IDEA: Free software business model

IDEA: Free software business model

Post by David Christ » Mon, 09 Mar 1998 04:00:00



I had an idea that I'm formulating a business plan for.  
I thought people here might want to see it ...

does anyone know if this has been done already?

The approach would use ODSC's (Open database service coordinates) to  
create a new "for profit" paradigm for the free software business
sector.

The ODSC concept involves using the open market to determine the value
of bug issues, and to offer an incentive to fix them accordingly.

PROPOSAL:

Bugs would be entered into a public database with a market value,
and programmers would be rewarded in proportion to their contribution.
ODSC's would make profit by providing billing, payout, and tracking
services that it would receive a commission for.

In this capacity ODSC's would not only create a new paradigm for software
development, but would also provide a new means for product enhancement
and support.

DETAILS:

In this model an ODSC would maintain a public request database for
bug tracking, bug fixing, programming requests, and service requests.  
Every request in the database would be given a market value, expiration
date, and other terms by the creator who will make a promise to pay
that amount upon completion.  

Other people who also want these requests done may "up the ante" and make
promises to pay additional money upon completion.  This way requests could
be handled from one person who is willing to pay a million dollars,
or a million people who are willing to pay a few dollars.  In addition,
this could create a scenario where 10 companies could split the cost of
development that none of them would have put up individually.  (requests
could require a one dollar submission fee or something nominal)

Programmers who want to contribute, could make changes as individuals
(or they could do so as a group or company).  As source changes are
contributed, the ODSC's would monitor contributions and evaluate their
proportional worth.  When an ODSC deems a request completed, it will post a
notice of completion and send out bills to all those who made promises,
collect a small, known, fixed percentile for commission - and pay all
parties who contributed in proportion to their contributions.
(Bids could even be made as a monthly rate, that the ODSC's would
pay out for as the project progresses)

In this scenario, it would be in the best interest of ODSC's to ensure that
contributors are rewarded as fairly as possible in proportion to the
value of their efforts, or they may not contribute anymore.  And that
requesters are happy with the quality of their fulfilled request, or they
might not choose to request through that ODSC anymore.

The key to the ODSC model is this, while some people may be willing
to wait a while for an innovation or a free software desire to
get completed, others may not and would be willing to pay to create
an incentive for people to program toward their wishes, who might not
have otherwise.  For programmers, this creates a model where they
can program for profit, or out of love, or both and suffer no
reproof or restraints.  For businesses, there is a strong
incentive to use an ODSC approach because in a "free" software model,
one company may not wish to put up a huge amount of money to develop
source that all their competitors could easily copy. But if
10 companies could team up and pay a tenth of the cost for each to create
a project that doesn't lockout any of the others, then there is not only
a strong incentive to cooperate, but strong market incentive for
those who program also.  (and a strong incentive to standardize)

Whether consumer, or individual, the amount paid in would likely reflect
your value that the project has to you - and how long you are willing to
wait.

The ODSC also creates a business model based off of business needs
rather than software companies perceptions of businesses needs.  
A plywood distribution warehouse that wants to create an inventory
database might not find a need to pay anything if there willing to wait
a few years, might pay a little if they want things hurried up a bit,
or might pay out a ton if they need results NOW!  The money would be used
not to buy software, but rather to buy resources, to get time allocated
to their goals over someone else.

With software "Free loaders" are not a burden, because their use of
information doesn't deprive anyone else use of information.  In fact,
massive freeloading in the software business may even create more demand
as these freeloaders find that might they be willing to pay a few bucks
to get "such and such niche modification" done.  Free loaders would benefit
from the software changes, but would not have a say in how changes are
made unless their willing to pay.


Founder of the IP NOT! foundation
                    http://www.ipnot.org
           (opposed to intellectual "property" on every frontier)