shirky.com Clay Shirky's Writings About the Internet
Economics and Culture, Media and Community, Open Source
Why Stricter Software Patents End Up Benefitting Open Source
8/18/1999
 
As the software industry cracks down on its customers, the software itself is opening 
up. Open Source software, the freely available alternative to commercial software, is 
making inroads in the corporate world because of its superior flexibility, adaptability, 
and cost. Despite this competition, the commercial software industry has decided that 
now's the time to make licensed software less flexible, less adaptable, and above all, 
more expensive. A proposed new law, called the Uniform Computer Information Transactions 
Act (UCITA) would give software manufacturers enormous new powers to raise prices and to 
control their software even after it is in the hands of their customers. By giving the 
software industry additional leverage over its customers, UCITA will have two principal 
effects: first, it will turn software from a product you buy to a service you pay for 
again and again. Second, its restrictions will greatly accelerate the corporate adoption 
of Open Source software.  
 
All trade groups aspire to become like OPEC, the cartel that jacks up oil prices by 
controlling supply. The UCITA working group is no exception: UCITA is designed to allow 
software companies relief from competition (companies could forbid publishing the results 
of software comparisons), and to artificially limit supply (any company which was acquired 
by a larger company could be forced to re-license all its software). The most startling 
part of UCITA, though, is the smugly named "self-help" clause, which would allow a 
software company to remotely disable software at the customer's site, even after it has 
been sold. This clause could be invoked with only 15 days notice if a software developer 
felt its licensing terms were being violated, making the customer guilty until proven 
innocent. UCITA's proponents disingenuously suggest that the use of "self-help" would be 
rare, as it would make customers unhappy -- what they are not as quick to point out is 
that the presence of "self-help" as a credible threat would give software companies 
permanent leverage over their customers in negotiating all future contracts.

Unfortunately for cartel-minded software firms, the OPEC scenario is elusive because 
software isn't like oil. Software has no physical scarcity, and the people who know how 
to create good software can't be isolated or controlled the way oil wells can. Where 
UCITA sets out to make software a controlled substance, the Open Source movement sets out 
to take advantage of software's innate flexibility of distribution. By making software 
freely available and freely modifiable, Open Source takes advantage of everything UCITA 
would limit -- Open Source software is easy to get, easy to modify, and easy to share. 
If UCITA becomes law, the difference between Open Source and commercial software will 
become even more stark. Expect Open Source to do very well in these circumstances.

Economics 101 tells us that people make economic decisions "on the margin" -- a 
calculation not of total worth to total cost, but of additional worth for additional 
cost. For someone who wants a watch for telling time but not for status, for example, 
the choice between a $20 Timex and a $20,000 Rolex is clear -- the $19,980 marginal 
cost of the Rolex knocks it out of the running. In the case of Open Source vs. commercial 
software, the differences in cost can be equally vast -- in many cases (such as the 
Apache web server) the Open Source solution is both cheaper and better. Cartels only work 
if there is no competition, a fact the UCITA group seems not to have grasped. If UCITA 
becomes law -- that could happen as soon as December -- the commercial software industry 
will be sending its customers scrambling for Linux, Apache, and the other Open Source 
products faster than they already are. 


Write clay@shirky.com with questions or comments.

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shirky.com Clay Shirky's Writings About the Internet
Economics and Culture, Media and Community, Open Source