| The Magic Cauldron | ||
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This is version 3.0
Copyright © 2000 Eric S. Raymond
Copyright
Permission is granted to copy, distribute and/or modify this document under the terms of the Open Publication License, version 2.0.
$Date: 2002/08/02 09:02:15 $
| Revision History | ||
|---|---|---|
| Revision | esr | |
| Observations on the price of ERPs and other very large products. The underprovision problem. Effects of asymmetric information. More on the sawmill case. | ||
| Revision 1.19 | 25 Aug 2000 | esr |
| Added link to Kipling’s “The Mary Gloster”. Observed that the service-cost-exhaustion model still works when we move from constant dollars to discounted present value. | ||
| Revision 1.18 | 25 Aug 2000 | esr |
| DocBook conversion. Minor updates for Summer 2000. | ||
| Revision 1.17 | 22 Oct 1999 | esr |
| This version went into the first printed edition. | ||
| Revision 1.16 | 8 Aug 1999 | esr |
| New section, ``Future-Proofing, Market Pressures, and Strategic Business Risk’’ | ||
| Revision 1.15 | 9 Jul 1999 | esr |
| New appendix on hardware drivers, and a better explanation of rivalrous goods due to Rich Morin. | ||
| Revision 1.14 | 25 Jun 1999 | esr |
| Added e-smith, inc. | ||
| Revision 1.13 | 25 Jun 1999 | esr |
| Corrected 13% claim about Netscape revenues; added better treatment of free-rider effects, corrected list of closed protocols. | ||
| Revision 1.10 | 24 Jun 1999 | esr |
| A better name for the `Razor Blades’ model. | ||
| Revision 1.9 | 24 Jun 1999 | esr |
| New material on `future-proofing’, the `Free the Future’ model, and a new section on exclusion payoffs. | ||
| Revision 1.7 | 24 Jun 1999 | esr |
| Minor update; clarify criterion (e) in payoff analysis. | ||
| Revision 1.5 | 24 Jun 1999 | esr |
| Minor update; point at definition of `hacker’. | ||
| Revision 1.3 | 23 Jun 1999 | esr |
| First public release. | ||
| Revision 1.2 | 18 Jun 1999 | esr |
| First private review version. | ||
| Revision 1.1 | 20 May 1999 | esr |
| Initial draft. |
Abstract
This essay analyzes the evolving economic substrate of the open-source phenomenon. I first explode some prevalent myths about the funding of program development and the price structure of software. I then present a game-theory analysis of the stability of open-source cooperation. I present nine models for sustainable funding of open-source development; two non-profit, seven for-profit. I then continue to develop a qualitative theory of when it is economically rational for software to be closed. I then examine some novel additional mechanisms the market is now inventing to fund for-profit open-source development, including the reinvention of the patronage system and task markets. I conclude with some tentative predictions of the future.
Table of Contents
The ``Information Wants to be Free’’ Myth
The Cisco Case: Risk-Spreading
Give Away the Recipe, Open a Restaurant
Free the Future, Sell the Present
Free the Software, Sell the Brand
Free the Software, Sell the Content
When to be Open, When to be Closed
Open Source as a Strategic Weapon
Cost-sharing as a competitive weapon
Open Source and Strategic Business Risk
The Business Ecology of Open Source
Open R&D and the Reinvention of Patronage
Conclusion: Life after the Revolution
Afterword: Why Closing a Driver Loses Its Vendor Money
In Welsh myth, the goddess Ceridwen owned a great cauldron that would magically produce nourishing food—when commanded by a spell known only to the goddess. In modern science, Buckminster Fuller gave us the concept of `ephemeralization’, technology becoming both more effective and less expensive as the physical resources invested in early designs are replaced by more and more information content. Arthur C. Clarke connected the two by observing that ``Any sufficiently advanced technology is indistinguishable from magic’’.
To many people, the successes of the open-source community seem like an implausible form of magic. High-quality software materializes ``for free’’, which is nice while it lasts but hardly seems sustainable in the real world of competition and scarce resources. What’s the catch? Is Ceridwen’s cauldron just a conjuring trick? And if not, how does ephemeralization work in this context—what spell is the goddess speaking?
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| Beyond Geeks Bearing Gifts |