Open Source Apps (2013)

#1

Post by rimher » Thu, Mar 08, 2018, 5:04 PM UTC

Open Source Apps (2013)
stratechery.com

Re: Open Source Apps (2013)

#2

Post by confounded » Thu, Mar 08, 2018, 5:16 PM UTC

(2013)

Re: Open Source Apps (2013)

#3

Post by sheetjs » Thu, Mar 08, 2018, 5:26 PM UTC

@patio11's recent tweetstorm touched upon the core point

> Most open source software is written by programmers who are full-time employed by companies which directly consume the software, at the explicit or implicit blessing of their employers. It is not charity work, any more than they charitably file taxes.

https://twitter.com/patio11/status/936629310785437696

The actual monetization, as the post explains, comes from related products and services. The presented Oracle analogy to IAP is fascinating:

> Oracle offers a basic version of MySQL under a GPL license, with additional closed source – and expensive! – add-ons that better fit specific businesses’ needs. The allegory here is in-app purchase: a basic experience that gets the user invested in your product, with value-added options that are more attractive because of said investment

Re: Open Source Apps (2013)

#4

Post by jeffreyrogers » Thu, Mar 08, 2018, 5:45 PM UTC

It's not that apps want to be free, as much as apps that any reasonably competent programmer can make are driven down in price because many reasonably competent programmers do make them.

If you look at applications that require a large amount of domain expertise to build (CAD, audio/video editing, etc.) they're still expensive and have only recently begun to come down in price, in part because there are some free versions that, while noticeably inferior, are still useful to a substantial population of users.

Re: Open Source Apps (2013)

#5

Post by QasimK » Thu, Mar 08, 2018, 5:54 PM UTC

The same would apply to any digital content (zero-copy cost) which can be substituted. For example, why watch film A when film B is available more cheaply. Of course, it's difficult to have substitutions for entertainment (for various reasons)... right now.

However, I do think the long-term trend here is downwards as well and I'd use music as an example. With streaming services, the cost of music is much lower compared to purchasing music. The streaming service acts as an aggregator for different content and has an incentive to pick the cheaper content (with the opposing force of consumers wanting particular things). But really, if the quality is high and the music chosen to be played is automatic (via recommendations) the underlying artist is less significant (in general - I know people can be fans).

Re: Open Source Apps (2013)

#6

Post by jbob2000 » Thu, Mar 08, 2018, 5:58 PM UTC

This applies to a very, very narrow segment of software. If I have to run a server, then yes, I do indeed have costs. And those costs go up the more popular my app gets.

And if the app gains any kind of serious pickup, I am going to need a client service team to handle all the bull crap people will be flinging my way. (Seriously, how many open source projects die because the maintainers get sick of managing the issue board?)

Re: Open Source Apps (2013)

#7

Post by nategri » Thu, Mar 08, 2018, 6:04 PM UTC

As a counterexample, Dark Sky is one of the few apps I pay for that has an endless array possible alternatives. The last time I looked all substitutes were ugly, clunky, bloated by ads, or all of the above. I pay so I don't have deal with an inferior experience in a frequently used app. So, while the details of what an app accomplishes may be easy to replicate... maybe there's always room for a premium experience?

Re: Open Source Apps (2013)

#8

Post by xxpor » Thu, Mar 08, 2018, 6:08 PM UTC

jbob2000 wrote: post #6

This applies to a very, very narrow segment of software. If I have to run a server, then yes, I do indeed have costs. And those costs go up the more popular my app gets. And if the app gains any kind of serious pickup, I am going to need a client service team to handle all the bull crap people will be flinging my way. (Seriously, how many open source projects die because the maintainers get sick of managing the issue…

If your costs are servers, your marginal costs are still $0 for the app itself. IMO, you're better off with a $0 app and a subscription model, than capturing the revenue once when someone purchases the app.

Re: Open Source Apps (2013)

#9

Post by sctb » Thu, Mar 08, 2018, 6:23 PM UTC

confounded wrote: post #2

(2013)

Thanks! Updated.

Re: Open Source Apps (2013)

#10

Post by osteele » Thu, Mar 08, 2018, 6:27 PM UTC

> What makes the software market so fascinating from an economic perspective is that the marginal cost of software is $0.

I see this claim a lot.

The marginal cost of software is actually its support cost﹡.

If some customers bought the product without a support contract, then the marginal cost of the good that is sold to those customers is the (non-zero) cost for support staff to categorize them and turn them away.

If none of the license includes support, then the vendor doesn't need support staff or activities, and the marginal cost is indeed zero.

Only some software products — especially among commercial software products — don't include any support at any price point.

﹡ Also marginal increases in distribution costs. Also costs that stem from marginally greater exposure to product liability issues and claims.