Open Source Race to Zero May Destroy Software Industry

Just the other day ran an article discussing the fact that Red Hat is succeeding despite the recession. It seems that the global economic chaos is forcing an increasing number of companies to search for ways to reduce IT costs, which means that more and more companies are turning to open source solutions in order to get away from having to pay for proprietary software solutions. It is difficult, if not completely impossible, to argue the fact that open source software solutions can reduce costs when compared with proprietary software solutions, so I can completely understand why companies and governments who are cash starved would at least consider making a switch, and who can fault them for actually making the switch. The question I have is whether this is in the long term best interest of the computing/software industry. What is happening is that open source solutions are forcing down pricing and the race to zero is on. As zero is approached, however, less and less money will be available to be made, proprietary software giants will long since gone belly-up and leading open source companies, such as Red Hat, will not be able to compete. It is quite possible that the open source movement will ultimately result in a collapse of the industry, and that would not be a good thing.

I am sure that many open source advocates who are reading this are already irate, and perhaps even yelling that this Quinn guy doesn’t know what he is talking about. I am used to it by now; I get it all the time. It is, after all, much easier to simply believe that someone you disagree with is clueless rather than question your own beliefs. It is a mistake though to dismiss what I am saying here, or any of my other writings on computer software and open source. The fact that I am a patent attorney undoubtedly makes many in the open source movement immediately think I simply don’t understand technology, and my writings that state computer software is not math have only caused mathematicians and computer scientists to believe I am a quack. Unlike most patent attorneys, I do get it and that is probably why my writings can be so offensive to the true believers. I am not only a patent attorney, but I am an electrical engineer who specializes in computer technologies, including software and business method technologies. I write software code and whether you agree with me or not, telling me I simply don’t understand is not intellectually compelling. I do get it, and the reality is that open source software is taking us in a direction that should scare everyone.

Sun Microsystems is struggling, to say the least, and the reality is that they are always going to struggle because they are an open source company, which means that the only thing they can sell is service. Whenever you sell time, earning potential is limited. There are only so many hours in the day, and only so much you can charge by the hour. When you have a product that can be replicated, whether it be a device, a piece of proprietary software or whatever, you have the ability to leverage, which simply doesn’t exist when you are selling yourself by the hour. So there is a realistic ceiling on the revenue that can be earned by any open source company, and that ceiling is much lower than any proprietary software company.

It is also an undeniable truth that the way many, if not most, service companies compete is by price. When service companies try and get you to switch over they will promise to provide the same or better service for a lower price. This point was driven home by a recent article discussing a realization reached by Sun guru Scott McNealy, the man President Obama has charged with investigating the US government transition to open source. McNealy explained: “The problem with Sun is that we don’t have any switching costs.” As a result, Sun has very different margins than does IBM and Oracle, for example. McNealy went on to describe a conversation he had with a Chief Information Officer of a former, unnamed Wall Street Bank who was skeptical regarding the “no-switching cost” claims put forth by Sun. McNealy explained: “I asked him, ‘How much did you used to spend with us?’ And he said, ‘$150 million.’ Then I asked him how much he spent last year, and he said — all proud — ‘Nothing.’ So I went to the corner and threw up and came back and said, ‘See, no switching costs.'”

The trouble with freeware is that there is no margin on free, and while open source solutions are not free, the race to asymptotically approach free is on, hence why I say the race to zero is in full swing. This phenomenon is particularly pervasive with respect to cell phone service, where minutes keep going up, cost keeps going down and free calls to people within your network or group are commonplace. There are now extremely cheap Internet phone services, and Skype is free. Telecommunications is not the only industry engaged in the race to zero. Unfortunately, many in the patent legal community are engaging in the race to zero as well. For example, there are patent attorneys and patent agents who advertise online claiming to be able to draft and file a complete patent application for under $3,000. One of the most common ads running provides patent applications for $2,800, and I have seen some agents advertise prices as low as $1,400 for a relatively simple mechanical invention. The race to zero is in full swing with respect to patent services aimed at independent inventors and start-up companies. It is also being pushed by major companies who want large law firms to provide patent services for fees ranging from $3,500 to $7,000 per application. This is forcing many large patent law firms to simply not offer patent drafting and prosecution services any longer. There are major law firms that are seeking to outsource such work, hoping to still keep the client for litigation purposes and to negotiate business deals.

Does anyone really think that paying $1,400 for an allegedly complete patent application is a wise business decision? I can’t imagine that if you say that to yourself out loud it would sound like such a good idea. Likewise, Fortune 500 companies that are pushing prices down and wanting to pay only $3,500 for a patent application can’t really expect to get much, if any, worthwhile protection. Do they? I suppose they do, but the reality is that they don’t. The reality is that when you are drafting a patent application you can ALWAYS make it better by spending more time. I frequently tell clients who want everything possible to be put into a patent application that they will run out of money well before that ever happens. The way to proceed is to work within a reasonable budget to get the greatest protection possible. There is no need to waste money on Project A and have no funds left to commercialize, or to invest in Project B. Inventors are creative people and they rarely, if ever, invent only once, so you proceed in an appropriate business manner. But to think that you can force a patent attorney or agent to spend the same length of time working on a project whether you pay under $3,500, $7,000 or $10,000 is naïve. Everyone inherently knows this to be true, but somehow convinces themselves otherwise.

As companies continue to look for the low cost solution, quality is sacrificed. Now I full well realize that much of the open source software is better than proprietary software, and I know that it can be much cheaper to rely on open source solutions than to enter into a license agreement for proprietary software. But where is that going to lead us? Once mighty Sun Microsystems is hanging on for dear life, and is that who you want to be relying on to provide service for your customized open source solutions? What if Sun simply disappears? I remember years ago I joined a gym and purchased a yearly membership only to have the gym close less than 2 months later. A similar thing happened to my wife several years ago when she bought a membership to a fitness and well-being company who shall remain nameless. Eat better and get exercise counseling and support, what a deal! Of course, it was a deal only until the company filed for bankruptcy and left all its members high and dry. Luckily I put off joining myself otherwise we would have been out two memberships after less than 30 days. With once mighty companies falling left and right do you really want to bet the IT future of your company or organization on an industry whose business model is the race to zero?


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73 comments so far.

  • [Avatar for Jon Dune]
    Jon Dune
    December 22, 2013 06:14 pm

    I agree with Gene. Software industry is doomed.
    Reason: programmers dig own graves. Waste life write free stuff.
    Software companies killed by Internet giants now, not Microsoft
    Consequence: fall of USA , catching up of china, India
    Work of capitalism

  • [Avatar for kch]
    September 26, 2011 10:56 am

    Your economic analysis is complete fail. Sorry that this hits close to home and bothers you, but you need to realize that this is economically a plus for everyone, not the end of anything but maybe your overpaid job. I am a software developer, I have a day job, I do freelance, and I also write open source software. Anyone who doesn’t understand how to leverage open source work into commercial paying work, is either not worthy to be paid or doing something wrong. Sorry if it puts you or your clients out of business, but that’s the way capitalism works. From what you wrote it sounds like you like the concept until it starts working against you. Your protectionist views are not inspiring because the economic arguments that underpin them are fallacies. Who cares about whether Sun Microsystems survive, or if patent attorneys all go out of business? The way capitalism works: the most compelling product gets chosen, and the others die out. You’re on the wrong side of economic theory here, which is not surprising because it’s got your job in its sights…

  • [Avatar for Jon]
    June 14, 2011 06:31 pm

    Companies are trying to reduce costs, and the fact that Red Hat is doing well, doesn’t really surprise me. Whether they are trying to reduce patent drafting costs, or IT costs, it all is the same in the end. Open source has some real benefits in my mind, even beyond costs. It’s nice to see it being adopted.

  • [Avatar for Baby Gift Ideas]
    Baby Gift Ideas
    January 9, 2010 03:18 am

    I installed IE8 beta 2 and noticed my web pages would not load accurately. Objects were missing, fonts were to big and not adjustable with the font prefs. My antivirus became disabled. Could not uninstall (option not available). No spuninst.exe file. Would not let me reinstall IE7. After posting to many forums found that IE8 is not compatible with service pack 3. Had to reformat OS partition.

  • [Avatar for beyli.jecj]
    November 5, 2009 03:23 am

    One of the things that open source is doing is removing the horrible waste in the software industry. I have worked for many software companies and spent a lot of time re-writing the same software again and again for a different boss. None of this software is value-add or core-competency it is just utility code that is required. The cost of this silly exercise is the burden of the customers, to the detriment of the rest of the economy. Your position is that it is in our long-term best interest for the software industry to redundantly create the same stuff. I contend that the software industry needs to evolve to a model where their customers are paying for real value and not for wasted effort. The idea is that everyone has a right to run, modify, redistribute, or improve the software they use for any reason.

  • [Avatar for Who the Lonely Freeman]
    Who the Lonely Freeman
    October 5, 2009 10:24 pm

    Do you know the difference between Free Software and Open Source software? Free software (where free is “free as in freedom”) has nothing to do with price (or quality, for that matter, though its nature tends to make it high quality). The idea is that everyone has a right to run, modify, redistribute, or improve the software they use for any reason. This does not mean that Free Software is free as in “free of charge”. Commercial free software can exist, though purely “free as in freedom” commercial software does not have a large presence at the moment. Individuals can hire people/companies to modify existing software or create software for their particular needs. They would then be able to hire others to make further modifications or do it themselves.

    Open Source software doesn’t care about freedom. They don’t want to talk about ethics, etc., because that scares people away. They emphasize high quality (because everyone can contribute) and low price. However, it is not always entirely free.

    Free Software can work because it is concerned with ethics. Open Source cannot because it is concerned with price.

    Support Free Software. Use a 100% free distribution of GNU/Linux. Support the FSF.


  • [Avatar for Dale B. Halling]
    Dale B. Halling
    June 26, 2009 07:07 pm

    The “scarcity theory of property rights” is being advanced by a number of scholars at the Cato and Von Mises Institutes. Using this theory they suggest that there is no justification for intellectual property rights. The logical conclusion of their theory is intellectual labor is not deserving of pecuniary reward.

    Are they correct that scarcity is the basis of property rights? See

    Is the conception of ideas and inventions subject to scarcity? See

    Is the distribution of ideas and invention (technology diffusion) subject to scarcity? See

  • [Avatar for Gene Quinn]
    Gene Quinn
    April 14, 2009 12:14 pm


    Thanks for posting your thoughts. Can you expand a bit on your last paragraph, particularly: “If tomorrow one of these providers shuts down, we could be in for trouble.” I think I know what you are saying, but if you could elaborate that would be great.

    I would not disagree that open source reduces development costs, and it is impossible to argue that at least some open source software is better than proprietary solutions. I am not anti-open source. I do think it is a bit naive for those in the open source community not to seek patents that would protect themselves if sued by proprietary software companies.


  • [Avatar for breadcrumbs]
    April 14, 2009 07:11 am


    You might wish to think out your arguments before you post. Software and the legal industry is an incredibly bad analogy. While the statutes and cases are for the most part laid open, not everyone is allowed to practice law – and for good reason. The two industries do not share a bedrock concept, so the analogy is not tenable. Pursing your analogy would beg the question: Do you want every programmer licensed by the government as practicing lawyers are?

  • [Avatar for slaine]
    April 14, 2009 03:22 am

    Oh good, we can just agree that all you are saying is that we are embarked on a race to efficiency and companies that don’t figure out a way to value add will die. Isn’t this as it should be? By the way, I don’t think it is as bad as you make it out to be. Take the legal industry for example, this is arguably the ultimate in open source. Anyone can look up statutes, cases, etc but people still pay for legal advice _by the hour_ and law firms still make heaps of money. I fail to see why you think the software industry Is in any way more vulnerable than any of these other race to zero industries.

  • [Avatar for Agastee]
    April 14, 2009 02:01 am

    Interesting article. I am currently developing a video streaming web site and initially my architecture was based on proprietary software, solutions and libraries.

    But now I re thinking this strategy as the open source model has reduced my development costs by 60%.
    I am using an open source CMS, open source libraries for development, open source social and video platforms for functionality and delivery. MySQL for DB and some costs associated with storage on cloud and managed hosting.

    So overall, If I were to develop my future project I would recommend open source from a cost point of view. If tomorrow one of these providers shuts down, we could be in for trouble. I am not sure how to best mitigate that risk. suggestions are most welcome.


  • [Avatar for Gene Quinn]
    Gene Quinn
    April 13, 2009 04:48 pm


    I understand what you are saying. The “zero” part about the race is admittedly exaggerated, at least for the most part. I do see more and more folks writing software and giving it away for free and then asking for donations, so there is certainly downward pressure that is going to bring the free rider out in all of us.


  • [Avatar for James Dixon]
    James Dixon
    April 13, 2009 04:39 pm


    I do agree with most of your comments about patents.

  • [Avatar for James Dixon]
    James Dixon
    April 13, 2009 04:37 pm

    Hi Gene,

    I completely agree with you that there is a race to ‘lower prices’, I think this is a good thing. I just disagree that there is a ‘zero’ to get to. I think there is no zero, therefore I don’t believe there is a race to it. In fact many of our commercial competitors claim that open source is actually more expensive than the existing proprietary solutions once you have factored in the cost of services and risk management.

    I think the other point that is missing here: who are these open source developers that are messing with the economy? Outside of a few students cutting their teeth in the real world, almost all of them are either fully-paid committers or are the IT developers or software engineers who use the software. All that happens is that the software jobs move out of inefficient silo’ed ISPs into the mainstream IT market.

    One of the things that open source is doing is removing the horrible waste in the software industry. I have worked for many software companies and spent a lot of time re-writing the same software again and again for a different boss. None of this software is value-add or core-competency it is just utility code that is required. The cost of this silly exercise is the burden of the customers, to the detriment of the rest of the economy. Your position is that it is in our long-term best interest for the software industry to redundantly create the same stuff. I contend that the software industry needs to evolve to a model where their customers are paying for real value and not for wasted effort.

    I also contend that open source saves jobs at the macro-economic level, but I’ll leave that for another time.


  • [Avatar for Gene Quinn]
    Gene Quinn
    April 13, 2009 11:48 am


    It is difficult for me to understand how you could write that there is no race to zero going on, unless it is just to disagree with me. I looked over your blog, and it seems that you have been writing that the economic downturn is an opportunity for open source solutions because of the cost benefits compared with proprietary technologies. Therefore, it seems we agree. Odd that you would take a position here in the comments on my blog when your own writings suggest that we are in agreement.


  • [Avatar for Gene Quinn]
    Gene Quinn
    April 13, 2009 11:42 am

    Attorneys are Clueless-

    I am sure that is what you believe when those with patents go after those without patents. Is the anti-patent crowd so ignorant that they think that patents are about locking up technology? That is comical really. You see, very few patent infringement lawsuits are filed in the computer industry, and that is for a reason. Everyone has rights, and if I sue you then you are going to sue me. So the only time a lawsuit happens is to create leverage for a deal. Unless the party who is infringing doesn’t have any patents, then those with patents sue because they have no reason to fear a counter-attack.

    Believe it is all about my checkbook if you like. The truth is I don’t do any work for big tech companies, and if you read my writing you would know that. Big tech companies don’t like hiring those who constantly bitch about their motives, but you wouldn’t know that because you want to read one article and think you know everything about me.

    The truth is I work with individuals, start-ups and small businesses. They seek patents to get funding, and to insulate themselves from being sued. Patents are cheap litigation insurance, attract investors and let you build. If you do wind up infringing on someone, which as everyone here thinks is inevitable, then you have a right to trade. If you don’t have a right to trade and someone wants to ruin you then that is a you problem, not a them problem. Simply stated, those who operate in the software industry and do not apply for patents are naive, reckless and are opening themselves up to be taken down.


  • [Avatar for Gene Quinn]
    Gene Quinn
    April 13, 2009 11:34 am


    So you think what I wrote means I am like the Uni-bomber and despise technology and advances and want everyone driving a horse and buggy? Really? Twist, twist, twist to suit your point of view if you must.

    I realize that the “free” in open source is about “freedom,” but thanks for point out the obvious. It is interesting, however, that you ignore that the “freedom” comes at a cost. If you develop and I get to copy then I don’t need to spend the time and money developing, so I can charge less. If you want to ignore that this creates a race to zero go right ahead. It is interesting that the only folks who question the race to zero are those who are programmers in the open source community. No economists are challenging what I wrote, and neither are any who understand business. The freedom of open source is pushing the price the market will bear lower and lower. If you think that is a good thing then by all means go right ahead. There is little doubt that much open source software works better than proprietary software. For me, I just want software that works better, even if I have to pay for it. I just don’t see copying the work of others, tweaking it and then asking for a donation as being a long term industry business model.

    Whether you like it or not open source is forcing prices down and eventually a lot of talented programmers will have to do other things because you cannot compete with free, whether that means cheap or freedom to take.


  • [Avatar for Attorneys Are Clueless]
    Attorneys Are Clueless
    April 13, 2009 11:05 am

    Spoken like the attorney that you are…

    Folks, this guy only cares about billable hours. His checkbook. That is it. It’s these bottom feeders that have ruined choice in the market. They think since the tools are free, how can we make a buck if we can’t lock up the tools and lease them to the hoopleheads dumb enough to pay us for it.

    He thinks that the tools should be expensive, and in open source we are saying NO. They should be free, so that more buildings are built, not fewer. You make money with Open Source by servicing your CLIENT. Something no attorney wants to hear because if they did, their billable hours would drop.

    Ignore this guy, he is an insider with a monetary interest in keeping software locked up.

  • [Avatar for James Dixon]
    James Dixon
    April 13, 2009 10:31 am

    I’m sorry but anyone who know anything about open source software knows that it is about ‘free’ as is ‘freedom’, not as in ‘freebie’. Using open source software has costs and risks associated with it, I think everyone knows that by now.

    There is no race to zero because there is no zero to get to. Pretending that open source is zero cost and then claiming to either debunk it or assert that it is bad for the industry is pointless. You are arguing against a fictitious scenario. Total waste of time, sorry.

    I think the bigger question is, even if open source is bad for the software industry, is that bad for the economy as a whole? The invention of the internal combustion engine was bad for the horseshoe manufacturers, but good for everyone else (except the Amish). You want us all to be driving a sweet horse/buggy combo?


  • [Avatar for step back]
    step back
    April 12, 2009 05:12 am


    I’m reminded of the existential French painting, “This is not a pipe”, each time you debate with the IT guys about what “software” is or is not.

    For those that haven’t seen it, the painting shows a smoking pipe with a sign underneath saying “This is not a pipe”

    And of course, the statement is true because it is merely a painting that represents a smoking pipe but it is not the thing it represents. (And more so, on the internet, the digitized image of the painting is not the painting itself. Are we getting too existentially deep here?)

    One can easily imagine a piece of paper having typed on it, the text string:
    Type(“Hello world. This is not machine executable code.”);

    This statement would also be true because the ink on the paper is not appropriately structured as rapidly fetchable and machine executable code signals embedded inside of high speed machine storage.

    It is true however that OCR could be used to read the ink on the paper and produce as a result (after compilation of the high level source code) corresponding signals in high speed machine storage that are machine executable code. But in that case, the signals inside the machine are not the ink on the paper and vise versa.

    Whew. The mind boggles with all these deep existential thoughts.

    I guess we will be debating forever whether source code symbols on paper are math or just scratches of ink which our minds trick us into believing as being something else (une pipe).

  • [Avatar for slaine]
    April 11, 2009 10:24 pm

    No the sky is not falling and the race to zero is not the end end of the legal or software profession.

    One of the earlier posters had it dead right regarding his comment on Wachtell. Firms providing services are only able to charge what the market will bear. It wasn’t that long ago that insolvencies were at historically record lows and banking and finance and m&a partners were able to charge whatever the market could bear. Now it’s the insolvency and restructuring experts’ time in the sun and the premiere practitioners are reportedly charging up to US$1,100 per hour – more than the b&f/m&a lawyers. Oh noes the sky Is falling!

    What this is telling you is that the market is working properly. If there ever comes a time why nobody in the market is willing to spend more than $150 per patent, that’s simply the market telling you that patent prosecution is not worth more than $150 to them and/or there are too many patent attorneys. Just like there are way too many property/b&f/m&a lawyers right now.

    I can assure you that firms are still happy to pay fair prices to for VARs and in house programmers to develop applications or value added services and open source is actually good for these people.

    By the way switching costs of software is arguably no higher than switching a legal services provider but people still look to Wachtell, Cravath and the like rather than Joe Smith, Esq from down the road. Why is that?

  • [Avatar for David]
    April 10, 2009 10:06 pm

    Another point is that these companies, like Microsoft, are out sourcing a number of jobs to places like India anyway. And they are the one trying to get work visa’s for cheap foreign labor even as they make large profits. So for the first world programmer, where is the loss. You can use a lot of these open source tools and create your own customized application and provide support with no need to be chained to one of these companies.

  • [Avatar for Jeff Price]
    Jeff Price
    April 10, 2009 05:56 pm

    I beleive open source is the better way, I believe these industries are nothing more then shams, Mabey people should invest their time more in the area of food, instead of creating products to create tools for the use of tools, Computers are supposed to just be a tool. These so called tech companies have been charging people for stuff they can do them selves, prices are so high on these softwares that I cannot afford to purchase them. So what do I do. I create one myself to help get the job done. I give away the source code for people to reuse to get a job done. Computers are a simple thing to use. Large companies like to hide this and keep people dumb to the idea that they too can make software, They create new versions of software with the same features, just change the look and charge even more, for upgrades. I am an active developer in the open source community. People keep it simple, Corporations make it convoluted.

    People are making money off of these companies and don’t do a darn thing, those people should get a real job making a product everyone can use, such as food. If we had the work force working on these convoluted products that don’t do much of anything but confuse, we could solve world hunger.

  • [Avatar for David]
    April 9, 2009 02:07 am

    Hi Gene

    Kind of busy at the moment, changing jobs etc.

    A few links to consider

    There was also the study in the E.U. that concluded that due to the cost of getting patents, only the big players can really afford to get them, which means the small companies are at a disadvantage. It is difficult to write any large software project and not infringe a patent somewhere. With the US law of triple damages for willful infringement, and the difficulty of actually finding if you are actually infringing on a patent, even if you are aware of a patents existence, In addition to being a programmer, you also need to be a damn good patent attorney! But then even finding a patent that may vaguely cover your code is next to impossible anyway. So with the possibility of triple damages, I understand that it considered safer not to even look.
    Anyway I will check back when I get a bit of time


  • [Avatar for Jeremy Lichtman]
    Jeremy Lichtman
    April 8, 2009 12:27 pm

    Let’s throw a curveball here: the race to the bottom started with computing, because IT makes it easy to produce “stuff” that can be widely disseminated for free.

    It isn’t going to end with computing though.

    The process is already underway with manufacturing. One example: Even cheap overseas factories can’t make stuff for free. How much are you going to pay for things that you can “print” in your garage for free?

  • [Avatar for Gene Quinn]
    Gene Quinn
    April 7, 2009 11:19 am


    Unfortunately, I have not been able to recover any of the comments from the old PLI blog. I can access the posts I made, but not the comments. That is one reason I lobbied very hard to take over the blog. Whenever some simple technology was necessary I was told that I couldn’t have it, or it didn’t exist, or that it was to difficult, etc. Even when what I wanted was available for free through WordPress and other blog platforms. Oh well. That is one reason I fear where software will go. In my experience many computer folks tell you what you can have and what can be done based on what they know how to do, and in many instances they have little interest in learning to address needs. Everyone knows that mentality exists in the software and/or IT community, and as the price of software decreases it will become more exaggerated I’m afraid.

    One thing you said in your comments that was great was:

    “I am left with little doubt that the person was NOT truly interested in a dialogue and was merely counterpointing any views expressed that ran counter to the dogma of “patents are evil”.”

    It is odd how so many continue to pick apart what I write and then when confronted with a question they don’t like the answer to they disappear. Whenever I write on this topic the anti-patent crowd comes out in force. They particularly hate when I say that there is no evidence to suggest that patents harm innovation. They claim that when research is prevented by patents that harms innovation. Of course, they base this on incomplete and often incorrect understanding of the patent laws and what is allowed and what is prevented. That is not a patent problem, that is a lazy problem. If bad patents that contain claims and disclosure that are obviously inadequate are an impediment to research then nothing is lost because those who are so lazy to allow ignorance to stand in the way of further innovation would never have innovated anyway.


  • [Avatar for Gene Quinn]
    Gene Quinn
    April 7, 2009 11:10 am


    I would like to chat with you further and see if you are interested in turning this comment into a proper, primary blog post. If you are interested you can contact me through:

    I do understand that open source does not as a matter of fact equal $0. I do wonder though whether there is a race to zero going on, and what that is going to mean long term for the software industry. We have seen similar races to zero in many industries. In the banking industry there is always an ebb and flow between mega-banks that offer all kinds of services, low cost, free toasters, etc., then they get so big that they screw up and people move back to smaller banks for service. My question is whether that is something that can happen if and when open source software experiences the same problems that other industries have when the price pressure continues to be downward. Open source folks like to say that the switching costs are zero, or very low, but that is not the case really. Yes, the code is open, but working with code written by others is not that easy to do in many situations. I know that, and everyone who has ever written a line of code knows that.

    I tend to think that open source downward pressure will be very good for business and less good for consumers. As proprietary software gets squeezed there will be fewer and fewer off the shelf solutions for individuals because there just isn’t enough money in it. When that starts to happen there will be a conglomeration of power in a select few software providers who give software away in exchange for other things, such as eyeballs for advertisers. I believe this will further create an enormous monopoly in Google and give Google, and perhaps a few others, extraordinary influence. For those who don’t like Microsoft I can’t imagine why this would be appealing.

    I appreciate what you say, but I am still waiting for those who disagree to at least admit that software directs a process. That is an undeniable truth and it is alarming that so many hate what I write, but refuse to acknowledge that simple truth. I am also waiting for folks to at least acknowledge the potential for the creation of a monopoly that would make the power Microsoft has look like a school yard bully. It seems everyone wants to pick apart what I say, but ignore the clear position I am taking.

    Also, it is really getting old telling me that I am wrong because so many people who comment disagree. As if that is logically satisfying. Please. As if I am the only one who holds these opinions.


  • [Avatar for Anon]
    April 7, 2009 09:12 am


    I’m not attacking you, but I think you have a few fundamental misconceptions about a variety of topics, as many commenters have pointed out. This in no way belittles your other accomplishments, but I think it would be good for you to contemplate a few things.

    First off, you fundamentally misunderstand the GPL (the main license used by the FLOSS community). “Free Open Source” does NOT mean $0.00. It means “freedom.” If you haven’t, I suggest you read the GPL, and if necessary, the accompanying FAQ and other documentation provided by the FSF. You may also want to check out Eben Moglen, the author and law professor at Columbia (he’s probably a little insane, but he’s also probably the most brilliant member of CLS’s faculty). The GPL says that if you distribute software, you must also distribute the source code on demand and allow changes. If you make changes to GPL-protected software, you are not required to release your modification as long as you do not distribute the software. If you want to sell your software, you can! However, the value of your software is lower because you do not have the monopoly rent to exclude improvements.

    This does not mean a race to $0. It marks a change in business models (or rather, emphasis of business models already in existence). First off, private customization can still create a rent. Another business model is to assume compressed profitability time periods. When you release a novel piece of software, someone may improve on it and sell their own version. However, you will have the other firm’s development time to recoup your investment. So, innovation cycles speed up and ultimately consumers benefit by getting more advanced products faster. Yes, it is taxing on businesses to speed up production schedules, but that has been a story throughout economic history.

    You also have a fundamental misunderstanding of economics. Notwithstanding your mistaken conception of FLOSS, even if software prices were to keep going down because of the loss of rents, at some point the cycle would stop. No business is going to develop things at a loss. However, consumers will always pay for things that have value to them if that is the only way to procure those things. So, let’s take the essential software niche widgetry – if all software developers abandon making widgetry software, then consumers will be left without widgetry. But then some enterprising fellow realizes that people need a new version of widgetry software because the old version that everyone is using no longer works. So he uses the OSS libraries to quickly (2 weeks?) create NewWidgetry 1.0 and sells it for a modest price, and makes a good buck. The point is, as software prices go down, the investment in a long development time (high cost) may go down, but it will never reach zero as long as demand is not zero. But with FLOSS, development costs are lower because you don’t need to start from scratch. Anyone who has developed software from FLOSS rather than from a blank C++ page knows how much faster it is.

    Also, I think you have an internal inconsistency problem. You claim that as rates get pushed down due to competition, good people will cease to provide the service. Fine. Then you say that you aren’t worried about your own job because you provide a superior service and (sooner or later) people will pay for quality. What you’re touching upon but haven’t realized yourself is that this is market efficiency – people pay for things of value, they don’t pay for things that shouldn’t have much value because they are easy. Would you pay $500 for a mass produced shirt from China? No. If China has a rent on mass produced shirts, you may have to. However, you may be willing to pay a lot for a custom-made shirt made with precision and quality – personalized things that the mass producer cannot replicate. Has the production of shirts disappeared? No. And the quality shirt-maker is probably happier by not having to waste brainpower making base quality things – he can challenge himself to make the most of his skills. Ever hear of the term “code monkey.” With FLOSS, you reduce the number of code monkeys and increase the number of high-value developers, which is a collective benefit (no wasted brainpower).

    I think you also suffer from a problem of speaking in absolutes (too much time away from law school perhaps?). You cannot claim “there is absolutely no evidence to suggest that patents in general harm innovation.” Of course there is. I suggest you read Prof. Michael Heller’s works on the Tragedy of the Anit-Commons. While patents help innovation by encouraging people to make investments in research, if your research is hindered by others wielding their patents, innovation is harmed. Furthermore, in many industries corporations have interlocking patents and can bring each other’s research to a halt. They do this to stop the other from ultimately hitting the big payday first (e.g. in ANDA situations). This harms consumers in the end. The truth of the matter is that making all this property there is both benefit and harm. We as a society have changed our opinions on where the balance lies and how to achieve the most benefit by varying the level of propertization.

    I think the commenter (John) who stated that you were trying to protect your (our) profession by talking up the value of intellectual property and your skills hit the nail on the head. Sometimes when we’re too heavily invested we fail to see alternatives. I think this is what has happened here. You assume that free/low-cost software will be the end of the software industry because there are no better alternative business models. You state that service companies operate as the “lowest bidder” to be successful. You also assume that billing hours is the only way to bill services.

    However, there are many other business models. Service is one. And service companies do not all operate on a “lowest bidder” fashion. Wachtell is a service company (law firm) and they charge what some might consider exorbitant rates – and the partners and associates there make well more than most software engineers. There are plenty of law firms who would work on contingency in place of Wachtell, but clients still pay the Wachtell premium. Also, you don’t have to bill by the hour – you can bill for successful services provided – something MUCH easier in the software community because results are quantifiable.

    Anyway, next time you make a post where you need to spend a whole paragraph preemptively defending yourself with certitudes, perhaps you should take that as a sign that you might want to re-think your own preconceptions and question yourself, as well as others. As attorneys, we’re taught to question – but no where does it say that we are limited to questioning others.

  • [Avatar for Gene Quinn]
    Gene Quinn
    April 7, 2009 12:56 am


    You say: “You say that OSS will destroy software industry, now do you know how silly that sounds? Honestly now.”

    Do you realize how silly you sound when you ignore reality? You can choose to ignore the main point of what I said if you like, but the fact that you choose to ignore what I wrote and the fact that you ignore basic economics doesn’t mean that what I wrote isn’t true. I would expect that someone who is allegedly on their way to a Doctorate of Business Administration would realize that when the price of services continues to decrease eventually the service will be free. When the service is free those who need to make a living providing the service will no longer be providing the service, and will have moved on to other things. That will leave us with only those who want to work for free, or those, like Google, who will give away software online so that we visit their website and click on ads which they sell. So if you are comfortable with either getting software from those who are not ambitious enough to work for a fee, or you are comfortable with getting software from a very small number of companies, good for you.

    You also say: “This software is paid for whether it be by purchasing technical support, paying a developer $100 plus per hr, etc.”

    Say goodbye to $100 per hour. As more and more companies get into the market you are going to have to lower your rates or lose business, it is that simple. So while you boast that you have written code for three multimillion dollar businesses, you had better get ready for the reality that your time is going to be worth less and less if you want to stay employed.

    You see, the trouble with open source is there is no leverage and there are only so many hours in the day to bill. So as your billing rate is lowered by increased competition you will make less and less money until the point where it just isn’t worth it to do the work.


  • [Avatar for S. Elvins]
    S. Elvins
    April 6, 2009 06:32 pm

    After reading your post I had to make a few statements. You say that OSS will destroy software industry, now do you know how silly that sounds? Honestly now. The same people who plan, design, implement, and maintain OSS are also the same persons who do earn a paycheck. How do you think they stay alive? They don’t do it by pulling money off of trees.

    I have just started writing a dissertation on OSS and it amazes me just how much software programmers don’t really know about this type of coding. There are multiple versions of source code. For example, there are FOSS (Free Open Source Software) versions, commercial versions of OSS for business owners that are paid which businesses receive full technical support for and there are other versions of OSS where the entire software code is fully customized to meet a client needs. In the last two options, the developers will have control over who is authorized to view the source code and make changes as they occur.

    This software is paid for whether it be by purchasing technical support, paying a developer $100 plus per hr, etc. Lastly, a lot of independent programmers feel threatened by OSS because they are not working, not earning enough, or are caught behind the eight-ball by not knowing this type of software. This can be changed by doing some training and speaking with those who are in the know. There is enough of this type programming that it will keep everyone busy.

    More and more businesses are turning to OSS instead of proprietary because of economical reasons. As someone who is a UNIX script writer, I wrote code for three multimillion dollar businesses who were quite successful. Depending upon what the client needs were, they either ran on Windows or MUMPS however the programming was always performed on UNIX as it was low cost and most efficient.

    Open source software will be sticking around for quite some time I feel as companies know what they want, what they need, and they will not pay over budget if it is not necessary. I worked in project management so that is an area I am very aware of.

    I decided to build my own business and bring my project management and information service experience to business owners. Eventually people here in the US will catch on.

    S.L. Elvins, MBA B.A., BSMIS
    Doctorate of Business Administration, IT (Jan 2012)

  • [Avatar for Gene Quinn]
    Gene Quinn
    April 6, 2009 12:00 pm


    I do respect your opinion, but I have to disagree. I do appreciate you taking the time to write your thoughts, and I better understand the mathematicians view, but that doesn’t change the fact that there is no way that software will ever be considered the equivalent of math for legal purposes. Software is a series of instructions. Do you disagree with that? Would you at least agree that you write software to direct a process? If that is the case then it is a process under the patent laws, and not the same as a mathematical expression. The law is clear. You can incorporate a mathematical expression into a patented invention. The only time you cannot obtain a patent when a mathematical equation or expression is involved is if by receiving the patent you take away that equation or expression from the public domain. That is simply not the case with software. Having said that, I do agree that many, if not most, software patents are so vague that they would cover numerous ways to carry out a certain functionality, and if that is the case then those patents claims are invalid under the written description requirement.

    Also, how do you know that you can prove any software the same as any theorem? You say that then immediately say that such a proof would require computational capabilities in excess of the known abilities of the universe. So the truth is you don’t know that you can prove software the same way as a any theorem. You have a hypothesis, or perhaps a theory, that you can prove software, but until such time as computing abilities increase significantly you have no law or proof.

    By the way, I am not offended in the least. I know I am correct in my opinions based on the law and how software operates to provide instructions to a computer. That is legally defined as a process. The trouble is not that I do not understand software, or math, the trouble is that mathematicians do not understand the law and believe that what they do understand is a substitute for legal knowledge. I am not at all offended when an argument is nothing more than “with so many mathematicians believing you are wrong, what is your problem?” That is not intellectually honest, and the fact that everyone wants to run off a cliff is hardly an argument for actually running off the cliff.

    It would be easier to accept what is being said by the math/software community if they would recognize that software is a process. Until that absolute truth is acknowledged there is no reason really be believe we can engage in a serious debate.


  • [Avatar for Nicolas Jungers]
    Nicolas Jungers
    April 6, 2009 04:28 am

    Mister Quinn,

    you wrote:
    “With respect to software being mathematical, I know this is going to stir up controversey, but software is not math. Software uses mathematical logic, but that does not make it math. Take a look at:

    I then went to read your quite provocative essay, trying to understand how you could assert that. I’m sorry to say that in my regard, which seems to be heavily substantiated by most mathematician I know, you fail to grasp the nature of mathematics. Indeed, software uses logic the same way as mathematics do, but further than that any software is just a long suite of mathematical expressions that transforms input into output. And a software is doing that in every respect in the very same way that you prove or express any mathematical expression (formula or theorem). It is so fundamentally equivalent that you can prove any software the same way than you can prove any theorem. Admittedly, it can involves huge resources which may be over the computational capabilities of the universe.

    I understand that I just offended you by affirming that you don’t understand what you just said you mastered but I’m baffled by your rejection of the results (software is math) by the experts of the field (mathematicians). Do you really think that mathematical results are opinions and that clever dialectic can change that? If not, how can you disbelieve some mathematical results that have the same truthfulness than those you accept?

  • [Avatar for breadcrumbs]
    April 5, 2009 08:39 am


    Have you had any luck reclaiming some of the posts from timeframe of November and December 2008 when IPWatchdog split off from PLI? Discussions on those posts, which numbered in the hundreds of replies may be pertinent to this thread.

    One such discussion dealt with a software pundit’s notions of various forms of IP protection. We explored the philosophical holdings that this person had that patents were unethical because they deprived the community of “math”. This person, at some great length also held that as math, software morphed so that a math truth remained a math truth no matter the form. We explored the ramification of this, especially in the penchant fo software people to say copyright is ok (even though copyright also deprives the community and for longer periods of time), while patenting is evil.

    I am sad to add that after I provided a grade to this person who responded to my challenge, the thread was lost. I searched for the person and found the moniker on a groklaw thread. There, back in his home court, the poster threw away the veneer of civiilty and misrepresented our discussion. I am left with little doubt that the person was NOT truly interested in a dialogue and was merely counterpointing any views expressed that ran counter to the dogma of “patents are evil”.

    I await (and applaud) your continued posts in the effort of having people come to the table without insiduous hidden agendas (but I will not hold my breadth).

  • [Avatar for Gene Quinn]
    Gene Quinn
    April 4, 2009 09:51 pm


    I would like to follow this chain of thought regarding software patents denying interoperability. The more thoughts folks have on that the better. I may not ultimately agree with you all, but that is a line that deserves some back and forth.

    With respect to software being mathematical, I know this is going to stir up controversey, but software is not math. Software uses mathematical logic, but that does not make it math. Take a look at:

    As I said earlier, I am interested in positions that can be justified within a legal framework. The truth, whether anyone likes it or not, is that the law is never going to say that software is math, is the same as math or is a purely mathematical expression. That is a non-starter legally speaking (and I personally think logically speaking as well). Here is the reason… software is copyrightable, math is not. So if you were to say software is math then that would undermine well established First Amendment case law and copyright law. Another reason is that software is really a set of instructions to direct the working of a machine. Processes have been patentable since 1790 in the US, and a process that directs a machine is exactly the type of invention that can and should be patentable. Even the Federal Circuit in Bilski recognized that.

    The law would call 1+1=2 math. The law would call E=mc^2 math. A series of instructions written using mathematical logic to direct a machine is not something the law is ever going to call math.


  • [Avatar for David]
    April 4, 2009 09:37 pm

    Another thought.
    Should software, Which is purely a mathematical expression be patentable?
    Or should it be just left under copyright laws?
    The problem with software boils down to the requirements of interoperability. Software patents are now being used to create monopolies by denying interoperability.
    Imagine if each car manufacturer had there own patented roads with no chance to get to somewhere on another manufactures network. You can only go to see people with the same make of car! Absurd thought isn’t it.
    Also there are the submarine patents, Patents left undisclosed until they become a standard or pseudo standard and then unleashed when it has become to expensive to work around.
    In the case of Rambus, deliberately hidden and lied about during the standard setting procedure. They more or less got away with it under Bush. Tightening up on that with a use it or loose it clause or similar would be good.

  • [Avatar for Gene Quinn]
    Gene Quinn
    April 4, 2009 11:53 am


    You said: “I know, it’s not all good for IP lawyers, but the same applies to you: adapt or die.”

    The sad thing is that this is not correct. Those who are sophisticated in the patent/innovation industry know that you cannot get the same quality in the legal world when there is a race to the bottom. The folks who get caught are individuals who do not know any better, and that is unacceptable to me. The government should protect the least among us, and the fact that the Patent Office allows people to sell inferior services and pose as attorneys when they are not attorneys is unthinkable to me. There will always be capitalistic inventors and companies who understand that they need quality, and quality means higher cost. So I will do just fine, but in the meantime a lot of people who don’t know any better are going to get screwed and have hopes, dreams and life savings taken and get little or nothing in return.


  • [Avatar for Gene Quinn]
    Gene Quinn
    April 4, 2009 11:49 am

    Hello everyone. I appreciate all the thoughtful comments here. I am reading them and will go over them with more care next week as I try and continue writing on this topic. So please keep the comments coming. I can do without the rude comments that are full of 4 letter words, belittle me personally and belittle my website. Those are just not going to get posted and are deleted. If you have a different opinion and take the time to comment in a serious way (even if you are frustrated and get upset with me) your comments will be posted.

    Let me explain a couple things about where I am coming from.

    First, there is absolutely no evidence to suggest that patents in general harm innovation. The overwhelming evidence is to the contrary. When patents became more valuable that is when filing went up and technologies and industries of all sorts exploded. This was in about the early 1980s. I am going to be writing more about that in weeks to come, so stay tuned. But innovation and basic research costs money, and without the expectation of profits down the road that necessary capital is not forthcoming. Sure, there are a lot of bad patents, and I write about them all the time and how the Patent Office is not doing their job. But the reality is that if there is a change to be had or suggestions offered no one is going to listen if “kill all patents” is the position taken. That is politically infeasible, and based on economic and scientific evidence that is exactly the wrong thing to do to spur innovation.

    Second, the proliferation of bad patents certainly does harm innovation. They key in my opinion is crafting rules that would address the problem specifically rather than throw the good out with the bad in order to get rid of the bad. This is what the Patent Office has done over the last 5 years, and it is a mess. Lawmakers typically sacrifice the good to get rid of the bad. Like President Obama said when he was Candidate Obama, I want to cut like a surgeon rather than a butcher.

    Third, I wonder whether there is something unique about software that makes it different from other technologies. Would less software patent protection be required to enhance the desired innovation? The typical patent rationale is that you need patents to spur innovation because without rights nothing happens (see above). But in many, if not most industries, the advancement of technology is extremely costly. That is not the case, at least always, in software. So what does that mean with respect to patent protection? Should software get its own kind of IP protection rather than trying to fit it into either a patent or copyright box? Should it get protection under patent law, but only for a couple years? Should derivative works be allowed if the derivative work is truly transformative (as in the case of fair use in copyright law)?

    These are the questions I want to dive into, and I need help thinking it all through from folks like those who are commenting here. I don’t want to cut off debate, but please understand that if your position is that the patent system needs to go away that is not going to happen and no one who could affect the desired change that could help will even listen.

    Thanks to everyone for reading. I hope the comments continue.


  • [Avatar for Elwin]
    April 4, 2009 07:30 am

    Keep in mind why Sun is now a struggling open source company: their workstation and server businesses were eaten alive by Microsoft and friends.

    If the mainstream software industry were healthier (i.e. more driven by quality and customer needs) it would be better able to survive such a race to zero. But if it does die, that just means it isn’t necessary anymore.

  • [Avatar for Hans Bezemer]
    Hans Bezemer
    April 4, 2009 07:22 am

    There are some dangerous flaws in your way of reasoning. First, services do scale well. If you have a piece of SW on your computer, you pay a price for it. If you want service for a computer you pay a price for it. Add another computer, add a license. Add another computer, add another service contract. Note that this service fee is a kind of insurance. You can add other services as well, e.g. consultancy, education, custom development (yes, why not. Even when it’s open source, a fee has to be paid).

    In 1990 Oracle Netherlands got only 25% percent of its revenue from licensing. The rest was services. I remember I joked at the time that “If you do even better on that you can give your software for free”. Yes, I agree, the IT landscape will change. But the question is: is that a bad thing? Licensing doesn’t scale well where employment is concerned. Services DO. Note that the computing industry may change very much as well, e.g. cload computing IS a service. It’s called SaaS for a reason. Yes, some may survive or even thrive in this brave new world, where other go belly-up. That’s capitalism, mate. Adapt or die. Or do you want to preserve the current state of IT artificially?

    Yes, FOSS has good quality SW, look at my recent post “Introducing pointy-haired bosses to FOSS”. So that is not a question. It has long been proved that openness is good for innovation. Look at the scientific world. Patents in the SW world are nothing more than the corporate equivalents of nuclear missiles. They do NOT boost innovation.

    I know, it’s not all good for IP lawyers, but the same applies to you: adapt or die.

  • [Avatar for David]
    April 4, 2009 02:36 am


    So Sun are in difficulty, going the same way as Digital and Wang, Netscape and Lotus notes.
    There is absolutely nothing new here, It has always been this way, and open source had nothing to do with it then. Imagine a world with out BSD and Linux, There would probably be no Yahoo or Google. You know that Microsoft licensing would have screwed there business plans, just to name a few examples. Netscape and Lotus notes couldn’t be competitive on the Windows platform (The only game in town at the time) because of undisclosed API’s that Microsoft were using, and the slow buggy ones that the competitors had to use. (Ref Comes Vs Microsoft) Open source creates a level playing field. There are no hidden secrets. Microsoft was able to use it’s operating system to squeeze out it’s competitors and push into new markets. Despite the high price of the software, they put out Vista, a bloated, and indisputably buggy beta release. The sort of thing you get with old tired firms that can’t be bothered to redesign, just patch up the existing product, and because they have the monopoly, they can get away with it. The remaining hold they have is the app’s that they have running on top of the platform, but that is slowly being whittled away.
    Despite talk of interoperability, They pull out FAT patents and use those to protect there monopoly (Rubbish patents, which prove how bad the US patent system is, already been tossed out once, only to be reinstated on appeal when Microsoft was the only one able to make submissions behind closed doors!) To much prior art, on a slight redesign of FAT 16, state of the ark technology, and only used because it is supported on all platforms. With larger and larger flash memory devices, it is nigh time to ditch it anyway, and a royalty free standard such as EXT4 should be considered in my opinion. IE8 The most standards compliant browser from Microsoft. It score 20% on the acid3 test, yeah better than IE6 and 7, but still just picking the standards that Microsoft want to support. They stifled wen innovation for years. Preventing any competition they could. The real cost of the proprietary word.

  • [Avatar for Open Source Services Provider]
    Open Source Services Provider
    April 4, 2009 02:34 am

    Unfortunately patents in the real world do not, as per the theory, encourage innovation. In fact quite the opposite. There have been numerous academic economic studies showing this to be the case. But for a more impactful summary of the reality it’s perhaps best to use the now (in)famous Bill Gates quote:

    “If people had understood how patents would be granted when most of today’s ideas were invented and had taken out patents, the industry would be at a complete standstill today. … The solution is patenting as much as we can. A future startup with no patents of its own will be forced to pay whatever price the giants choose to impose. That price might be high. Established companies have an interest in excluding future competitors. ”

    The solution to the complexity of patents, and in particular software patents in the US, is to do away with them. Competition may be uncomfortable, but it’s certainly preferable to the alternative both for society and consumers. The only societies which effectively abolish competition are totalitarian ones.

    Competition has led to enormous improvements in open source software. The under-marketed reality is that in many cases open source software is now superior in quality to (as well as far cheaper than) proprietary alternatives.

  • [Avatar for Karl]
    April 3, 2009 08:58 pm


    I’m going to draw a larger picture for you here.

    In your reply to Mark you say that you have an open mind about freely available software, but somehow questioning patents is off the table? This seems irrational to me, as the core issue is the same. This issue is scarcity (artificial scarcity in this case), and it is the great issue of our time. Not only is our debt-based money economy (which frames your notions of ‘value’) deeply corrupt, but it simply cannot survive the coming changes to society. For the last hundred years we have been automating agriculture, industry (and now services) to the point where our physical needs can be meet with little human labor. The huge population of the earth will force us into a zero-growth economic model (i.e. not capitalism).

    It boggles my mind how anyone can be against the abundance of resources for all mankind. I don’t care if its air, food, energy, software, or information. Why do you want to place an artificial monetary value on these things? I know, you are a product of our capitalistic society, but it’s time to stop playing silly games – it’s time for the human race to grow up.

  • [Avatar for zman58]
    April 3, 2009 07:45 pm

    So then shall we assume that the sky is falling?
    Not so fast with the fear mongering…
    Free software is already here. The race is over. The only distinction is between the big software users and the smaller ones. Does Microsoft pay for the software it uses? Think of all of the largest software users in the world (e.g. IBM, Microsoft, Sun, Google, Amazon). Do they pay for their software? No, they do not. This is very much a part of the reason they are so successful. So why can’t the little guys do the same? Service will always be there and the service model is where the entire software market is headed. Users should only have to pay once for the work done to produce quality software and that payment can be made in any form that floats that ship, including money, exchange for other services, donation of time, etc. ..even freely donated marketing such as in promotion of Linux and GPL free software to others.

    This is no different than other markets. We are experiencing a market driven by the need for ever greater cost efficiencies in the use of technology. This will create an explosion of new innovation which will require ever more ways to leverage and support it. Don’t worry, the money will keep flowing, but only to the players who can navigate the new business model. The current players can be a part of this if, and only if, they are creative enough to alter their business models to fit a changing market demand. Otherwise, they deserve what they get–failure.

    The software patent filter is on and will remain on because it has become quite obvious that software patents stunt innovation and heavily limit the free exchange of ideas. Get out of the 90s and move on.

  • [Avatar for Gene Quinn]
    Gene Quinn
    April 3, 2009 05:09 pm


    I am not sure what the solution is, or if there is a solution, or even if there is a problem here. I am troubled by the race to zero though. Who makes money in a race to zero? No one, except perhaps a few who can figure an alternative business model to monetize zero. Who could that be? What about Google?

    I use Google to search, I used gmail and other Google services for free. But there is something troubling aobut this because it seems to me that this race to zero will put many out of business, except for a few that monetize free and monopolize the industry.

    Isn’t it at least possible that the race to zero could create the same problem that open source is trying to prevent, perhaps even to a more troubling magnitude?

    I haven’t worked all this stuff out myself, which is why I am happy there is dialogue here. I will take any and all comments seriously, except those who obviously have the agenda of doing away with the patent system. That is not going to happen, and is a non-starter.


  • [Avatar for Mark]
    April 3, 2009 04:17 pm

    You are really barking up the wrong tree here. Let me give you a story from the coffee industry as an example of how a race to the bottom often ends. For decades in the US, coffee sales were dominated by big brands like Folgers, Maxwell House, etc. Throughout the 60s, 70s, and 80s, coffee consumption in the US was dropping, and soft drink consumption was rising. Coffee makers responded by lowering prices and lowering quality — a classic race to the bottom. No matter how much they dropped their prices, no matter how much they cut their decent Arabica beans with disgusting Robusta beans, sales kept dropping, provoking further price/quality decreases, and so on.

    What happened in the 90s? Of course companies like Starbucks, Peet’s, etc. arrived on the scene. Companies, starting off as small-scale local roasters, selling small quantities of high-quality fresh-roasted whole bean coffee. Soon they started opening espresso bars in their stores, and the rest is history. They had the revolutionary realization that people wanted good coffee and were willing to pay for it.

    The problem right now is not that there is a race to the bottom. The problem is that, given a choice between high-quality software that requires no initial capital outlay, and terribly low quality software that requires a massive capital outlay, the choice is a no-brainer. If OSS really turns out to be such a raw deal, purchasers will realize it eventually, and they will turn to better alternatives. Profit-minded entrepreneurs will be on hand, ready to meet the demand (just as they have been ready to meet the demand for services related to OSS).

    Am I worried about Sun, Microsoft, et al. going out of business? Not at all. If they can’t adapt to the marketplace, they belong on the scrapheap along with DEC and Wang. Other more able competitors will take their place. It’s the beauty of our American system. And contrary to popular belief, OSS doesn’t strictly substitute for commercial software, it enables new commercial software. Think about the number of commercial web apps that wouldn’t exist if it weren’t for Linux, Apache, PHP, Ruby on Rails, MySQL, and so on.

    Even if the problem you’ve identified is a real problem, what’s the solution? How do you discourage software purchasers from making their own decision based on their own cost/benefit analysis, and why would you even want to do that?

    P.S. Gene, I took your PLI patent bar review in Chicago this year and you were great.

  • [Avatar for B Dickson]
    B Dickson
    April 3, 2009 02:16 pm

    The main difference between doing Patent lawering, and software, is that the former is always one-off work, manual labor.

    You can trim some of the effort on legal paperwork by re-using boilerplate stuff from previous work, but in the end, there is not much fat to trim. You can only lower price by devaluing your own work, selling it at lower price.

    However, software is an entirely different beast. The more large and complex a software project is, the more it benefits from being broken into smaller work units and having that work distributed among a larger number of developers. Even more so, the INCREMENTAL effort is measured exactly in that manner – in increments.
    Small changes to a large program, in general, are small, regardless of the size and complexity of the original.

    This means that there is a continuum of size of project, effort to change the project, and number of people involved in that modification project, that can be supported.

    A better description of the model, and of the software itself, would not be “open”, or “free”, but rather, “contribution”-ware. Anyone can benefit, but the net result is only that of the collective contributions made.

    The vast majority of what is produced in the software “industry” is commodity-ware, which does not require customization. That is the case in both the consumer software, and the small-medium business market.

    When was the last time you had to pay a company to customize your word processor? Your email program? Once the big applications have the features that meet the needs of nearly everyone, the missing pieces can be added by a few competent individuals, and at modest cost.

    The needs of specialized industries can continue to be met by proprietary software outfits, but even those are likely to benefit by cooperating as well as competing.

    What open source does, more than anything, is reduce waste – the inherent waste of re-inventing the wheel, which is necessary every time a closed-source competitor makes software that does the job that another closed-source software maker built previously.

    If the software industry dies, it does so to the benefit of every software professional. Everyone who needs software, will go back to employing software types – the model that worked will in the ’70’s and ’80’s, and which failed only when the promise of commercial software changed the environment.

    The pendulum is swinging back, and the smart folks will go with it.

    B Dickson

  • [Avatar for Gene Quinn]
    Gene Quinn
    April 3, 2009 12:31 pm

    Open Source Service Provider-

    We may never agree on “artificial monopolies” but I do understand what you mean. The goal is that eventually the public benefits from the technologies disclosed, and a temporary monopoly is given so that the government can encourage research, development and innovation without having to pay for it. We as consumers pay for it instead.

    I do agree with you completely that the laws are complex and often obscure. The patent laws are becoming more and more like the tax code. Law is far to complicated, and that is why you need an attorney. I would be all for simplifying as much as possible, both with respect to tax law, business law and patent law. I am sure there are many other areas of law that need simplification as well.

    I often tell my students that drunk on a bet you could not create a more screwy patent system than we have in the US. While this area will always be complex because if we are doing things properly we are describing things that heretofore have never been known, the process and procedures should be simplified.


  • [Avatar for Open Source Services Provider]
    Open Source Services Provider
    April 3, 2009 11:44 am

    I kind of accept your point about surgeons. If I were in a car crash I would want someone competent stitching me back together, although I think there could usefully be a far greater emphasis on preventive medicine (i.e. exercise, healthy diet) in our society rather than the expensive remedy of self-inflicted problems. However, the only conceivable reason why one would need an expensive lawyer is that complex, obscure laws are drafted by expensive lawyers such that only only expensive lawyers can be allowed to interpret and rule on them. It’s a scam from start to finish and always has been. With no disrespect, society would be a better place if you were to take up another profession than patent lawyering, which does nothing apart from enforce artificial monopolies at the expense of society and the consumer.

  • [Avatar for Anonymous]
    April 3, 2009 11:27 am

    Like open source software, patents are also a race to zero. The only difference is the time scale. Open source takes weeks for incremental improvements where patents take 20 years.

    As a consumer, which one do your prefer?

    But the choice is up to the programmers/inventors whether to use open source or patents to provide their inventions.

  • [Avatar for Gene Quinn]
    Gene Quinn
    April 3, 2009 10:58 am

    Open Source Service Provider-

    I agree with you at least in one respect. Why would anyone want to be a plutocrat, especially in the climate of today.

    You are also right that the legal community has been very insulated, and in some cases in an anti-competitive way. The rationale, however, is that law is extremely complicated and because it can really cause terrible personal problems to get things wrong the government wants only licensed professionals to engage in this, much like wanting only trained doctors to treat. Someone who doesn’t know what they are doing in law and medicine can cause a tremendous amount of problems.

    In my practice the biggest problems I see are from those who tried to do things themselves because they knew better and were smarter than any attorney. Such hubris invariably causes extraordinary mistakes, which many times cannot be corrected. So you are free to never use the services of an attorney, but the legal work you do for youself will always be substandard. This is exactly the problem I spoke of in the article, from a different slant. Would you look for the cheapest surgeon? Of course not. Price charged has at least some relation to quality, and everyone inherently knows that deep down inside. Folks good enough to charge $500 per hour would never work for $100 an hour, and if you pay $100 per hour you will never get the same quality.


  • [Avatar for Gene Quinn]
    Gene Quinn
    April 3, 2009 10:49 am


    What was Sun valued at 1 year ago? What was Sun valued at 3 years ago? What was Sun valued at 5 years ago? I am sure you can figure out that Sun is heading in the wrong direction in terms of value. At some valuation they could be attractive, particularly to a giant like IBM. But it was just announced that the original terms IBM was talking about have been substantially cut, so after doing due diligence IBM thought that Sun wasn’t worth as much as they previously thought.

    Also, don’t forget Sun has a great name and a lot of trademarks, so regardless of whether they are in free-fall whatever technology IBM can get, added with goodwill and the trademark portfolio could well make the deal worthwhile for IBM.

    Of course, there is the real chance that IBM is wrong and this deal will be a disaster. History is full of examples where giant companies bought once prominent companies and later learned there was a reason the previous giant was in decline and the deal never made any sense. So arguing that I am wrong because IBM wants to buy Sun ignores the reality that IBM could be wrong, and also ignores the fact that there are a lot of other reasons for IBM to acquire Sun aside from a working business model.


  • [Avatar for Gene Quinn]
    Gene Quinn
    April 3, 2009 10:44 am


    I appreciate your comments. I would not at all disagree that the race to zero can be good for consumers. Who doesn’t like paying less? Paying less will conserve resources, allow companies to hire more people, expand business or return more to shareholders, all of which would be good for the economy. The problem, as I see it though, is that eventually the race to zero leads to a lot of problems in terms of quality because as cost continues to drop fewer and fewer talented people will be able to stay in the market. As the race to zero accelerates, with everyone trying to provide services for less, quality suffers, service suffers, and no one wins in the long run. This is what I am trying to talk about here and now.

    I gave an example from my own industry regarding what is happening with respect to patents, but that is not unique. Companies continue to outsource work to the lowest bidder, and I am sure we have all had experiences trying to contact “customer support” for a company and getting someone on the phone that could hardly be understood because they obviously were not in the US and spoke only broken English, as best. This race to zero in customer service is not at all helpful for those who need help with whatever product or service they have purchased. The race to zero is not satisfying.

    In the computer world some are also finding that outsourcing to programmers in India actually leads to longer development times and software that isn’t as good as it could be. In my own professional-business life I was involved in a project that was outsourced to India and not only was the process unsatisfying, not only did it wind up costing far more than it would have if it were developed with competent programmers, but the development project completely failed and after 18 months no working system was produced.

    I am not sure the race to zero is the way to move forward, and I am not talking about the short term. I also suspect that you all are right, and that it is on and there is nothing anyone could do, but does that mean we shouldn’t talk about it and examine the long term implications and learn from all other industries that have engaged in the race to zero?

    The problem with free is that you cannot make money on free. You cannot make up free by selling in bulk.


  • [Avatar for Xeran Saner]
    Xeran Saner
    April 3, 2009 08:40 am

    It seems your double profession as an attorney and software developer has made you ineffective at getting either of them, as noticeable by “computer programs are not math” well, something that IS forgivable is the lack of understanding of economics and how markets work as neither of your two professions is supposed to be proficient at it.

    Sun Microsystems is struggling, to say the least, and the reality is that they are always going to struggle because they are an open source company, which means that the only thing they can sell is service.

    And that’s the ONLY thing! Who could survive with such bussiness model! Oh crap, I forgot about IBM that giant that is interested in buying this path-to-hell Sun company and has made it from a product provider to a service provider… It is interesting to see the whole world moving into a service-based model as we speak, this “cloud” thing is no product, you know. There are things like steam and well all those software companies that have been doing great with this service based model and FOSS, even you mentioned Red Hat is doing quite well in the game…

    I’ll argue, it is easy to point out Sun’s open sourceness as the source of its death but there are enough counter examples that make it hard to consider it a rule. I personally think Sun just wasn’t FOSS-friendly enough, I could give details as to how they didn’t really do this FOSS thing as well as they could. OOo development was a little too closed, they took ages to GPL Java, etc, etc, etc… Maybe with a better play at these things they would be better by now.

    The trouble with freeware is that there is no margin on free

    Ask those Opera dudes.

    “Realistically” you got to accept few companies out there are profiting too well from products, soft companies typically sell service. Microsoft, Adobe, apple, they get huge profits and etc, but the truth is that for each MS app, there are zillions of “information systems” that were coded as part of what truly is a service and the profit for these IT professionals comes really from maintenance…

    Once mighty Sun Microsystems is hanging on for dear life, and is that who you want to be relying on to provide service for your customized open source solutions? What if Sun simply disappears?

    Truth is that this statement seems to come from the huger “missing the point” department. That gal, the awesome Pamela Jones responded quite well:

    I will answer your question, Gene. If IBM, or whoever, buys them, they will provide service. If Sun falls in a volcano and totally disappears, you can hire any local FOSS service company or any FOSS-competent individual to handle your service. That is the advantage — one of many — to Free and Open Source software. You are never, ever stuck and you are never locked in. So you are never out of options.

  • [Avatar for Open Source Services Provider]
    Open Source Services Provider
    April 3, 2009 08:26 am

    What you describe in your diatribe against open source, and cheaper patent lawyers than yourself, is called competition. It’s what free markets are based on, and why genuinely free markets lead to greater economic efficiency. Lawyering (unlike toy manufacture) has been a notoriously closed shop for hundreds of years, as has software for decades. I shall certainly never buy the services of a patent lawyer, but why would I, as a consumer, quibble at other things becoming cheaper? It is entirely possible to make a decent living providing services based on open source software. You might not become a plutocrat, but given the experience of the last couple of years, why would you argue in favour of plutocrats? (aka monopolists / oligopolists).

  • [Avatar for Alex]
    April 3, 2009 07:40 am


    I must disagree with you. I do believe you know what you’re talking about, relative to the information you’ve had access to until this point. I just happen to disagree with your conclusion. What is happening in the computer industry is happening in the entire marketplace – commoditization of information and services. I don’t believe the software industry will collapse, but it will evolve into something quite different than what it is – it is already evolving. Commoditization not only makes things ubiquitous by bringing them to the masses, it also has the side effect of bringing downward pressure to pricing and redistribution of power and wealth. The end result was noted by other posters – more, smaller software development firms, which can adapt better to changing market conditions because of their smaller size.

    Simply put, the more people are involved in something, the faster change happens. Eventually the tipping point of rate of market change exceeds large companies’ abilities to adapt to that change. Excluding certain manufacturing industries, like automobiles, how many large companies have been in existence more than 50 years? 100? 200? The large corporations are an anomaly of the industrial revolution. Historically speaking, small business has been the foundation of any market, not big business. Chaos theory would tend to predict the eventual dissolution of every big company, as the forces that enabled the company to become big to start with can’t stay that way forever.

    Perhaps it would be more productive to see where changes are leading and position yourself to be on the leading edge of the change rather than swept along by it?

  • [Avatar for John Smith]
    John Smith
    April 3, 2009 05:29 am


    I repeated your own words back to you as a form of satire. You lambasted them more thoroughly than I could have. Well done. You could try reading what you write and thinking how it applies to you. On the other hand, keep going as you do now as I am sure I am not the only one who I finds it hilarious.

    I think you do know what you are talking about. You can see you customers losing money while their competitors – who consider the entire patent system parasitic – are growing during this recession. You are working hard to talk up the value of your skills and do a thorough job of ignoring the profitable alternatives to patents. I believe you can make a good living from patents for several more years despite the fact that people now place less value on them. In the long term, patents will be reformed to reduce their burden on the economy. Patents are long longer a safe long term career choice, so enjoy it while it lasts.

    If I am wrong, and you do get hit hard during the recession you could always ask the president for a handout – or is that what you are doing now?

  • [Avatar for Hugh Paterson]
    Hugh Paterson
    April 3, 2009 03:13 am

    I think the problem with your thesis is that the software industry consists of multiple elements

    1 Proprietary software vendors
    2 Software support outfits
    3 Hardware sellers who embed software
    4 Users who roll their own

    I have probably missed some, but number 4 is the biggest. There are a lot of companies who are in other industries, and have employees doing in-house development and support. Open source saves them money, and also enables them to support packages that they could not support if the code was proprietary and not available.

  • [Avatar for Mike Masnick]
    Mike Masnick
    April 3, 2009 01:44 am

    Hi Gene,

    Always interesting to see these types of discussions. I know you defended yourself as being both an attorney and an electrical engineer, but my concern is that where you are wrong is with your economics, not with the law or the programming side of things.

    The race to “zero” is actually a net benefit for the economy by making the economy more efficient. The end result will actually be more and better software — but the business models for those products will be different. The problem is that you are too narrowly defining your market as “software” with the idea that it needs to be the software that’s sold. But Google is a “software company” that doesn’t sell any software at all. Or services.

    As someone else noted, the vast majority of software is built “in-house” to do something else, and there will be increasing benefits to releasing some of that software for free, because that free software will increase the size of some other market. It’s the same thing that’s happening in the “race to free” in the music industry as well. We’re already starting to see massive new markets created because the music is free. Make the software free and more massive new markets are created, and then there’s incentive to create and release free software, to help fuel that other market.

    So, fear not for the race to free. It actually will help the economy and the “software” market.

  • [Avatar for Gene Quinn]
    Gene Quinn
    April 3, 2009 01:03 am


    If you are happy with bad patents that is fine, but those who take the time to know the law will not be detered by bad patents. Those who chose to be detered by bad patents make that choice and if they want to live by such ignorance then they can hardly complain about the patent system. The rules are the same for everyone. If you don’t want to play by the rules of the game arguing that there should be no game in the first place is not at all persuasive.

    I must also say that it is odd that you say I think people who disagree with me are clueless, and in the same comment say that I need to listen to others who apparently know more than me. Do you see the hypocrisy in that statement? I am not going to simply listen to what FSF or any other advocates say. I will come up with my own opinions based on facts and economic data and legal theory. Simply saying something over and over again doesn’t make it true, whether it is said by the FSF or anyone else.

    It is getting really old to hear no rational or intellectually honest arguments and simply be told that because so many disagree they must be right. That is not a persuasive argument now, nor has it ever been. It is also getting old hearing that I don’t know what I am talking about.


  • [Avatar for John Smith]
    John Smith
    April 3, 2009 12:28 am

    There is a reason why the price for filing a patent is falling – quality does not matter. If I buy a well drafted patent for $10,000 and demand money, the patent can still be invalidated or worked around. If a buy six shabby patents for $1,500 each, and demand for money for one of them, my victim is still diverted from his business and forced to spend money investigating the patent. Then, after torturing him with months of boring decryption of patent language, I tell him I have five more patents just like it. What is he going to do? Abandon his business so he can work on invalidating my claims or give me a pile of money and tell me to go bother his competitors?

    A reduction in price in the software industry is something I enjoy as a professional programmer – it signals the end of lock-in. I get to bid on more contracts, and I have to deal with better quality software (lock-in funded software has no incentive to improve). The race to zero in the patent industry is much more scary. Imagine having to deal with 99 $150 invalid patents with one $1500 patent thrown in to catch you out. I would much rather patents cost $10,000,000 to file and had a maintenance fee of $1,000,000 per month.

    If you think a $150 patent is silly, put a couple of patents through a travesty generator, and see how long it takes a non-patent professional to work out what is going on. Patent examiners are so overworked you could probably slip a few of these through if you file them often enough.

    Just remember – it is, after all, much easier to simply believe that some people you disagree with are clueless rather than question your own beliefs. It is a mistake though to dismiss what dozens of people make the effort to tell you here, or any of the Free Software Foundation’s writings on computer software and patents.

  • [Avatar for Gene Quinn]
    Gene Quinn
    April 2, 2009 06:37 pm


    Don’t get me started on Microsoft and Linux! LOL. For a very long time I have thought that the US government unintentionally put major hurdles in front of open source and Linux in particular when they ordered Microsoft to “play nice” and share code. There was real momentum for an alternative, which seemed to stall once Microsoft was ordered to play nice. It struck me that this was exactly what happened with Apple v. Microsoft. Once Apple didn’t let clones and PCs started to dominate those writing software logically chose to write for Microsoft because the market was bigger. When Linux was gaining steam and so many were fed up with Microsoft choices were being made to go with Linux and the market was growing. Then when Microsoft had to open up to whatever extent was required choices were made to stick with Microsoft rather than move into the brave new world of Linux, at least by many.

    Thoughts anyone?


  • [Avatar for Gene Quinn]
    Gene Quinn
    April 2, 2009 06:34 pm


    I am intrigued by your comments. I am out of town on a business trip and speaking at a symposium tomorrow in San Diego, CA. I will be back on Tuesday. I hope others will continue to post thoughts, ideas, worries or explain why you are not worried. I appreciate all the comments and hope they keep coming. I will work on more stuff sometime next week, and hope to reach out to some of you with ideas and thoughts myself.



  • [Avatar for bigpicture]
    April 2, 2009 06:30 pm

    The race to zero has been on for years with the hardware industry, and they have to put out real money (like build factories) to produce their products. So why should software be different?

    What happened was that hardware companies lost control of the software required to run their hardware and were then held to ransom. I bought my first PC in 1990 for $5,536.00 and the OS was somewhere around $70.00. It had an Intel 386 25MHZ 16 bit CPU, a 40MB hard drive and 4MB of RAM. (top of the line) The computer that I have now has a 3GHZ 64 bit CPU, 2 X 500 GB hard drives, and 4GB of RAM for under $1,000.00. But if I chose to install a proprietary OS it would be over $200.00.

    So where is the propriety software race to zero here???? Is it not just propriety software gouging a bigger share of the total system cost??? So this is just hardware companies gaining control over the software portion of their products again, so that the race to zero can really be on, because it never will with if they are held to ransom with propriety software.

  • [Avatar for Jon Smirl]
    Jon Smirl
    April 2, 2009 05:13 pm

    Microsoft caused the creation of Linux. In the early nineties Microsoft pretty much systematically killed every software company in the world. Who knows if this was intentional or not, but they did it. Back then you had two choices as a software software company, if you succeeded Microsoft cloned you and you died. Of course your product could have been bad and you failed that way. It was heads they win, tails you lose.

    Linux and open source arose out of this environment. They were the perfect solution to Microsoft killing everything. Linux and open source can’t be killed by an out of control monopoly because they are unkillable. Microsoft’s behavior evolved open source as a response.

  • [Avatar for Jim Leinweber]
    Jim Leinweber
    April 2, 2009 02:44 pm

    Keep in mind that about 95% of all software is written in-house. If half of the 5% of commercially sold stuff gets commoditized by open source, this reduces costs for all the consumers of software particularly including businesses, by wringing out the monopoly rents currently being charged by proprietary vendors with client lock-in. If the proprietary vendors actually are adding value, they’ll stay in business. Otherwise, a lot of stuff will move to co-op models; e.g. the University of Wisconsin – Madison runs its main portal on “U-portal” atop Tomcat, and it pays people to contribute to both of those projects. Just like IBM, Redhat, Oracle, Cisco and other pay people to write the Linux kernel. I can see a lot of Schumpeterian creative destruction coming our way, sure, but it also seems to me that this will leave 97% of the software industry intact, so I’m not panicing just yet.

  • [Avatar for nickieh]
    April 2, 2009 02:42 pm

    Businesses are seeing the expense of their IT infrastructure and looking at ways to reduce it; offshoring, contracting out services, and yes, open-source software products. For many functions (web, email, development tools) the available open-source products provide comparable if not better functionality than their proprietary counterparts. This allows businesses to devote more funds to their OWN business vs. vendor licensing and to break single-source-product lock-in.

    This will have an impact on those companies relying on proprietary software sales (Microsoft most prominently), but allow other businesses to reduce their operating expenses. The support structure will of necessity change, but will remain. An ISV I know has gone to Linux-based servers to provide basic file/print functionality, with an improvement to their profitability by (a) reducing their own costs and (b) allowing them to bid projects more competitively. Explain how this is a problem, unless you’re Steve Ballmer or Larry Ellison.

  • [Avatar for Gene Quinn]
    Gene Quinn
    April 2, 2009 01:36 pm


    I have to disagree with your comparison to website services. When you are talking about enterprise software and solutions that are at the core of how companies run businesses I think that is extremely different than building a website, which in many instances will remain largely static.

    One thing that seems to get lost in this debate is that just because software is open doesn’t mean that others can swoop right in and pick up where the previous service provider left off. Starting with the work of someone else and carrying forward is not easy. My fear is that as the race to zero accelerates more and more companies will lose the race and cease to exist. That will present opportunities for small companies, but at some point if there is no money in it there will be no services provided. As more and money is removed I can envision companies having to switch from one service provider to another, each time the next service provider has to figure out what was done before. When you get too many cooks involved debugging and addressing issues becomes increasingly difficult. I wonder whether the ultimate model here just chokes many businesses and makes more and more businesses reliant on computer people who tell you “reality” based on what they can do rather than based on what you want to do or need to do. I don’t believe that will ultimately enhance productivity, so I think the government should tread lightly here because if the US goes open source the momentum for everyone to do just that will be overwhelming.

    Any thoughts? I would love to try and talk these things through and get input from folks on all sides.


  • [Avatar for Gene Quinn]
    Gene Quinn
    April 2, 2009 01:31 pm


    Typically when I write I offer solutions because I do believe if you are going to criticize you should be a part of the solution versus just pointing out problems. That is what I do in virtually all instances, and if you read my writing hopefully you will agree I am not typically one to just condemn. This is a unique situation though, and I don’t have any particular solutions. Like some of the others who have commented above, I tend to think the race to zero is on and there is nothing that can be done to stop it.

    For a while I have wanted to try and get open source, software and patent people in the same room to talk about the issues, particularly with respect to software patents. I wonder if there is any interest in the open source and software community to have some roundtable discussions?


  • [Avatar for Dio Gratia]
    Dio Gratia
    April 2, 2009 12:53 pm

    What is happening is that open source solutions are forcing down pricing and the race to zero is on. As zero is approached, however, less and less money will be available to be made, proprietary software giants will long since gone belly-up and leading open source companies, such as Red Hat, will not be able to compete. It is quite possible that the open source movement will ultimately result in a collapse of the industry, and that would not be a good thing.

    Open source provides a way to reduce the number of times a lot of the bits and pieces of software systems are regenerated saving non-recurring engineering costs. On the one hand we have reusable, available code and on the other we have a need to double the software production rate every ten years or so. Trying to maintain a purely proprietary software model requires everyone on the planet be a software coder in a half century or so to keep up with the demand. Promoting open re-use puts that particular apocalypse off long enough to fix the underlying problem. We need better ways of producing software than large matrices of coders on glass typewriters dreaming they’re producing Shakespeare’s works.

    We seem to have this interesting standoff between embedded interests keeping the present processes in place and those trying to invent the future as in Charles Simonyi’s Intentional Software or other phase change endeavors. Lower production costs through automation and we have the potential for diminishing the ‘intellectual property’ value of generated code. Add a dash of idea-expression merger for domain specific language solutions not to mention missing originality and the value of software would go down regardless of open source. There might always be a need for those working at architecting solutions, probably more fun than worrying about matching braces or white space in compound operators, not to mention less error prone.

    We could be condemned to always approaching a clergy proficient in their arcane Latin verse for software, compared with the possible future where ‘everyone is a programmer’, literate, numerate and operating at an abstract. No matter what does actually happen in the software industry there are bound to be paradigm shifts, they’re long overdue. Some of those monks hand copying bibles displaced by the printing press grew grapes and made wine. It wasn’t all ‘Oh, lets have an Inquisition, Christianity is failing’. You never can tell, the future may be brighter than today.

  • [Avatar for STH]
    April 2, 2009 10:11 am

    I also work in the patents industry, and am also an active contributor to Open Source projects. Increased Open Source adoption and the “race to zero” isn’t going to kill the industry, but it will probably severely fragment it, at least from an industry/corporation standpoint. Look at what openness, standardization, and race-to-zero has done to the web design industry. Millions on businesses, organizations, and people all have customized websites, so obviously that need is being filled. But there are no large, monolithic web design firms. Instead, there are thousands of small companies that do web design, and I know from experience that turnover in this industry is rapid. Having your web design firm go under isn’t really that big of a deal, because at the worst, you just hand over the HTML to someone else, who can pick it up within a few hours or days and continue working on your site.

    I think much the same thing will happen with software. The companies will get smaller, and there will still be a lot more turnover. But there will always be companies around to fill the need. Having your software provider go under won’t be disastrous, because if it’s built on an Open Source platform that many people at another company are already familiar with, transferring the support over isn’t as difficult as it would be for a solution built on custom hardware layered bottom-to-top with proprietary software that the company’s never seen before.

  • [Avatar for br3n]
    April 2, 2009 10:00 am

    and that right there is the best answer to what you try to scare people source means i can advertise for someone to come in and help straighten out problems if we find we cant handle it ourselves since the code is open and allows us to modify it for us.

  • [Avatar for James F]
    James F
    April 2, 2009 09:44 am

    Interesting, but ultimately pointless.

    The race to zero is happening, it can’t be stopped, and companies will fall by the wayside.

    Pleas to stop the madness will go unheeded.

    This is the free market at work: efficient, cost-effective solutions invariably beat out inefficient, costly ones. You could no more ask the auto industry to cease fuel-efficiency improvements or the lighting industry to stop improving efficiency of bulbs.

    The way to differentiate is to offer commodity and premium products/services (see Doug Hall’s books for examples).

    MySQL and SugarCRM are wildly successful with tiered models. Your contention is “there is no margin on free” is incorrect. There is margin on free; and there is additional margin if you can offer value-added capabilities that people will pay for.

  • [Avatar for Neeraj]
    April 2, 2009 09:11 am

    Good read. your view point does matter. But what is the solution according to you?

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