An interesting article from Guido Sohne guido at sohne.net on the GKD mailing list. -FN

-----Original Message----- From: On Behalf Of Guido Sohne Sent: November 4, 2005 6:26 PM To: gkd@milhouse.edc.org Subject: [GKD] Some Differences Between Free and Proprietary Software

Dear GKD Members:

I wrote this with the intent of informing decision makers who are facing a decision of 'open source' versus 'proprietary software' to understand the choice they are making by explaining the context in an approachable manner.

-- G.

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Some Differences Between Free And Proprietary Software

* Introduction

This article is an attempt to dissect some differences between free and proprietary software in an accessible manner, free from jargon and the techno-gobbledegook dialect favored by some technical people.

* Two Different Worlds

Proprietary software is created by organizations that seek to maximize profit by restricting production. The usual and common objective of such organizations is to operate and maintain a continued revenue stream, for maximum profit. Restricted production and the continued revenue objective result in a dependency syndrome for users - they can't ever stop paying.

Proprietary software is mainly provided by companies that use the access-restrictions of copyright laws to maintain well-defined segments across their markets as well as to maintain barriers to market entry by competitors as a means of maximizing revenue across market segments by trying to minimize the costs of dealing with competitive threats, thus helping to maximize profits.

From a modern microeconomic perspective the business secret aspect of

intellectual property is only one part of a multi-faceted set ofprofit-maximization tactics firms can and do employ, in either freely competitive, oligopolized or monopolized markets.

Other related tactics include marketing and support expenditures that can make market entry more expensive or that can help lock-in consumers. Firms engaged in such behaviour, often are unwilling to share their technologies, especially those beyond the development capacity of most of the market, as an additional means of restricting competition by restricting the availability of the product.

Free software, on the other hand, has no profit motivations as its basis for organization. Instead, free software seeks to ensure that there are as few restrictions to software production as possible. Free software does not make a distinction between the level of access granted to the product given to its users and that given to its developers.

Free software maximizes the potential for production to occur. Unfettered by the profit motive and guided by higher ideals of freedom, sharing and communal ownership of knowledge, free software is more oriented towards the product and its development and far less attuned to anti-competitive business strategies, necessitated by its goal of minimizing restriction to the software product.

It is important to note here, that this sort of anti-competitive behaviour described is not limited to the software industry but rather permeates much of the status quo for business practices in industries that produce digital goods (software, music, film). The popular grassroots movement that is the basis of the increased usage and utility of free software is at the core, a rejection of this anti-competitive behaviour and this is evident in their clarion call for increased freedom.

* Licensing of Software

Software licenses are contracts attached to the software, either in raw or finished form, that determine the expectations, rights and obligations of the parties to the contract. As used by software producing organizations, licenses are primarily a means to either restrict, or ensure access to the product in both its raw and finished form.

Restricted production licenses usually differentiate between access to the product in its raw form and in its finished form. Such licenses often only grant access to users on the basis they are the only permitted user of the finished form of the software product that has been given access to the software. Other users must also buy licenses for continued revenue and maximum profit.

Free software licenses operate by removing the distinction between raw and finished form, emphasizing the raw form as the actual software product. If the software comes in finished form, the raw form of the software must be present or readily accessible. This is in line with the free software objective of ensuring that there are as few restrictions on production as possible.

Free software licenses often block restriction of the software product by restricting use of the software to exclude scenarios or situations that result in restrictions being placed on the software that would have adverse effects on production.

* Locked In Competition For Users

Software licenses are almost always centered around the user of the software. On one hand are organizations seeking maximum profit and on the other hand are organizations seeking maximum access (unrestricted access to the software product).

However, developers are those with the ability to utilize unrestricted access. In the free software world, the user can be a developer too. In the proprietary software world, other developers are often 'the enemy' because it is only other developers who can create a competing product.

And in between this war between worlds of developers, stands the hapless user ...

Significant resources are devoted to proprietary software in order for it to appeal and compete for the expenditure of users. Restricting users' access to the software by supplying it solely in finished form causes more effort to be placed into making the software usable by ordinary users (as opposed to developers).

In this manner, proprietary software evolves to be biased heavily to the ordinary user, often at the same time making it hard or impossible for other developers (who are also users of the software) to work with the software in its raw form. The proprietary software approach of restricting production to finished form also biases the productive options available to overwhelmingly favor the organization owning the software product.

In the case of companies like Microsoft, whose software comes preinstalled on the vast majority of computers being sold, the user often has no choice but to use the software. Any other route often results in more work for the user. They have to go and find some other software and get it installed. When they do so, they encounter incompatibilities, which incidentally, are in favor of Microsoft maintaining its monopoly by making it easier just to stay with Microsoft products, which of course, work well together.

The resulting state of affairs is in total contradiction to the free software goal of ensuring minimal restrictions on software production and software choice for the end user or individual developer. Free software accomplishes this by predominantly taking a 'laissez-faire' approach to ordinary users as well as to its developers.

The only restriction faced by developers when producing free software is in integrating their own improvements to the source code. This restriction arises from the free software goal of maximizing the efficiency of software production.

If there are no restrictions on changes to the raw form of the product, it quickly becomes buggy or unstable unless the developers are of equivalent skill or are familiar with the code involved, otherwise it devolves into a hodgepodge that just doesn't work. Only well thought out and well tested changes should ideally make it into the software product, and even this is best done in a gradual, incremental manner.

This necessary mechanism for restricting software production in a manner that maximizes efficiency takes the shape of the other developers of the software, who by fiat, consensus, war, politics or rewriting the affected code constitute a peer review mechanism operating around the goal of production efficiency within their common visions and objectives.

Developers have the choice to do what they please and often prefer to do what pleases them at the expense of the ordinary user, who is assumed not to understand the specific benefits of the particular improvement. On the other hand, users or organizations have the opportunity to encourage developers by giving them incentives to work on improvements preferred by the user.

This interplay between the two types of users (technical and non-technical) of free software evolves into a symbiotic relationship, where the developer has no reason to work if no one will use his work, and the users have no choice but to depend on a developer to do what they cannot do for them. Both benefit, each contributing to the resources needed for production.

* Differences in Organization of Labor

The mode in which labor (developers working to maintain or enhance the product) is organized differs between the proprietary and commercial approaches.

Organizations producing proprietary software, being mostly driven by the profit motive, and restricting production need to be able to control ownership of the software and at the same time utilize developers to make changes or improvements to the software while maximizing profit.

Organizations producing free software are often places where individuals interested in producing the software are employed because the organization and the individual have aligned interests for the software.

This is because the free software development process is organized on the basis of individuals. Organizations are represented only by an individual, and such individuals have influence proportionate to their contribution to the software product. Free software often operates as a self organized, developer centric culture resting on individual reputation and esteem in the eyes of the rest of the team.

Comparing the two methods of production, it could be concluded that proprietary software developers seek to maximize income while free software developers seek to maximize their contribution to, and influence over, the software product itself.

* Mode Of Production

In order to achieve this, these organizations hire developers and pay them for their contribution to the software product. Done as a work for hire, the ownership of the product, primarily exercised through copyright, remains with the organization that hired the developer.

The cost of developers and the general cost of doing business translates into a total cost for production that must be recouped by sales to users. The price at which the product is sold depends on how many users choose to use the software, or how many users are compelled or coerced to use the software.

With free software, the general cost of doing business is often incidental and not central to the objectives of people or organizations producing it. Maximum access to successful free software products often results in multiple organizations making changes or contributions to the software.

If one of the organizations participating in the free software development process disappears or changes its objectives and abandons the software, the other organizations are not affected. At the same time, the developers working on free software are often still available to different degrees of availability even when their organization collapses, because the raw form of the software product is not restricted to the organization only. They can continue working and may even join the organizations remaining.

Due to this, the free software development process results in software products that exhibit robustness even in the face of adverse economic circumstances. In such cases, the efficiency of development is even increased because the developers will have more time to work on changes to the products that they prefer, while being underemployed with respect to potential output. The ability to utilize underemployment effectively is a strong contributing factor to the efficiency of the free software development process.

Additionally, free software development reduces the perceived cost of developing software by distributing the cost of development across all the participants in the process. This is in contrast to the proprietary software development process, where the cost of development is distributed across the user base and results in lower prices for the user. These lower prices are partly due to the increased supply due to the absence of restricted production.

* Conclusion

Proprietary and free software are different approaches to producing software products that are competing for users and resources.

Proprietary software development restricts access to the software product by prohibiting copying but free software development encourages access to the software product by prohibiting restrictions on copying.

Proprietary software development is most efficient at maximizing profits but free software development is most efficient at maximizing production.

The choice is always up to you, the user of the software, in how to exercise your interests.

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