(2004-04-19) Bernstein Software Biz Model

Mark Bernstein on business models for the Software Industry. Someone recalled the early personal computer flea markets. "I was there," said Douglas Engelbart. "I saw Bill Gates, in a little flea market booth, selling software off his tailgate," Walt Scacchi recalled. "I saw Adam Osborne on his soapbox, telling us to give away the computers, to give away the software. How can we do that?, people asked him. We'll all make money selling them the manuals!" "Well," I said, "it turned out that it was Bill who got to buy the big house." That might have been the real start of open software, right then and there. Walt Scacchi's almost convinced me that the Open Source economy might work, even without the cost-shifting arbitrage that currently seems to supply so much of its fuel. And that's still, in a way, the core of the problem. "Indirect economies suck," said Diane Greco, and she is not wrong. Computing may have become a service industry, but the needs of a service industry are not the needs of research and innovation and progress. It's a puzzle and a problem.