Furthermore, I don't bill them for the code -- I bill them for my time. Even though "time" does not perfectly equate to "service," it's a lot closer to it than a software license is, because it naturally includes any time I spend setting it up for them, providing support, and making further modifications.
I don't mean to say that all software providers should charge by the hour. Rather, consider that what you're providing to the user is a service rather than a product. Perhaps instead of charging for the XYZ package, you should charge for supporting it, configuring it, customizing it, and educating the users.
That still leaves a lot of unanswered questions, like "How do major new enhancements that existing users don't urgently need ever get funded? This may not seem like a topic specific to IT consultants. I've always said, though, that as consultants we have a duty to our clients to keep an eye on their business success. Their success supports our own, after all.
That's especially true in the case of software vendor clients, where our efforts go right to the heart of their business. Thanks to Chad Perrin, who shares my enthusiasm for free software , for suggesting this topic. Chip Camden has been programming since , and he's still not done. An independent consultant since , Chip specializes in software development tools, languages, and migration to new technology.
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Recently Qt had introduced another License LGPL which allowed proprietary software developers use that license to create proprietary software but without the support that comes by default with the proprietary license. They still offer the proprietary license with added support. The original Qt model taps in on the proprietary software developer market to fund Free Software development. Dual Versioning - This is another interesting but slightly controversial model.
In this model a company maintains two different versions of the same application, one on a public server under a Free Software license and another on a closed server under a proprietary license. The development on the Free Software version happens under the leadership of company developers but with contributions from the community.
Intensive testing and development of bleeding edge features happens on this version. Mature and tested features get reimplemented on the proprietary version by the company developers.
The proprietary version will then be available for customers who pay the licensing cost of the software and the software will be supported by the company directly. The free version will be available for customers who do not want to pay for the licensing cost but then they will have to depend on the support of the community and will be taking the risk of having too many untested features and bugs in their version.
This model subsidizes development costs through the involvement of the community and makes money through from the proprietary software user market. Offering Customization Services - No two people are alike and you can trust this. So different people would have different requirements and different likes and dislikes.
This would reflect in their needs for features and functionalities in any software. Free Software companies tap in on this by offering paid customization services on their Free Software applications. Other companies who distribute the software can also do this but like mentioned earlier the developer company would retain their knowledge edge by being the original developers.
Even then there is scope for third party companies to offer services on the same software. In fact a large market thrives on such services and quite a lot of the small businesses in the Free Software domain depend on this model completely. The original developer company can charge a premium for their services while leaving enough room for other companies to generate revenue using the same model. Interestingly the model is more popular for Free Software applications driven by the community as a whole rather than by a company.
Good examples would be the CMS frameworks Drupal and Joomla which are used by a large number of web application companies. This is a purely services based model where money is made directly on the labour invested. Offering Hosted Services with Maintenance - With the emergence of Internet as THE platform of choice, a slew of Free Software applications have emerged targeting this domain; applications developed and maintained by the community as well as those developed and maintained by companies.
To supplement this, companies have emerged, who offer to host and maintain these applications for users, who do not have the technical skills to do so, or who do not want to invest directly in doing so.
Such companies could either have been the original developers of the application, in which case they offer higher levels of expertise, or third party companies in which case they offer their expertise and the hassle-free nature of the model as their USP. This model makes money through sales of the hosting packages as well as on the labour invested in support The strategies mentioned above are only some of the popular methods in use.
There are other ways in which companies generate revenue from the Free Software market and different strategies are still being tried out. It is a fast evolving market and only time will tell as to what is the limit of possibility in this domain. But one thing is sure, there is money in Free Software and there is quite a lot of it.
It might be worthwhile to remember that one of the recent Free Software company acquisitions, that of MySQL by Sun Microsystems touched a billion dollars. The cost of Free Software Development Whether you are developing Free Software or proprietary software you have to invest time and effort in planning, designing, implementing, testing, fixing, updating and maintaining software.
Each of these activities require some investment of time and effort towards it and time and effort equals money and this monetary value constitutes the cost of development of the software. Proprietary software companies recover this cost when they sell their software to their users.
Now the cost of development of a software is always a finite amount and mostly calculable. So ideally the price of proprietary software has to fall with every sale as a part of the cost is being recovered with every sale.
But this does not happen and the users keep on paying at a constant rate for this diminishing cost for ever which might sound a bit unfair for the user. Free Software business models makes a different and more fair pricing structure available for the users. So obviously there must be some other way of covering the development costs and Free Software development models have found probably the ideal one.
This is totally different from the captive development paradigm used in proprietary software development. In this system a percentage of the cost of the software development, be it testing or bug fixing or new development, is being borne by the community in return for the right to use the software which they get when the software is released as Free Software. The company or the developer would then have to recover whatever additional costs and their operational margins through one of the business models discussed earlier.
If this can be extended in an ideal system the complete cost of development will be borne by the community and the need of a company can be eliminated completely. Something similar is indeed happening with Free Software applications maintained and developed by communities. A good example would be the Drupal CMS mentioned earlier. However we do not live in an ideal system and a company with vested monetary interests can still drive Free Software development far more aggressive and normally better than typical community based Free Software development.
It is because, well because they are human and humans make mistakes. Free Software development normally works through the contributions of users who are developers themselves.
As opposed to this proprietary software development is and will always be done with a limited number of developers.
During Free Software development there are too many eyes looking at a given piece of source code during a given period of time to let mistakes to pass through easily and this works much better than in proprietary software development, where there are far fewer people looking at a given piece of code. Supposedly the source code for the Linux Kernel is the most read piece of software source in the history of software development, the numbers running into millions.
As opposed to this the leading proprietary operating system development team would be perhaps strong and the kernel team would be far smaller. So the first technical advantage of Free Software is its resilience to mistakes. It is not that Free Software does not have errors or bugs, but that they get mopped up pretty fast. Here is the second technical advantage of Free Software - the short life cycle of an error.
Even when a proprietary software development team identifies an error they might not want to publicize the error unless the errors result in security issues. These would then normally be taken care of in the next update cycle. As opposed to this in Free Software development, if and when a capable developer comes across a problem it wouldn't take much time before the problem gets fixed in the repository. Now this fix would then be available to users who would like to get it fixed.
Again the contrast increases if the errors where noticed by a normal user. For a proprietary software the error will have to go through the proper support cycle before it can reach the developer who might then just schedule the fix for the next update. This would happen only if the user decides to pay for support and report the error. In the case of Free Software all it would need for the error to get fixed would be for one of the many users to just let the community know that the error exists and someone in the community would take care of the issue just like in the first case mentioned above.
Economical Advantages of Free Software The main economic advantage of Free Software is that it reduces or in fact takes out the financial entry barrier for the use of software. Software is only a tool for processing information.
So taking out this barrier allows people from all sections of the society to take advantage of the power of Information Technology to advance their lives. It also opens up opportunities for entrepreneurs to set up shops with very little initial investments. This advantage of low initial investment does not have to apply to small entrepreneurs alone. It applies to enterprises of any size and of both public and private nature.
To really understand the importance of the economic advantage mentioned above we just have to calculate the cost of computerizing an entire country like India, computerizing as in - getting computers with required software to all the people and all government departments and agencies, and compare the costs of this process based on proprietary software versus that based on Free Software.
The differences would be massive and such huge amounts of public money can always be put to other developmental activities if it can be spared. As explained earlier proprietary software makes constant recovery of a diminishing cost. What this does is that wealth get accumulated at distinct points in the society without proper dissipation of labor or generation of value. There is nothing unfair about this as the transactions are purely voluntary.
However concentration of wealth with few individuals or enterprises is never good for the society and it does not have to promote such systems. It is not that it has to fight such systems, or make it difficult for such systems to survive, but just that it does not have to spend public money in promoting such systems.
So when government establishments invest in Free Software they effectively ebb the concentration of funds via the proprietary software channel.
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