IPL as a burden

Manfred Schmid mschmid at intradat.com
Wed Jan 17 01:44:29 UTC 2001

> But the clarification that is likely to happen will not
> be to your liking.

If the whole construct is clear and consistent, we all know where we
stand. I would prefer that to the current situation.

> >We are not restricting competition. Opening the source will increase
> >competition for us and it is a good and solid principle at the basis of
> >capitalism :)
> When you have two competitors selling a product, and all
> sales to either company result in license fees going to
> one of those competitors, they are not on an even playing
> field.  The dramatic resulting effect may be seen from
> some of the OEM policies that Microsoft managed to get
> away with.
> >Any company may provide upgrades, bug-fixes, training, support or
> >wahtever they feel reasonable in the context of IPLed software. There is
> >no such restriction in IPL. If you find one, we will take it out.
> The original version required companies provided support
> and services to pay you non-zero license fees (while the
> end customers receieved free licenses).  Given that you
> choose your competitor's cost here, no sane competitor
> would go head to head against you in that market.

Talking about Microsoft, no one is able to provide upgrades and
bug-fixes, because the source is not available. Concerning training and
support, Microsoft is not the biggest player. They still have a strong
position since training and support require information, only the source
is able to provide as a "lender of last resort".

If the source was publically available, we probably would see some major
shifts in the market. But lets be realistic, no company will ever have a
monopoly in training and support.

When looking at the Economics of us competing with any company in the
above mentioned fields, do not forget that any balance sheet has two
sides. I have a lot of developers on my payroll and I am ready to pay
for outside contributions. 

Put yourself in the position of a normal company (not IBM, HP or
comparable), lets say 100 employees. Any company will sooner or later go
out of business if it cannot compensate the costs incurred by an
appropriate revenue stream. 

How much of your ressources could you assign to GPL-Development? The
guys in the R&D department could be encouraged to develop GPL Software
in their spare time. Maybe you can afford a guy or two working
exclusively for the community as a donation. But thats about it.

In consequence, neither intraDAT nor any other company of that size will
ever be able to professionally (and profitably) develop new GPL 
products. But a lot of software still has to be designed and developed
and its not always the big companies, that do the best job.  

I know, that in the current situation, there are other fashionable roads
to travel. 

- Live on training, consulting and support for GPL products and help the
community the best you can. As an outstanding individual you will always
find a sponsor who allows you to pay your bills and contribute. As a
company you do have to trust that the community will provide your
economic basis, outstanding products ahead of the competition. Your
abilities to contribute are neccessarily limited (and we see currently
some of these companies crashing).

- Risk it all in creating the nucleus of a new GPL product, trust that
"somehow" by "somebody" the software is developed further and try to
live on training and support.  As the lead developer, you might get a
premium in consulting training and support, but do not forget the
competition. Paying the developers out of the premium requires the
percentage mid-term to be small. 

Do not get me wrong: You will immediately find enough examples that
historically prove my statements wrong. Linux has been taken by an
enthusiastic community from a tiny nucleus to where it is now etc. etc.

But that is history and I doubt that the historic and existing
structures will scale to the extent needed to make Open Source the
mainstream. Today in the overall market, Open Source Software has a
small market share. 

You will probably be able to create a viable business model with
existing products like Apache, MySQL etc. But to make the market share
grow, new Open Source products do have to be developed, distributed and
improved. Innovation is normally done by small and new companies, not by
the big.

To make long things short: I do not think that any company has to be
insane to compete with us in training etc. The cards are open on the
table, the money received allows me to pay my developers. We do not
intend to restrict competition.

> Assuming that Manfred understands what I meant when I
> wrote that, and my description matches what others
> believe open source to be, the conclusion is that as
> soon as your license tries to find ways to guarantee
> that some type of revenue generated from that software
> goes to you, the result will not be labelled Open
> Source.  And it will not be so labelled for reasons
> that have nothing to do with people in the Open Source
> world not wanting to think about money.  It will not be
> labelled Open Source because it does not give the
> consumer the protections that make the label valuable to
> wise consumers.
> Cheers,
> Ben
> _________________________________________________________________
> Get your FREE download of MSN Explorer at http://explorer.msn.com

Ben, I think the discussion has really helped to clarify the positions. 

I already asked for a statement from the OSI Board concerning the
license fees. If it turns out to be negative, we probably will have to
rescind our request for approval from the OSI.

IPL is our answer to the simple question: Who pays the developers?

For us, opening the source is not a marketing thing. Starting with
VShop3, everybody can see the mistakes we made, there is nothing you can
hide from partners and customers and competition alike. In return we
expect ideas, improvements and the like.

Since we will be claiming license fees from the customers, we will give
money back to the community in a clear and transparent way. We think
that this is a good idea for all parties involved



intraDAT AG                             
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