Not sure that there's any paradox here. The rise of a freely-accessible network connecting all humans (i.e. the Internet) has just made it such that hundreds of years of cleverly and carefully assembled middle-middlemen that were required to keep the economy going are no longer required. This affects the software ecosystem that existed right before the Internet but impacts everything else as well: taxis, hotels, etc.<p>Moving forward, assume that middle-men are gone, unless required by legislation or differences in sovereignty (i.e. still effectively legislation). The net result is that it's cheap to build and procure yourself practically almost anything, with the surface of things you can't build/procure yourself increasingly diminishing given the network effect of large swaths of the human race rushing to the Internet to build ever increasingly sophisticated modular components with each trying to outflank each other with a lower price/barrier-to-entry.<p>If we can 3D print/carve materials we can buy in bulk in a cheap fashion from freely-available software/data, we are likely looking at a fundamentally different economy than the one we are in today.
The title is a half-truth: commercial software is certainly in the decline while also being a huge, profitable business. The SaaS and ad-driven vendors get most of the attention. They might even be most of the startups. Yet, there's a steady stream of companies building software that's worth paying for and making money on it. On top of that, there's always the "improve legacy systems" market where you makes something they can't get away from even better. Solutions building on Microsoft, Oracle, mainframe, AS/400, VMS, and so on all come to mind. They stay around, so your enhancement might stay around too.<p>The two ensure commercial software won't go away or even be marginal in terms of where the profit is. SaaS is a race-to-the-bottom due to intense competitiveness. Ad-driven model can be lucrative but is also high risk. Building a product with strong lock-in effects is the only method proven to last decades. From there, you can decide whether you want the risk of the ad model (Facebook) or the profit of commercial model (Microsoft, Oracle). One looks more appealing. ;)
It's really twisting things in order to fit a wierd corporate narrative on FOSS.<p>"Even companies like GE are helping to fund noncommercial software, having con-
tributed $105 million to Pivotal, the home of projects like Cloud Foundry." Uh... they invested for a 10% stake in a for profit company which creates commercially focused free software, among other things. The corporate doublespeak runs deep.<p>Reminds me generally of orielly's screwy agenda <a href="http://www.thebaffler.com/salvos/the-meme-hustler" rel="nofollow">http://www.thebaffler.com/salvos/the-meme-hustler</a>
The tl;dr: 'The economic value of software is declining even as the strategic value of software is rising.'<p>When I applied this framework to Docker, the magic sauce of Docker pops out in an obvious way. I had asserted in other threads that Docker's thing is packaging ... but reading this paper, I can see why Docker is moving so fast.<p>And go figure, it's written by Stephen O'Grady of RedMonk.
This is the original store page of the book: <a href="http://shop.oreilly.com/product/0636920033325.do" rel="nofollow">http://shop.oreilly.com/product/0636920033325.do</a><p>Looks like the linked PDF is with the "Compliments of PayPal", Google Cache[1] still has that version of the O'Reilly store page while now actually cost money again. So I guess someone was clever to save the download link while the promotion lasted? :)<p>[1]: <a href="http://webcache.googleusercontent.com/search?q=cache:tTFeN8yjqSYJ:www.oreilly.com/programming/free/software-paradox.csp%3Fcmp%3Dtw-prog-books-videos-product-na_software-paradox.csp+&cd=1&hl=en&ct=clnk&gl=tw" rel="nofollow">http://webcache.googleusercontent.com/search?q=cache:tTFeN8y...</a>
From the description on the O'Reilly page I get the impression that this book is perhaps 90% hindsight and 10% helpful advice for entrepreneurs in software. Is this a correct observation?
We launched in December 2012 our offline desktop software product for business and freelancers (niche market with a TAM of about 100,000 users) only as a subscription, no perpetual licenses available. Previously this project was freeware (closed source) so our 2.x version remained freeware and our 3.0 was only available as a subscription sold in chunks of 1 year-subscriptions as opposed to monthly).<p>In retrospect, we are very happy to have chosen the subscription model because it resembles a lot the freeware model: for maintenance you just focus on the latest version/build issues because 100% of your customer base is entitled to have it, you don't compete with yourself across paid versions and don't need marketing effort to explain customers why they should upgrade every year. Your sales effort is also lower because your price point is lower.
It certainly looks like there is no money to be made anymore in compilers, or software development tools in general. That market seems to have been eaten by free open source software.<p>I wonder if there is any advice for software tool builders? Has the money really dried up?
Commercial software may be getting a smaller piece of the pie, the pie is getting larger quickly.<p>I basically agree with Donald Knuth: open source (I would prefer it be libre) software will continue to be more important with passing decades. I expect that if the human species survives long term that in a few hundred years the world(s) will be run at partially by very old and very stable open source software.<p>I have had access to computers since about 1960 (thanks Dad!) and the improvements have been exponential. That said, in the distant future when computer science is a mature science, for many tasks rock solid software will likely be more important than the decade's latest bells and whistles.
It's true that free software is eating into everyone's margins, especially unsustainable business models that run entirely by burning cash and continually raising more and more money in hopes a giant will come and swoop it off it's feet.<p>However, I think there's a problem with attempting to take the assumptions from macro view and drilling it to individual companies and startups. Plenty of awful software with awful websites sell like hot cakes. The age of these companies are ancient, started in mid 90s to mostly early 2000s. The people buying their software don't know what open source is, rather if they see something as free, these are the type of people that think there's something wrong with it. By the articles explanation, they shouldn't exist or they should be fending off attacks from left and right but in reality, the software part of business is actually very small. The fact is, it's a business and the people that make up the customer base. So while it is true that some industries may face fierce competition from "free software" it varies from a spectrum where one end is little to no innovative destruction mostly because of the customers to the other end which this article talks mostly about where ALL software companies are threat. There are still industries where the establishment form coalition and invent complicated "industry standards" to prevent anymore innovation happening. These are business strategies aimed to raise the cost of entry among other tactics that's harmful for the industry but great for the stakeholders.<p>Having said that, the article isn't without merits, there are some very important truths in there. Like almost all advices, take it with a grain of salt.