In Augustin’s view open source development became a necessity in the 1990s when the cost of marketing a program came to exceed the cost of creating it. “My favorite is Salesforce.com. In 1995 they spent under $10 million in R&D and over $100 million in sales and marketing. That doesn’t work.”
“Open source enables people to reach all those customers. It’s a distribution model. The people who create great software can now reach the rest of the world.”
Businesses get the most protection from the GPL, he insisted. “They get protection from competition.” The license’s insistence on reciprocity means no one can take the code you wrote, tweak it, then compete with you.
Two fairly old papers on the economics of open source. The news recently has been that open source allows companies to bring in better, more innovative talent and saves marketing costs, but these papers are interesting nonetheless. The Simple Economics of Open Source: The nexus of open source development appears to have shifted to Europe […] » about 300 words