Is Open Source bad for business?

There are people that contend that Open Source destroys entrepreneurialism.  Not only does Open Source not have to destroy the entrepreneurial spirit, it can drive it by motivating companies to find ways to add value to the free software.  Take your average gas station.  It makes money from air and water, both of which are free.  When it installs a machine that compresses free air that can be added into a car tire, it charges 75¢ for the use of the inflation machine.  It takes the same machine, puts a large tube with a nozzle on it, flips the polarity of the DC motor, and it removes large quantities of air from your car with any debris within range.  The station charges 75¢ for the use of the vacuum.

The same approach breeds healthy competition which is the core of any free-market capitalist society.  Two gas stations may charge 75¢ for the tire inflator, but the station that leaves the air on for an extra 60 seconds and puts a pressure gauge on the end of hose will draw more customers because its offering is better than that of its competitor.  Both stations may lose out to a third station that gives its patrons free use of the inflator when they purchase gas because in a tight economy, everyone is looking to get something for nothing.

The greatest application of this principle is not found in the tire inflator or the vacuum.  It is found in the gas station’s refrigerated case where it takes plain old tap water that has been run through a filter and placed in a flimsy plastic bottle and sells it to you for $1.75 during the week and $2.25 on July 4th.

In the hands of an entrepreneur, a thing that costs nothing can be worth something.

Tom Sawyer is smiling down upon us from heaven.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s