+++++++++
Subj:	 Re: The Community is the Company
Date:	5/26/01 10:38:43 AM Eastern Daylight Time
From:	loic@gnu.org
Sender:	loic@senga.org (Loic Dachary)
Reply-to:	loic@gnu.org
To:	TonStanco@aol.com
CC:	jneves@ieee.org, discussion@fsfeurope.org, fsfe-france@gnu.org

TonStanco@aol.com writes:

 > Because of the freedoms given by GPL, there is a problem that
 > competing GPL marketing entities will compete themselves to death,
 > since they could always take the code (that they don't pay to
 > develop) and sell for near zero cost that doesn't recoup the
 > development cost.

	I think I'm missing a point here. What would the other
marketing entities sell for "near zero cost" ? I see nothing in the
Free Software that can be sold for near zero cost. If the marketing
entity sells boxes (Debian distribution for instance) including
software they did not pay to develop, they still have to pay for
making the packaging and it's not "near zero cost". In short I have
trouble to see why competing marketing entities could not survive.
Sure, they will compete but what's wrong with that ? Can you explain ?

+++++++++
Subj:	Re: The Community is the Company
Date:	5/26/01 6:05:01 PM Eastern Daylight Time
From:	TonStanco
To:	loic@gnu.org, TonStanco
CC:	jneves@ieee.org, discussion@fsfeurope.org
CC:	fsfe-france@gnu.org

>   > Because of the freedoms given by GPL, there is a problem that
>   > competing GPL marketing entities will compete themselves to death,
>   > since they could always take the code (that they don't pay to
>   > develop) and sell for near zero cost that doesn't recoup the
>   > development cost.
>  
>  I think I'm missing a point here. What would the other
>  marketing entities sell for "near zero cost" ? I see nothing in the
>  Free Software that can be sold for near zero cost. If the marketing
>  entity sells boxes (Debian distribution for instance) including
>  software they did not pay to develop, they still have to pay for
>  making the packaging and it's not "near zero cost". In short I have
>  trouble to see why competing marketing entities could not survive.
>  Sure, they will compete but what's wrong with that ? Can you explain ?

I was being unclear. What I should have said is "near zero development cost,"  
that won't fund the developers work, since they can just take the code under the GPL for zero cost. They will still have variable marketing costs, that they each must recoup. And depending on how much friction the market has, some marketers can sell for more than their variable marketing costs and maybe even make some profit. 

But the main issue is the wrong people are getting the money. Most developers will get nothing, because for any one marketing company that tries to charge more so it can fund development, other marketing companies will sell the same thing without the development cost component. Therefore, there is a cost problem in doing the right thing and paying the developers, that competing marketing firms won't have.

That is why a superstructure is needed to incorporate the development cost into the equation. Once that superstructure is in place, then competing marketing firms can compete and fund the development at the same time, which is the independent consultant layer in the CommCo. The FSMC becomes a wholesaler and the others are retailers, so that the development costs are funded.

The development cost in free software is currently an externality that must be brought into the equation for a properly functioning economic solution. This is like pollution made in one country and causing problems in another. The solution is an international superstructure to coordinate the national bodies, so that the full cost is incorporated in the right entities. Otherwise the economic solution is suboptimal.

You also need to remember that free software must compete with proprietary software, not just with other free software marketing companies. And without paying for the development in free software, proprietary will have most of the developers, because it pays its developers, even though proprietary is less efficient as a development method. Without incorporating free software development costs into the pricing to fund it, proprietary as a community will always have an advantage over free software, because most developers will code for it and resist the free paradigm. 

Now, free software development is so much more efficient that it is doing quite well against proprietary development even with this proprietary advantage. But the real question is how much more great software would be created and faster, if everyone worked in the free development model. But to get the 4 million proprietary developers to work in free, they must be paid. 

Once free software pays its developers, then it not only has the efficiency of free development, but will also have the former proprietary developers. Also, most free developers work somewhere else to pay the bills. So, if they get paid to develop free software, they will produce more free software, because now they don't have to work somewhere else to personally fund their own free software development.

These efficiencies all interrelate and multiple, because all the obstacles and countervailing forces are removed.

+++++++
Subj:	 Re: The Community is the Company
Date:	5/27/01 2:50:24 PM Eastern Daylight Time
From:	loic@gnu.org
Sender:	loic@senga.org (Loic Dachary)
Reply-to:	loic@gnu.org
To:	TonStanco@aol.com
CC:	jneves@ieee.org, discussion@fsfeurope.org, fsfe-france@gnu.org

TonStanco@aol.com writes:

 > I was being unclear. What I should have said is "near zero
 > development cost,"
 >  

	I read your explanations carefully. Could is be summarized as:
Free Software cannot be developped if there is competition ? Or: 
If Free Software wants to compete with non free software from a
commercial market point of view, it must find ways to reduce competition
in order to better share the develpment costs ? 

	What I have troubles to understand is why competition would
harm people and companies working on Free Software. My assumptions are
that 80% of the commercial activity surrounding Free Software is
unrelated to development (packaging, support, training, counseling,
branding, exhibitions etc.) and the other 20% is related to development.
I also assume that in a Free Software economy you pay for software
development because you need it (internal software infrastructure,
missing components that will make packages sell better, improve your
brand etc.). 

	If you pay for a development to be done, it can be used by others.
This may be seen as a disadvantage but it's the game. At the same time you
benefit from the development paid by countless others. All in all everyone
wins. 
	If you sell packages only and never pays for any developers (this
is a dream since we all known package makers have significant development
costs) then you provide a necessary added value to the Free Software
that you ship : it becomes available to the public. The public will
know and use the software and is more likely to pay for more development
to the companies that are able or willing to do this.
	If you sell training courses it is very likely that you won't
pay for development at all. However the people you educate will better
understand the software and are likely to require more developments
(to extend its functionalities or dialog with other software or catchup
with standards etc.).
	I could go on the same logic but I guess you understood
the logic I'm following.

	My feeling is that everyone selfishly pays for the bits it
needs and when you add all the bits it makes a great Free Software
universe. Also, not everyone doing business with Free Software pays
for development but to the very least the become dependant on Free
Software and this, in itself, is a value added. 

	I have troubles understanding why a structure should be built
to better redistribute the development costs. What is the major
drawback that needs to be fixed in this way ? I think you know have a
clear view of my understanding of the situation and will better be
able to fix it if needs be.

+++++++++++++

Subj:	Re: The Community is the Company
Date:	5/30/01 6:27:04 AM Eastern Daylight Time
From:	TonStanco
To:	loic@gnu.org, TonStanco
CC:	jneves@ieee.org, discussion@fsfeurope.org
CC:	fsfe-france@gnu.org

>  I read your explanations carefully. Could is be summarized as:
>  Free Software cannot be developped if there is competition ? Or: 
>  If Free Software wants to compete with non free software from a
>  commercial market point of view, it must find ways to reduce competition
>  in order to better share the develpment costs ? 

This is right and wrong at the same time. Free software has lots of competition and it must continue to have competition. But the competition is in the developmental competition by the developers. What free software can't have is simple financial competition through competing marketing corporations. 

In the Industrial Age, there was a certain balance of intra-firm (internal employee competition) and inter-firm competition (across company competition). In the Intellectual Age, there just needs to be a different balance because intellectual pursuits are different from industrial production. 

Because there needs to be more sharing of information in the Intellectual Age for the greater efficiencies, more work has to be organized intra-firm. Intra-firm is never real financial competition as it is with inter-firm. Intra-firm there is more cooperation and little financial competition. Inter-firm there is less cooperation and more competition. 

If you think of an entire industry with all its employees before they are divided into teams (e.g., distinct companies), you will see that in industrial companies during the Industrial Age, there is a certain balance of intra-firm organization and inter-firm organization. It was never completely a free market organization, because intra-firm is never based on market competition, but based more on sharing of a company's assets, information, knowledge, finances, etc., (i.e., as a community -- just a smaller community).

The CommCo just rebalances the proportions of intra- and inter-firm organization. The CommCo assumes that with software (since it monopolizes because of network effects), the efficiency gains of intra-firm organization are so huge that it  will be all within one company (one huge intra-firm organization). But this may not be true in the end, because there may some unforeseen friction that makes the balance smaller. But I have no doubt that the balance achieved in the Industrial Age is absolutely wrong and that in the Intellectual Age there has to be much, much more intra-firm organization (even if not all intra-firm) and much less inter-firm organization.

This is really what all this is about at a macro level -- how much is intra-firm and how much is inter-firm, because intra-firm shares resources and information like free software implies, and inter-firm does not share resources with those outside the firms.