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Joel on Software: Strategy Letter V [An Economist's View of OSS]

Jun 19, 2002, 11:00 (22 Talkback[s])
(Other stories by Joel Spolsky)


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"Let me repeat that because you might have dozed off, and it's important. Demand for a product increases when the prices of its complements decrease. For example, if flights to Miami become cheaper, demand for hotel rooms in Miami goes up -- because more people are flying to Miami and need a room. When computers become cheaper, more people buy them, and they all need operating systems, so demand for operating systems goes up, which means the price of operating systems can go up.

"At this point, it's pretty common for people to try to confuse things by saying, 'aha! But Linux is FREE!' OK. First of all, when an economist considers price, they consider the total price, including some intangible things like the time it takes to set up, reeducate everyone, and convert existing processes. All the things that we like to call 'total cost of ownership.'

"Secondly, by using the free-as-in-beer argument, these advocates try to believe that they are not subject to the rules of economics because they've got a nice zero they can multiply everything by. Here's an example. When Slashdot asked Linux developer Moshe Bar if future Linux kernels would be compatible with existing device drivers, he said that they didn't need to. 'Proprietary software goes at the tariff of US$ 50-200 per line of debugged code. No such price applies to OpenSource software.' Moshe goes on to claim that it's OK for every Linux kernel revision to make all existing drivers obsolete, because the cost of rewriting all those existing drivers is zero. This is completely wrong. He's basically claiming that spending a small amount of programming time making the kernel backwards compatible is equivalent to spending a huge amount of programming time rewriting every driver, because both numbers are multiplied by their "cost," which he believes to be zero. This is a prima facie fallacy. The thousands or millions of developer hours it takes to revise every existing device driver are going to have to come at the expense of something. And until that's done, Linux will be once again handicapped in the marketplace because it doesn't support existing hardware. Wouldn't it be better to use all that 'zero cost' effort making Gnome better? Or supporting new hardware...?"

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