On Rough Type, IT guru Nicholas Carr says:

There's another important economic force at work here . . . . It's the fact that many companies have a vested interest in turning software into a free resource and, cynically or not, can use the "open source community" to further that interest. For these companies - think IBM or Red Hat or Google or even Intel - software is a complement to their core product or service, and as Joel Spolsky points out in his excellent book Joel on Software, "demand for a product increases when the price of its complements decreases. In general, a company's strategic interest is going to be to get the price of their complements as low as possible ... Understanding this strategy actually goes a long, long way in explaining why many commercial companies are making big contributions to open source." By making software free, you can expand demand for your own products - and maybe hurt a competitor to boot.

So if you're contributing to an open source initiative to make the world a better place, that's great - but you probably won't want to pay too much attention to the underlying economics. You may discover that you're just a cog in a very big machine that's shifting dollars from one "malevolent" big company to another.

posted by James DeLong @ 4:04 PM | Software

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