Saturday, October 31, 2009

Open Source will never get out of stock

It is like running out of light or wind. Software can be copied as many times as needed. Why haven't Microsoft and Apple understood this yet?

Some random examples of Windows 7 beeing out of stock
http://crave.cnet.co.uk/software/0,39029471,49303067,00.htm
http://www.digi.no/827047/windows-7-utsolgt-i-sverige

How can software be sold out? The only commodity invlolved is the software to be copied. To produce a physical copy a USB drive or recordable CD or DVD must be used in the process. But basically software can be copied between computers over the network. The required production equipment is computers, electric power and a network. These resources are abundant in the enterprise and in the average european/american home.

It seems like it is mostly pirates and the Open Source movement that have understood this distribution model. Commercial vendors seems to try to ignore or deny it. That is too bad, because they could profit from the extremely low distribution costs.
  • Pirates exploits the low distribution costs to distribute goods illegally
  • Open Source have relied on this distribution model for a long time. This has resulted in a very broad open source software usage, and distribution costs is approximately zero.
While Open Source and pirated digitial goods has very different usage profiles, they share the common properties of extremely effective and almost non-existing distribution costs. Open Source is mainly used by software developers, and consumers download software and digital media content for free.

In the last couple of years a new distribution patterns has gained foothold, beyond the most simple forms: SaaS. SaaS leverages software that can be used as-is instantly. Since there is no significant download and installation, the costs/effort required from the end user is even lower than with Open Source. For example the latest release of Ubuntu aims to provide a OS as a service by leveraging Amazon EC2 compatible images.

Software vendors, and other digital content providers, should free themselves from physical medias. Soon physical medias will be of interest of the entusiast. The rest of us will prefer instant gratification over the physical media.

Last weekend I was in a record shop where they of course played some music. I was very surprised when I saw the PC with Spotify was used instead of a CD player. That says it all about the state of physical distribution of digital goods.

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