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

“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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