Re: How Open Source software developers pay the bills, from within a successful such operation (was): Open Source: in conflict with the development process in the Ada community?

[dewar@gnat.com (Robert Dewar)]

"Kent Paul Dolan" <xanthian@well.com> wrote in message news:<fabfb33253b2dea9ae61e01e4a71de03.48257@mygate.mailgate.org>...

> Thanks extremely much for that economics lesson, Robert.  
> I was about to frame as a query a completely wrongheaded 
> guess at how open source folks get paid a living wage.

As I said earlier, the issue is not really open source per se but
rather the issue is whether companies can successfully use licenses
that convey considerable rights
to customers, including rights to free use, modification and
redistribution (collectively such licenses have been
referred to as Free Software licenses).

I have explained how this model works well for Ada Core Technologies
and its customers. I should mention one more
important aspect of this model (again remember I am wearing my ACT hat
:-)

The way our support works is that people purchase a copy of GNAT Pro
with support for a year. Then, at their option they can renew this
support, which includes getting all
the updated latest versions of GNAT Pro.

Will they renew their support? In practice almost all our
customers do renew. They certainly don't have to, they can
continue to use the version of the compiler they have (since the
license gives them this right, and there are certainly no time bombs
or anything else like that which
would prevent that). The answer is simple, they will renew
if they find

  a) that development of GNAT Pro is continuing and
     valuable new features are being added, so that it
     is worth getting the latest versions.

  b) that the support we provide is valuable

Now remember that ACT is a commercial company, we definitely want
customers to renew. That means we have
a very significant financial incentive to deliver on
both points a) and b) above. This keeps us running fast.
Unlike a proprietary software company that can use restrictive
licenses to keep its customer base captive,
we can't just stop development, degrade support, and sit
back and milk the customer base, since that would be financially
disadvantageous to us (and at the risk of
sounding like General Motors, we think that the continued
health of ACT is an important element in the continued
success and usage of Ada, which we definitely want to
encourage!)

Now of course I am not saying that all proprietary companies provide
poor support, or fail to keep up
a strong development program, but I like the fact that
in our model, our interests are aligned with those of
our customers both philosphically and commercially.

Now, an interesting question, could you use this model for
all software, or at least let's say other software?

Well I can't answer that, but I do remember my brother
saying when he was running DISC (Dewar Information Systems
Corporation) and had over a hundred people working for him,
that he found it annoying that he could only pay Microsoft
$300 for a C compiler. He said "I would far rather pay 10 or 20 times
that, and get a corresponding better product
with better support, since I am betting my company on the
integrity of this product". 

Hobbyists and students often evaluate software purely on
the basis of whether it does what they personally need. 
They would not appear to be customers for the kind of
full-service support that is part of this model. On the
other hand, not much of the software industry depends on
the money spent by students and hobbyists on software, and
it seems quite reasonable to let them get hold of the software they
need with no support and no fees (in practice
such communities tend to regard it as legitimate to trade
software regardless of licensing conditions). I like the
model of unsupported public versions for meeting this need
because I think it realistically addresses this segment.

But when it comes to industrial use, I don't think most
companies want to rely on downloaded software with no
support. 

Suppose I came up with a really good piece of presentation
software that competed effectively with Power Point? Could
I sell this with a non-restrictive license. I think the
answer is that it depends on the price. Power Point itself
is remarkably expensive, and Microsoft's total income from
this product exceeds the cost of producing it by some
enormous factor. I concede that if you think this kind of
discrepancy is reasonable, then it's hard to sustain without
restrictive licensing, but I think if you sold such a product for a
reasonable price, you could definitely succeed. I know that for my own
usage, I have no problem in
paying reasonable prices for software that I need to rely on. What's
the definition of reasonable? For me it is that the company is making
a reasonable profit but not an excessive one. I think software
producers should be able to make a good living, but I don't see that
they have to get super rich. Obviously if I get more extensive support
I expect to pay more so I need to select a product whose level of
support meets my needs.

Ada Core Technologies has a quite clear philosophy of providing very
extensive high level support. That's not
cheap, but that's the market segment we have chosen to
address, because typically Ada is used in large scale
critical systems where this level of support is needed.

Robert Dewar
Ada Core Technologies