The Magic Cauldron
Eric Steven Raymond$Date: 2000/08/25 05:11:44 $Copyright © 2000 by Eric S. RaymondCopyright
Permission is granted to copy, distribute and/or modify this document under the terms of the Open Publication License, version 2.0.
Revision History | ||
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Revision 1.18 | 25 Aug 2000 | Revised by: esr |
DocBook conversion. Minor updates for Summer 2000. | ||
Revision 1.17 | 22 Oct 1999 | Revised by: esr |
This version went into the first printed edition. | ||
Revision 1.16 | 8 Aug 1999 | Revised by: esr |
New section, ``Future-Proofing, Market Pressures, and Strategic Business Risk'' | ||
Revision 1.15 | 9 Jul 1999 | Revised by: esr |
New appendix on hardware drivers, and a better explanation of rivalrous goods due to Rich Morin. | ||
Revision 1.14 | 25 Jun 1999 | Revised by: esr |
Added e-smith, inc. | ||
Revision 1.13 | 25 Jun 1999 | Revised by: esr |
Corrected 13% claim about Netscape revenues; added better treatment of free-rider effects, corrected list of closed protocols. | ||
Revision 1.10 | 24 Jun 1999 | Revised by: esr |
A better name for the `Razor Blades' model. | ||
Revision 1.9 | 24 Jun 1999 | Revised by: esr |
New material on `future-proofing', the `Free the Future' model, and a new section on exclusion payoffs. | ||
Revision 1.7 | 24 Jun 1999 | Revised by: esr |
Minor update; clarify criterion (e) in payoff analysis. | ||
Revision 1.5 | 24 Jun 1999 | Revised by: esr |
Minor update; point at definition of `hacker'. | ||
Revision 1.5 | 24 Jun 1999 | Revised by: esr |
First public release. | ||
Revision 1.2 | 18 Jun 1999 | Revised by: esr |
First private review version. | ||
Revision 1.1 | 20 May 1999 | Revised by: esr |
Initial draft. |
This essay analyzes the evolving economic substrate of the open-source phenomenon. I first explode some prevalent myths about the funding of program development and the price structure of software. I then present a game-theory analysis of the stability of open-source cooperation. I present nine models for sustainable funding of open-source development; two non-profit, seven for-profit. I then continue to develop a qualitative theory of when it is economically rational for software to be closed. I then examine some novel additional mechanisms the market is now inventing to fund for-profit open-source development, including the reinvention of the patronage system and task markets. I conclude with some tentative predictions of the future.
In Welsh myth, the goddess Ceridwen owned a great cauldron that would magically produce nourishing food -- when commanded by a spell known only to the goddess. In modern science, Buckminster Fuller gave us the concept of `ephemeralization', technology becoming both more effective and less expensive as the physical resources invested in early designs are replaced by more and more information content. Arthur C. Clarke connected the two by observing that ``Any sufficiently advanced technology is indistinguishable from magic''.
To many people, the successes of the open-source community seem like an implausible form of magic. High-quality software materializes ``for free'', which is nice while it lasts but hardly seems sustainable in the real world of competition and scarce resources. What's the catch? Is Ceridwen's cauldron just a conjuring trick? And if not, how does ephemeralization work in this context -- what spell is the goddess speaking?
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