Open source economics – the conundrum

I think I agree with Ian Holsman’s analysis of this article on “How to make money from open source” – actually I would go a bit further. Ian says that you don’t need to be a committer to make money from open source. Indeed, in some ways the big question in terms of “open source economics” has been how to more tightly couple the people doing the valuable work with some percentage of the rewards – at least enough to let them keep hacking.

While it’s evident that open source works, and that there are big economic benefits involved, it’s a tough nut to crack in terms of renumeration for people working on stuff. Selling software is, if nothing else, a really simple mental model that is very easy to grasp – you write software, you sell it. If it’s good, people buy it and you can either reinvest that money, or take it as profit.

Open source software that scratches an itch has immediate benefits to the author, especially if the author manages to get other people on board to help out.

But the category that’s not really covered is the group of people writing something “out of the blue” because they think it’s a cool idea. If it is, and it takes off, they really aren’t guaranteed anything at all for their troubles.

I don’t see too many ways around this while still playing by the rules of the game. There are some clever ideas like dual licensing, but they aren’t applicable everywhere. I suppose you could declare software a public good and get the government involved in its production, but I’m not very enthusiastic about that…

In any case, it’s an interesting topic, and perhaps some day clever entrepreneurs will find better ways of financing the production of open source software.

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