My alternative busines model

Alessandro Rubini rubini at
Tue Dec 3 22:46:44 UTC 2002

> It is plain dangerous for software to be a service industry. You 
> will, in time, come to work for the lowest price which means mass 
> unemployment here and plenty of work in the third world.

Actually, it happens to products. A lot of the cheap toys sold here
are built in China, a lot of the commodity hardware I get comes from
Taiwan. Exactly for the reasons you outline.

Services, on the other hand, tend to be more localized. TV programs
are mainly made up in the same country, repair shops serve you best
when they are local, same for travel agencies and legal consulting.

What you should think about, in my opinion, is not a software package
as a still item, that is bought and used.  It's more of a living thing
that requires some (though little) human intervention to be actually
useful to the final customer.

And R&D costs is covered by service activity. Who offers a service has
to be able to offer a better service over time. The cheap ones who
can't do R&D will offer a worse service; some clients will choose one
kind some clients will choose another.

I'm not completely sure, but pretty confident this is the way to go.

> Free software only makes economic sense if it's a service. I 
> furthermore posit that it being a service is an extremely short-
> sighted view with serious repercussions for the industry.

If it's a service, you shouldn't talk about industry.  What industry
do your refer to here? Hardware industry? Will they build less
hardware when I can transfer my service (the OS) from the old computer
to the new one without paying for it again and again?

Sure Free Software doesn't offer the high revenue stream that most
proprietary licenses generate. But is this a problem for anyone except
big corporations?  People and companies that now pay the software tax
over and over will have plenty of money to invest in their fields of
activity, possibly in the IT area if that can help them working
better.  Those that currently don't pay the tax will be able to use
technology nonetheless and thus work better, probably being thus able
to invest a little in IT.

What's the problem in distributed knowledge and programmers all around
the place, as opposed to a big concentration of programmers in one
place and few or none of them elsewhere?


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