From alsa-devel-owner@alsa.jcu.cz  Mon Mar  1 01:36:03 1999
Received: from www.tomy.net (IDENT:root@www.tomy.net [209.186.149.104])
	by marvin.jcu.cz (8.9.1a/8.9.1) with ESMTP id BAA22934
	for <alsa-devel@alsa.jcu.cz>; Mon, 1 Mar 1999 01:34:39 +0100
Received: from cygnus.com (thudson@jimi.tomy.net [192.168.1.2])
	by www.tomy.net (8.8.7/8.8.7) with ESMTP id TAA14227
	for <alsa-devel@alsa.jcu.cz>; Sun, 28 Feb 1999 19:34:37 -0500
Message-ID: <36D9E09D.53B87A4@cygnus.com>
Date: Mon, 01 Mar 1999 00:34:37 +0000
From: Thomas Hudson <thudson@cygnus.com>
MIME-Version: 1.0
To: alsa-devel@alsa.jcu.cz
Subject: OT: Open Source Business models, was Re: (SB Live) Free drivers or not? 
 (fwd)
References: <Pine.LNX.4.05.9902281726580.20895-100000@screech.cs.alfred.edu>
Content-Type: text/plain; charset=us-ascii
Content-Transfer-Encoding: 7bit
Reply-To: alsa-devel@alsa.jcu.cz
Sender: alsa-devel-owner@alsa.jcu.cz
Precedence: list

"Christopher T. Lansdown" wrote:
>         Btw, you might be interested in taking a look at the economic
> model of Cygnus software.  They make a great business with their main
> produt (gcc) being GPLd.

Cygnus had revenue of $24 million last year. We employ just under 200
people. Why would anyone pay for GCC, when it is free? Several ways.
Because it is free, it is a standard. Before I worked for Cygnus, I
used GCC, even though my company owned commercial compilers. A lot
of commercial compilers really suck. After you've spent a couple of
days fighting a bug in your code only to find out it was a compiler
error, you want GCC just as a sanity check. Then you find out GCC is
superior in quality to many commercial alternatives. Because it is
open and free, there are more contributors to GCC than any other 
compiler. Even Bill Gates couldn't afford to have that many people 
working on Visual C.

But your boss doesn't like the idea of free software, after all, "it's
unsupported", in comes Cygnus. We sell support packages.

Secondly, uP vendors realize that it is a standard, and anyone can
get it for free. They pay Cygnus to add support for their chips.
GCC supports a staggering number of chips. uP vendors want you
to use their chip in your next project. If a compiler is available
free, you can evaluate new chips for your next embedded project.
The embedded world is big money. How many CPU's are in your car,
cell phone, microwave, etc.

But Cygnus isn't the only successful Open Source business model.
RedHat had revenues of $20 million last year. Why pay $50 for
a RedHat CD when you can download it for free? Many say as a 
convenience, since it takes time to download such a large
distribution. But you can buy a RedHat Linux CD from Cheap Bytes
for $2. I would say it is brand name recognition and 
product placement. John Doe walks into CompUSA and buys it
because he has heard of RedHat. RedHat gets continued sales
from people (like me) that would rather spend time making music
than making sure every package is going to work together
and be secure. It's not product, it's service.

I've wanted to create a CD distribution of all the great music
packages on the Net, perhaps w/ better integration and
docs. Unfortunately, many, like CSound, restrict resale in 
this manner.

I think you can sell something just like a commercial product
and still GPL it. The number of people w/ the savvy to download
sources and compile themselves is relatively small, even more
so w/ music apps. No one is going to compete w/ you until
you're noticed, i.e. profitable. Wind River competes w/ Cygnus
by selling support for GCC, but all the maintainers of GCC
work for Cygnus, so, "who you gonna call?"

The other advantage is that open source is such a strange
business practice that it takes time for competitors to
figure out how to react. When that great cross platform,
open source music creation environment (with hundreds of 
programmers contributing to it), gradually moves into the 
music worlds consciousness, how is Cakewalk and Opcode
going to react and compete. Why pay $500 for something I
can download off the net? I heard "your company here" makes
a great distribution.

If the current game sucks, change the rules...



Thomas
P.S. Sorry for the off topic post. I worked 17 years for
the research arm of Michelin, and my contract wouldn't let me 
contribute to the free software movement. That's why I 
chose Cygnus.

