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Christian Science Monitor: Eric Raymond on open-source & why Microsoft's business model will fail

May 10, 2000, 00:59 (9 Talkback[s])
(Other stories by Ryan Finnin Day)

"Open-source is not so new and wacky. The method for developing it is remarkably similar to the one humankind has used since the 1600s to deal with complex problems that require precision: namely, the critical peer-review process used in experimental science. Every innovator is required to "show your work."

"Microsoft's business plan will fail in the first or second quarter of 2001. The logic goes like this: Microsoft depends on stock options to draw top talent. Stock options are an incentive as long as Microsoft can continue increasing revenues. But what happens if it can't?"

"A big source of Microsoft revenue is Windows licensing through OEMs (original equipment manufacturers, like Dell and Compaq). Now, licenses for Windows cost the PC-makers between $70 and $80 per box. As computers get cheaper and more powerful, he says, there will come a time when the price of hardware falls below a threshold that will make the Windows tax on each box too onerous for the OEMs to bear. Raymond predicts this will occur in the first half of 2001."

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