Monday, July 14, 2008

The Value of Free

How do you put a value on the products created through open source? Do you consider all the time spent crafting quality software? Take into account your own effort in advocating its use? Charge for packaging and a profit margin? How, exactly, would Best Buy have come to the conclusion that Ubuntu Linux is worth $19.99? I think the answer is fairly simple: they guessed.*

You see, putting a price on open source is about as difficult as nailing jelly to a tree. You could charge in the ballpark of competing software (Windows Vista, which starts at $199.99 and runs up to $299.99), but I'll bet people would balk at that, with claims about it being available free, you can't sell open source for that kind of money, and so forth. Although, a Red Hat Enterprise edition will run you about $349 (with 1 year support), and that's built on open source.

Maybe it's because Red Hat sells it; a company that has put a lot of effort and code into the product. I can buy that (literally). Here's a company that's been involved in open source for about as long as Linux has been around. They deserve to sell free software, and make a profit from it. Okay, now how about Dell? They sell Red Hat and Ubuntu on some of their systems, and just a quick comparison of systems shows me that Ubuntu costs an extra $20 over a Windows-based system (check out their Desktop Inspiron). Not bad, for a free OS, but I think they seriously undervalue it. Would there be an outcry if they charged Vista prices?

According to the text printed right on every Ubuntu CD, "You are encouraged and legally entitled to copy, reinstall, modify, and redistribute this CD". Does this include selling the CD, instead of just sharing it with friends, colleagues and neighbours? Well, let's look at the licensing. In general, the software included with Ubuntu is licensed under the GPL or the LGPL. If we look carefully at the GPL (v2.0), the third paragraph of the Preamble states:

...if you distribute copies of such a program, whether gratis
or for a fee...
Gratis being distributing for free, and "for a fee" pretty much says you can sell software licensed under the GPL. How about the LGPL? Strangely, that same phrase appears in the Preamble (v2.0). Under the newer GPL 3.0 and LGPL 3.0, they've moved this language around, but it still exists.

Why all the fuss over whether you can sell something that is free? How fair is it if a company like Best Buy starts distributing open source software and is actually making a profit from it? According to the licensing, it is perfectly fair! Maybe not 100% ethical, but fair! Personally, I'd like to see them donate something of their proceeds back to the open source projects they affect, but they aren't obligated.

Another way to look at it is to consider how much Ubuntu (for example) would benefit from Best Buy or Dell even giving their product away (like the text on the CD says -- share it around). It's all market share, and increased awareness, so it is irrelevant if a vendor charges $19.99 or a more competitive $199.99. Consider the old adage, "You get what you pay for." When it comes to free software, does this hold true? In many people's minds, this is the perception. Through Best Buy, Dell or anyone else putting a value on Ubuntu Linux, it changes consumer perception. I think they're being very fair in pricing open source low, due to it's availability for free, but at the same time I value the fact that they are raising consumer awareness of open source, regardless of their own profit motives. The actual worth of the product becomes a moot point; once an individual is exposed to open source, they usually become fans pretty quickly. Look at the Firefox phenomenon.

Personally, I think this is an idea that really needs to be exploited by open source advocates of all sorts. Think the open source products you use are good enough to compete in the market? Sell it to the masses! If you feel the need to give your profits back into the community, all the better. The market -- and the community -- will decide if your move has been worthwhile, and your success will ride on how you handle the diplomatic introduction of open source to a whole new world of users.

*I still think the price is somewhat arbitrary, but I'm pleased to find I'm wrong about the lack of connection to Canonical, and that the boxed set actually comes with 60 days support. Here's a link I failed to read prior to this post.