Monday, March 02, 2009

There is no value in free software

One of most ludicrous statements I've heard recently is that "there is no value in free software". Whilst this is certainly true for a product vendor with a business proposition based upon selling a product, this does not mean that viable businesses cannot be based upon free products. The key to success is to make value from the services you provide.

The problem with products is that their success contains their own seeds of destruction. The more widespread an activity becomes (encapsulated in some form of product), the less differential value it has to a user. For example, the activity of CRM has been encapsulated in various excellent products which have gained widespread adoption. They are now so widespread that those products have little or no differential advantage for their users.

Nothing which is ubiquitous can be described as a source of advantage.

The very success of products at various layers of the computing stack (from application to infrastructure) has resulted in ubiquitous and well defined activities. Such activities are now suitable for service provision (hence the growing 'as a service' industries of the cloud computing space). The products themselves are simply becoming the standard output of a service world.

Obviously, this is a bitter pill for those in a product mentality to swallow. It's always uncomfortable to realise that your own success has led to the disruption of your industry.

Nevertheless, in the cloud computing world, value is in the service and not the product. Furthermore, open source reference models provide a means of creating standards, allowing portability and overcoming adoption issues. This means, that the growth of the service industry (and hence value) is more likely to be enhanced by open source (and hence free product). The counterpoint to this is standards built upon proprietary technology. This will simply result in all providers and consumers handing some form of strategic control over to a technology vendor. From a user and societal point of view, this is a complete disaster, it would be like someone "owning" the electricity standards.

In the cloud computing world, open source software enhances value whereas proprietary technology will diminish it.

I'd strongly suggest getting used to a world where value in ubiquitous activities is through services. Discrete I.T. activities are shifting from a product to a service based economy. There is little you can do to stop it. That's progress for you.

The old lie of "there is no value in free software" belongs to an increasingly bygone age. I'm sure that many a town crier lamented the invention of the printing press, many a gaslight engineer despised the development of the electric light bulb and many a newspaper baron has poured scorn on bloggers. These are little more than the delusions of those who wish to cling to the past, our modern day King Canutes. You can't stop commoditisation and the progress towards services, no more than media and newspaper barons have stopped the commoditisation of the means of mass communication.

The battle is already over, it's just a question of how long it takes for everyone to realise.


phil jones said...

Slightly off-topic but what do you think of ?

Sufficiently (at least by current standards) open?

swardley said...

I know James Duncan (one of the founders of, which has now been acquired by Joyent) very well.

I agree with the approach they are following.