Eric Raymond Stirs the Cauldron at Ziff-Davis OpenSource Forum OpeningJun 30, 1999, 11:18 (3 Talkback[s])
(Other stories by Dwight Johnson)
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By Dwight Johnson
The Ziff-Davis Open Source Forum opened this morning in Austin, Texas.
Designed to help enterprise IT management assess the real potential of Linux and other open source software as a solution for business, the conference is the only event of its kind to focus on the business and technical pros and cons of Linux and the open source software model.
Eric S. Raymond gave the opening keynote on "The Magic Cauldron: Economics and Business Models for Open Source Computing," which was based on his recently published writing on the same subject.
Speaking to an audience of industry and business leaders, Eric asked the fundamental question "How do we make money at this?"
According to Eric, it is first necessary to dynamite the myth of software production dynamics that the sale value of software governs production. We must distinguish between the use value and the sale value of software. The use value is the economic value you derive from using the software. The sale value is, of course, its value when you sell it to businesses or individuals.
Eric pointed out that it is easy to verify that the use value is dominant in production by looking in the classified section of any newspaper for programming jobs -- 19 of 20 programmer jobs are for in-house only applications.
After exploding the myth of software sale value, Eric made the important point that the assumption that sale value is the predominant source of software value has lead to serious problems in the software industry in which software companies attempt to recover the entire cost of software production in the initial sale price, thus neglectiing later service and support. This leads to a single product dominating its market category and the spiral of continual upgrades.
Since software is really a service industry, the best solution turns out to be open source. Eric outlined the business models that have been successful for making money with open source software as well as several hypothetical models, using as real-world examples companies like Netscape, Red Hat, Cygnus, Digital Creations and O'Reilly.
For more information on Eric Raymond's 'The Magic Cauldron', see http://www.tuxedo.org/~esr/writings/magic-cauldron/.
Other keynotes for this morning are by Caldera CEO Ransom Love and Linux International Director Jon 'maddog' Hall.
The Ziff-Davis Open Source Forum will continue today and tomorrow with technical sessions.
Slated for tomorrow are keynotes by Red Hat President Matthew Szulik and Tim O'Reilly, President of O'Reilly and Associates.
Linux Today is a sponsor of the Ziff-Davis Open Source Forum. Other sponsors are: Red Hat, Caldera, LinuxMall, Dell, Sendmail, Cobalt, VA Linux Systems, SuSE, SCO, Hewlett Packard and Atipa.
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