeneous product. They posses perfect
knowledge. There exists a large number of small firms. There is
free entry and exit from the market. All of these criteria can be
met if one looks at this mini-market that we have created that is
constituted by various Linux distributions. Everyone is a
price-taker since the price is, at least in theory, zero. No one
has any control over the price since there is no price to their
product. Everyone is, for all intents and purposes, creating a
homogeneous product. In this case, it is the Linux operating system
with slight variations here and there (one comes with KDE and one
does not, one has Corel WordPerfect 8 and the other does not).
Everyone possesses perfect knowledge, for such is the beauty of
Open Source after all — everyone sharing ideas and creating
something better than before. There exist a large number of small
firms that are, in this case, the various distributions of Linux.
The only reason “small” is emphasized at all is due to the fact
that they have no say over the price, but we’ve been over that
already. And lastly, there is free entry and exit, seeing as how
any single distribution could simply call it quits, or conversely,
any new distribution could come up with a neat name and interesting
variation of Linux and proclaim itself in this mini-market.”