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+<!--#include virtual="/server/header.html" -->
+<!-- Parent-Version: 1.77 -->
+<title>Only the Free World Can Stand Up to Microsoft
+- GNU Project - Free Software Foundation</title>
+<!--#include virtual="/philosophy/po/free-world.translist" -->
+<!--#include virtual="/server/banner.html" -->
+<h2>Only the Free World Can Stand Up to Microsoft</h2>
+
+<p>by <strong>Tom Hull</strong></p>
+
+<div class="announcement">
+<blockquote><p>This article is part of our section
+of <a href="/philosophy/third-party-ideas.html">Third Party
+Ideas</a>.</p></blockquote>
+</div>
+
+<ol>
+<li>The reproduction and distribution cost of software is zero at
+the margin. This means that in theory it is no more
+expensive to produce software which can be freely distributed and
+used by everybody than it is to produce software for a limited
+clientele.</li>
+<li>The pricing of software bears no relationship to the cost of its
+development. The two factors that do matter are market size (which
+is limited by price and utility) and competition. Given a market
+for a software product, the maximum margin can be obtained by
+precluding or eliminating competition.</li>
+<li>Software companies that are able to thwart competition attain
+pinnacles of power which are inconceivable in other industries.
+Partly this is due to the enormous cash flows that are possible in the
+absence of competition from products with nil reproduction costs, but
+largely it is due to the complexity of software itself, which allows
+dominant companies to design &ldquo;standards&rdquo; which exclude
+future competition.</li>
+<li>All niche markets for software rapidly evolve toward monopoly or
+an equilibrium where a small number of players tacitly agree not
+to mutually destroy their profits. (Established companies can
+defend their market share by reducing their prices to practically
+nothing, making price competition suicidal for newcomers.) However,
+there are cases of asymmetrical competition, where a large company
+with other sources of income can destroy a smaller company that
+depends on a single niche revenue stream.</li>
+<li>Microsoft has a secure revenue stream based on its dominant
+position in personal computer operating systems software, and uses the
+power inherent in that position to favor its other business activities
+with its ability to dictate &ldquo;standards&rdquo; and to undermine
+competition, especially where power (as opposed to mere money) is at
+stake.</li>
+<li>Capitalists invest in new software ventures with the hope of
+gaining a dominant position in a new niche market. There is
+essentially no new investment in existing niche markets, since it
+is impossible to compete with an established dominant player on
+the basis of lower costs and the possible gains of an uphill
+battle for a small share of a shrinking pie rarely justify the
+risks. In their wildest dreams these capitalists want nothing so
+much as to be just like Microsoft.</li>
+<li>The drive to restrain Microsoft under the rubric of antitrust law
+seems mostly to be the effort of companies who find their own power
+positions threatened by Microsoft's activities. They seek to make
+it harder for Microsoft to undermine their own businesses. However,
+they are fundamentally similar to Microsoft in that they don't
+question a world where technology companies working from private
+caches of intellectual property are able to control the use of that
+technology for their own best profit.</li>
+<li>In the market equation, demand is equal to, and in many ways the
+master of, production. Yet in the world we live in, production is
+highly organized and efficient and commands enormous financial
+resources and seductive powers of persuasion, while demand is
+fragmented, uninformed, and powerless. While consumers can still kill
+a product that they have no desire for, they are nearly powerless to
+direct or even influence the detailed designs of those products. For
+software products, consumers can only choose among a given set of
+alternatives, which are extremely complex, dauntingly impenetrable,
+and generally designed more for the company's anticompetitive purposes
+than for the user's tasks. (Even the old fashioned option of doing
+without is often impossible due to the intricate web of
+interdependencies as new hardware and software march in lock step into
+the future.)</li>
+<li>The real &ldquo;killer software&rdquo; is free software: software
+that is free of intellectual property claims; that is published in
+source code form, so can be inspected, evaluated, fixed and enhanced
+by anyone with a mind to do so; that is freely distributed and can be
+installed on machines and used without limit. Free software is the
+software that kills the closed, nefarious software product
+industry. It is software that users can select intelligently, to do
+today's tasks, and which they can collaboratively build on to handle
+future needs. Free software is the one thing that not even Microsoft
+can compete with.</li>
+<li>Still, there is one core problem: who pays for developing free
+software? The usual answer &mdash; which leads to all of the trouble
+above &mdash; is that investors pay for development, which they
+recover from their profits. The only real answer is that development
+costs must be paid for by users. The key point here is that what is
+paid for is not the distribution or use of the software, but its
+development, and that the development of free software implies that it
+can be used by anyone. I think there is a simple way to handle this:
+anyone who wants a piece of software developed or enhanced posts a
+&ldquo;request-for-proposal,&rdquo; including a sum that the requester
+is willing to contribute towards its development. Intermediary
+organizations can pool these requests, and interested parties can up
+the ante. Developers can then search through the current postings and
+bid on development work or work on spec. Developers can also post
+their own proposals, which users can then buy into.</li>
+<li>Free software can be developed less expensively than closed
+software products. Even for well paid professional developers,
+fully underwritten by conscientious users, the cost of free
+software would be significantly less than the premiums now being
+paid for empire building. The quality would be better, especially
+in terms of fitness for use. Free distribution would ensure
+maximum exposure and choice: a free market based purely on
+utility and quality. The service component of software would also
+open up: anyone who wanted to could start from the same code, to
+learn, support, and teach. The best service providers would
+succeed.</li>
+<li>Simple steps can get this movement underway: Form an initial
+organization to sort out the technical issues, suggest working
+arrangements, study the economics, hack out a legal framework, seed
+and coordinate the requests, and canvas for initial technology
+contributions (including the large body of currently available
+freeware), do some evangelical work. Urge large companies and
+organizations to budget a small fraction of their annual software
+outlays for proposals. Set up a review group for intellectual property
+issues, challenge dubious claims, and investigate the feasibility of
+buying and releasing rights to valid claims. Encourage the
+development of more local organizations &mdash; local to place, to
+industry, to niche, to taste &mdash; with the initial group breaking
+up or fading away: common methods and procedures, but no centralized
+control.</li>
+<li>Let's call this organization, this whole framework, &ldquo;The
+Free World.&rdquo; It stands for free and open knowledge, free and
+open development, software that works for you. Take a stand. Make a
+contribution. You have nothing to lose
+but <kbd>CTL-ALT-DEL</kbd>.</li>
+</ol>
+
+<hr />
+
+<p>Additional notes can be found
+at <a href="/philosophy/free-world-notes.html">
+http://www.gnu.org/philosophy/free-world-notes.html</a>.</p>
+
+</div><!-- for id="content", starts in the include above -->
+<!--#include virtual="/server/footer.html" -->
+<div id="footer">
+<div class="unprintable">
+
+<p>
+Please send questions and comments regarding this specific page to Tom
+Hull <a href="mailto:ftwalk@contex.com">&lt;ftwalk@contex.com&gt;</a>.
+</p>
+
+<p>Please send general FSF &amp; GNU inquiries to
+<a href="mailto:gnu@gnu.org">&lt;gnu@gnu.org&gt;</a>.
+There are also <a href="/contact/">other ways to contact</a>
+the FSF. Broken links and other corrections or suggestions can be sent
+to <a href="mailto:webmasters@gnu.org">&lt;webmasters@gnu.org&gt;</a>.</p>
+
+<p><!-- TRANSLATORS: Ignore the original text in this paragraph,
+ replace it with the translation of these two:
+
+ We work hard and do our best to provide accurate, good quality
+ translations. However, we are not exempt from imperfection.
+ Please send your comments and general suggestions in this regard
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+ &lt;web-translators@gnu.org&gt;</a>.</p>
+
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+ href="/server/standards/README.translations.html">Translations
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+Please see the <a
+href="/server/standards/README.translations.html">Translations
+README</a> for information on coordinating and submitting translations
+of this article.</p>
+</div>
+
+<!-- Regarding copyright, in general, standalone pages (as opposed to
+ files generated as part of manuals) on the GNU web server should
+ be under CC BY-ND 4.0. Please do NOT change or remove this
+ without talking with the webmasters or licensing team first.
+ Please make sure the copyright date is consistent with the
+ document. For web pages, it is ok to list just the latest year the
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+
+ If you wish to list earlier years, that is ok too.
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+
+ There is more detail about copyright years in the GNU Maintainers
+ Information document, www.gnu.org/prep/maintain. -->
+
+<p>Copyright &copy; 1997 Tom Hull</p>
+
+<p>You may link to this document and/or redistribute it
+electronically.</p>
+
+<!--#include virtual="/server/bottom-notes.html" -->
+
+<p class="unprintable">Updated:
+<!-- timestamp start -->
+$Date: 2019/08/03 14:52:39 $
+<!-- timestamp end -->
+</p>
+</div>
+</div>
+</body>
+</html>