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June, 2005

Life Lessons of Open Source

As I was reading this article about open source companies slashing prices to compete with each other, I made a quick note.

Product = Free, Support = $$$

While I've certainly thought about open source before, for some reason this simple equation popped into my head as revolutionary. This is a huge shift in the way we understand business, specifically in the software industry. It's basically the opposite of what we're used to. However, I really wrote it back because I wondered what could this mean outside just software? What lessons do we learn from open source? What products might we see free in the near future as a result of those lessons?

First off, it's important to note that this is a kind of subscription model (to put it in terms we already understand). You are paying for an ongoing service, just in the same way you would pay for your phone service, cable, etc. Only difference is, that in those examples, and most subscription examples, the product is what you're paying for, not the support. A notable exception to this is extended support plans. Like when you buy a new computer and you decide to pay an extra few hundred dollars for it to be under warranty for three years instead of one. In that case, we are paying for support, however, that support is going along with a product we paid for, and has a concrete cost, so the purchase is easier to justify.

Open source support on the other hand, is paying to keep something running that costs nothing. Using our current understanding as a consumer, it's hard to justify. Why pay for support on something that's free to begin with? How is it worth it?

What's interesting here, is that if there were some cost attached to the software, it would probably be easier to justify the support expense. In other words, the reason open source companies who exist on paid support will struggle is exactly the same reason they will succeed. We have trouble seeing value in something that costs nothing, despite the fact that it's obviously worth more than that. We as humans are not very good at separating cost and worth, at least not at the moment.

That's where things get exciting. Imagine if open source really takes off and people start to take the lessons they're learning offline. All of a sudden we have a real understanding of value regardless of cost. This makes us much more powerful consumers because we will be better at seeing the real value in products despite what price points companies have set for them. It's no secret that companies price certain products at premium levels just to make them seem more valuable than competitors, despite little to no difference in the products themselves.

For the first time, consumers will have a real opportunity to fight back. To understand the real value of things.

And that's good for all of us.

June 20, 2005
Noah Brier | Thanks for reading. | Don't fake the funk on a nasty dunk.