Linked by Thom Holwerda on Fri 14th Sep 2012 22:30 UTC
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Member since:
2007-02-17
There is more than one way to make money. If one sells a product or service, there are two main ways of making more money: (1) increase the price of the product or service whilst trying to maintain the volume of sales, or (2) reduce the costs of production of the product or service.
Freedom software is quality software made by its users. It is made by collaboration in a loose organisation which is effectively a consumer's co-operative.
http://en.wikipedia.org/wiki/Consumer_cooperative
"Consumer cooperatives are enterprises owned by consumers and managed democratically which aim at fulfilling the needs and aspirations of their members. They operate within the market system, independently of the state, as a form of mutual aid, oriented toward service rather than pecuniary profit."
"The major difference between consumers' cooperatives and other forms of business is that the purpose of a consumers' cooperative association is to provide quality goods and services at the lowest cost to the consumer/owners rather than to sell goods and services at the highest price above cost that the consumer is willing to pay."
So, in effect, freedom software (aka FOSS) makes money via method 2 above. It makes money by reducing production costs (in this case, the cost of software). This of course only works if the product being sold is itself not software. It only works to make more money for businesses where software is a cost of production, and not the product for sale.
Example:
http://www.linuxinsider.com/story/72867.html
'They Will Save a Fortune'
"Linux makes a fantastic embedded platform," consultant and Slashdot blogger Gerhard Mack opined. "I bet even with the gold membership they will still save a fortune compared to going with closed source competitors."
Indeed, "it's completely expected," agreed Chris Travers, a Slashdot blogger who works on the LedgerSMB project. "Embedded space is going more and more towards Linux."
You do seem very confused about the economics of open source. Hope this helps.
Edited 2012-09-17 10:30 UTC