The True Price of Software

Free/Libre Open Source Software has been criticized for undermining the pricing of software.  This interesting piece published in ONLamp, exposes the true financial underbelly of the software market.  We find out, that software really wasn’t worth much to begin with. except from “Calculating the True Price of Software” by Robert Lefkowitz

… the major difference in worldview between open source advocates and proprietary software license advocates is explainable as a differing opinion on the correct value of the volatility of maintenance and upgrade pricing. People who believe that the pricing on maintenance is stable and unlikely to change see greater intrinsic value in the software. People who fear that the pricing is subject to large fluctuations see no intrinsic value in the up-front license; stripped of the options, the license value approaches $0. For the open source movement, perhaps a better way to position the change that OSS is making is this: we’re converting warrants on future maintenance and enhancements into options, which means that instead of having a sole supplier (warrants), we have created a third-party market (options) of these derivatives. How capitalistic is that?

The conclusion is that even without all the financial analysis, Free/Libre Open Source programmers have stumbled upon an inevitable truth; software by itself isn’t worth much and the proprietary vendors know it.  What has flourished in recent years is a free flowing market where vendors may compete to sell customers maintenance, support, and upgrades.