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Why is OSS Commercial Software So Expensive?

Posted by Cliff on Wed Oct 04, 2006 06:04 PM
from the not-cost-competitive dept.
An anonymous reader asks: "Our startup honestly wanted to use OSS products. We do not want to spend time for any OSS bug fixing so our main requirement was -official support for all OSS products-. We thought were prepared to pay the price for OSS products, but then we got a price sticker shock. Now behold: QT is $3300 per seat. We have dropped the development and rewrote everything to C# (MSVS 2005 is ~$700). Embedded Linux from a reputable RT vendor is $25,000 per 5 seats per year. We needed only 3 seats. We had to buy 5 nevertheless. The support was bad. We will go for VxWorks or WinCE in our next product. Red Hat Linux WS is $299. An OEM version of Windows XP Pro is ~$140. A Cygwin commercial license will cost tens of thousands of dollars and is only available for large shops. We need 5 seats. Windows Unix services are free. After all, we have decided that the survival of our business is more important for us then 'do-good' ideas. Except for that embedded Linux (slated for WinCE or VxWorks substitution), we are not OSS shop anymore." Why are commercial ports of OSS software so expensive, and what would need to happen before they could be competitive in the future?
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  • by eldavojohn (898314) * <my/.username@@@gmail.com> on Wednesday October 04 2006, @06:06PM (#16313653) Homepage Journal
    Why is OSS Commercial Software So Expensive?
    Possibly because it's not a good business model for enterprise consumers--and therefore must up its charges.

    I mean, you want to sell a product that a community developed. Which means its quality could be variable. On top of that, you want to support it. The depends on excellent documentation which isn't enforced in the open source community. There's probably a lot of dead OSS projects for every one successful OSS project. You'll notice that the software itself is very very free ... what the summary is complaining about is 'seats' (training or support).

    This particular user seems to be looking for portable technologies. The commercial versions of these technologies are still in their infancy which does not bode well for the OSS alternatives. I would suggest that you're paying the early adopter fees on a few of these things. Afterall, Google uses a stripped down version of Red Hat. My company of tens of thousands employees uses Red Hat company wide. They find the free cost to be quite lucrative--just buying support whenever it's needed.

    The OSS business model works well for the individual user who isn't looking for support because the free end product is out there for them and they use it if it works. The enterprise consumers looking for support year after year must pay quite a bit.

    The software itself is not expensive, nor is it necessarily harder to support--it's just very difficult to create this support out of nothing.

    In my opinion, you're going about OSS all wrong. You should stick with what is working and slowly move to a new OSS tool one at a time. You will encounter learning curves. But there is a lot of information online and, worse comes to worse, you can look at the source/documentation yourself.

    I imagine there's something about the product you aren't telling us about that is quite constraining ....
    • by Anonymous Coward on Wednesday October 04 2006, @06:40PM (#16314145)
      I mean, you want to sell a product that a community developed. Which means its quality could be variable. On top of that, you want to support it. The depends on excellent documentation which isn't enforced in the open source community. There's probably a lot of dead OSS projects for every one successful OSS project. You'll notice that the software itself is very very free ... what the summary is complaining about is 'seats' (training or support).

      How is anything you just said unique to F/OSS? The quality of proprietary software is variable, and so is the support. The quality of documentation for proprietary software is likewise spotty. Proprietary software projects die on the vine all the time; at least F/OSS projects can be easily picked up again, if there is any interest.

      As for the article's premise, that commercially supported F/OSS software is expensive - how is that any different than proprietary software? There's a reason that Paul Allen and Larry Ellison are in a boat building competition. I really with the Slashdot editors would spend a least an iota of energy attempting to filter out the trolls; but maybe they just enjoy the flamefests.
      [ Parent ]
        • by Znork (31774) on Thursday October 05 2006, @01:33AM (#16317593)
          "you can get it directly from the company that makes the software."

          Unless they're out of business. Or have discontinued the product. Or most of the development team has quit.

          The difference between opensource and proprietary software is that with proprietary software only one company is legally allowed to fix any bugs.
          [ Parent ]
            • by mabhatter654 (561290) on Thursday October 05 2006, @12:07PM (#16323901)
              excellent example of this... the OS version RH WS versus Window XP. He claims RH WS expensive at $299 while windows is $140 OEM. Read that again. RH is offically supported for so many instance calls per year/term etc.. and if you find a bug they will write it down and may actually fix it... just for you! For 5 seats that's a steal. Compare to MS windows, for starters that $140 price does not entitle you to call Microsoft for any problem! There is NO support for OEM, you must call who you bought it from. The "supported" version is $299 as well... but that still doesn't entitle you to call for support... you have to pay per call for that as well. For 5 seats of windows you're not even a bug on the windscreen.

              As far as the other products he mentioned, they are buying commercial licenses without the usual "GPL only" restrictions as well as support. These are companies that will actually ANSWER your calls and fix problems you find, not just take your money and point you to a website. Remember, MS Visual studio, C#, CE tools may be cheap for price, but come with NO SUPPORT!!! NONE! if you want to actually call somebody, you have to pay per call/hour/service additional. The cost for most commercial products is only to legally USE them. not get help!

              Perhaps this company didn't need quite so many support options, it seems a little silly to purchase the "deluxe" versions for such a small shop. But I'd give them credit for trying and helping out by paying!

              [ Parent ]
    • by nine-times (778537) <nine.times@gmail.com> on Wednesday October 04 2006, @06:57PM (#16314409) Homepage

      What I find surprising is that, in the few responses I've skimmed (including yours), I haven't seen anyone mention that these companies need to pay programmers. There's this tremendous myth that OSS is all written by good Samaritans in their spare time, and companies that sell it commercially simply rebrand it, box it, and ship it.

      It's like people think that Linux is free, so why can't Redhat distribute it for almost nothing? Redhat and Novel employ programmers, too. In fact, the paid programmers make a tremendous contribution to all of this FOSS we benefit from. That's right, sometimes it's the big companies' work that makes the FOSS version so good, so the commercial companies aren't getting all that work for free.

      I don't mean to insult anyone here, and I don't want to quibble about the ratio of good Samaritan contributions vs. paid contributions. Still, you can't discount that there are Redhat-employed programmers working on Redhat, and sometimes Redhat's work ends up in the free stuff.

      So what I'm saying is, businesses selling commercial OSS have the same costs as a closed shop, even though they receive some free help. And for all the free help they get, these savings are offset by the fact that people don't have to buy their software. So let's say they cut their programming costs in 50% (just a number I'm plucking out of the air), their revenue is also cut by 75% (another made up number) by people who would buy it, but decided instead to download for free.

      And this doesn't even take into account the whole dynamic of competition in commercial OSS. In short, for whatever Redhat spends in development, Novel also gets that work for free, and vice versa. Now maybe Novel doesn't want to use that work, and maybe Redhat is benefitting from Novel in just the same ways, but it sure does complicate the business model.

      [ Parent ]
      • by d.3.l.t.r.3.3 (892347) on Thursday October 05 2006, @02:09AM (#16317735) Homepage

        To my experience with commercial OSS solutions, commercial OSS with a project taken from the community is practically illicit competition. A company can live up with 2 or 3 integrators and sell software made by 10-20 people, manpower-wise. Sure they still have to pay for those 2 or 3 programmers, but it is way less than hiring, sustaining and training a whole staff.

        That's why I call it a scam. Starting up a project to be commercial OSS it's a nightmare: you get almost no support by the community till you have something working, especially if you aren't endorsed by one of the well-known OSS VIP who seems to be the only one that can say "I opened a new OSS project to improve my salary and climb the industry ladder" and get people working without salary for them. You are stuck with the same expenses and problems of closed source management, with the added value that a competitor can start integrate your solution once it works and make it better with 10-20% the money you invested in the project, assuming you are able to make it even with all the expenses to win the inertia of starting a business. Sure, given the time patches will start to come in (especially from early adopters, not necessarily by the extended community) but it too much risky to make it commercial open source from the start if you plan to start from scratch. Most of the successful OSS commercial solutions started up from hobby project or are simply integrations of other people work, they are not fair when they define themselves successful commercial enterprises, since they didn't deal with the startup costs and started with something of value by itself.

        In addition, for enterprise grade software, OSS makes no difference over proprietary solutions. I now work on a small corporation based on 7 different nations and everywhere, while the platforms used vary from full OSS (my preference) to totally Closed Source, the customer gets always the sources on software developed with full control over it. The added value of OSS for them is on the infrastructure (no money spent on anything is not strictly the software), not on the project itself. Wonder why corporations are moving to SOA? That's the reason, no more clients getting the source code to turn on the less paying maintainer, since they are getting only the services.

        Aside several enterprise projects, most of the OSS software reside in the realm of user-oriented utilities. Here, aside for being free, there's still too small interest on the source for the end users. I usually say to our managers that aside to fork a project to add a sterling point on your CV, nobody cares about sources on OSS software for personal use, since the selling points of these applications are cost (the less the better) and functionalities (the more the better). Sure OSS ensures these small projects will be alive even if original devs abandon it, but here more than anywhere its almost impossible to make money: if you want to get paid a bozo can start forking a free version again. If you get commercial someone can still relieve your software and make it better with less hassle, outselling you. There are a lot of commercial implementations of OSS software that are so much polished and user-captivating that outshadow community driven ones, most of them are on dog eat dog mode, continously cannibalizing other competitors in functionalities and sparky features (take a look at the jabber clients). So, if you are the one developing the software AND you are also in need to improve it to remain competitive, you are pretty much rising your internal costs and are more likely to be outsold by competitors that only integrates waiting on the road for code to come. Improvements have less impact than new features, but they are still costly. Planning new versions of your software while improving your current one to remain commercially competitive, if you aren't backed by a license that allows you to ask money from competition, pretty much kills you, otherwise your project will start to stagnate on itself (like many OSS do, to

        [ Parent ]
        • by hazah (807503) on Wednesday October 04 2006, @07:46PM (#16314973)

          I hope you're not just trolling...

          Information wants to be free.

          What the hell is that supposed to even mean?! As far as I can tell, information is a pretty damn abstract concept, and it is people, if anything, that ever want something. Someone slaving away at the keyboard to make something work cannot be described as "information". It is called "labour".

          Hey, the argument works for other IP. Why should RH be an exception?

          First, to clarify it to anyone who may actually be misinformed enough to believe this nonesense, the whole idea behind the GPL is to undermine the concept of IP. Therefore, RH is most definately an exception to IP. While companies like Microsoft rely primarily on distribution sales (sometimes almost to the point of competing with themselves), RH is relying on providing customers with services (and they probably sell things too, but I don't feel like checking). So, no, this argument doesn't work, at all, without exception.

          [ Parent ]
          • by ChaosDiscord (4913) * on Wednesday October 04 2006, @10:56PM (#16316721) Homepage Journal
            Information wants to be free.
            What the hell is that supposed to even mean?! As far as I can tell, information is a pretty damn abstract concept, and it is people, if anything, that ever want something.

            I trust when your physics teacher said, "Water seeks its own level," you got equally bent out of shape, pointing out that water doesn't "seek" anything.

            Now the grandparent was indeed trolling. "Information wants to be free" isn't a moral justification for copyright infringement. Like "water seeks its own level," it's description, not prescription. It's a short reminder that information tends to be distributed. It's inherent to our nature as humans, we like sharing information. We invented speech, pictograms, writing, printing, telegraphs, telephones, film, television, fax machines, email, the web, and more because we love sharing information so much. All it takes for information to escape is for a single small leak. Once it's happened, you're done. To try and stop information from being free, we set up expensive technological measures like DRM and legal measures like confidentiality agreements and top secret clearance. And yet the information escapes.

            "Information wants to be free" has gotten a bad rap because some idiots decided it mean that information should be free. No, it's just a description of human nature. Information is going to tend to be reproduce and distributed. For people who rely on suppressing the spread of information it's a reminder of what they're up against, just like someone building dams needs to keep in mind that water seeks its own level.

            [ Parent ]
        • by skiflyer (716312) on Wednesday October 04 2006, @08:29PM (#16315365)
          I don't really buy that argument, though... lots of people download closed source software without paying. The ones that need support, or want to support the company for whatever reason, are the ones that pay. At this point, OSS just doesn't have the user base it needs to make cheaper prices profitable, but that's not because of people who download it for free. It's because the ones who need support for it aren't very plentiful at the moment.

          Not the kind of stuff this guy is talking about though. Personally I think the problem is he's comparing apples to oranges... I don't have numbers, and I'm not going to go get them, but let me point out a few of the obvious flaws in the summary IMO.
          • RHE to WinXP OEM: Uh, no... Ubuntu to WinXP OEM, RHE to Win2k3 Server
          • QT to MSVS2005: Why not go GTK+ vs. C# Express, both free
          • Embedded Linux ... that's about volume, if you're embedding linux you should be saving a small fortune per appliance vs. putting WinCE on each of them, but yeah, the development aint cheap.
          • Cygwin commercial vs. Windows Unix tools, I think you're mis-understanding what each of those can do.
          Right tool for the job, sometimes it's OSS, sometimes it's not... but the above post is like me complaining about the cost of steel vs. plastic because a caterpillar bulldozer is pricier than my nephew's sand bucket.
          [ Parent ]
          • by harlows_monkeys (106428) on Wednesday October 04 2006, @08:54PM (#16315599) Homepage
            RHE to WinXP OEM: Uh, no... Ubuntu to WinXP OEM, RHE to Win2k3 Server

            The RHE he was using for comparison was RHE WS, which is an apt comparison.

            [ Parent ]
            • by nine-times (778537) <nine.times@gmail.com> on Wednesday October 04 2006, @09:18PM (#16315829) Homepage
              Microsoft offers support and training included in the cost of a license in Windows? I've never heard of that.
              [ Parent ]
              • by skogs (628589) on Wednesday October 04 2006, @10:18PM (#16316365) Journal
                Mod parent up.

                Enterprise support is availabe, but most of the time a qualified individual can search the KB articles just as fast the the dork on the other end of the phone in Microsoft.

                [ Parent ]
                • by ajs318 (655362) <sd_resp2&earthshod,co,uk> on Thursday October 05 2006, @03:23AM (#16318029)
                  Bollocks.

                  The Open Source Community is very forthcoming with help. No matter what problem you're having, you can rest assured that someone else has already had that very same problem before -- and solved it, and written about how they it. Google is your friend. Also, Linux at least is modular by design, which simplifies troubleshooting. As counter-intuitive as it may sound, knowing how to fix one problem on a Linux system may help you fix an apparently completely unrelated problem.

                  The reason why commercial licences for software also available under the GPL are so expensive, is to discourage you from buying them and make you choose the Open Source version instead. As long as you give back any improvements you make (or keep them secret, and keep your trap shut if/when someone else makes the same improvements and gives them away) you'll be fine. If you want to write closed-source software, you have to pay for it in money -- which can be used to fund the creation of Open Source alternatives to your own closed proprietary shite. By the same token, if you're too proud to search the Internet to find a solution to your problems, you can pay for it in money.

                  The Community generally wants to help. However, if you don't play by the rules of The Community, expect a big, fat "SCREW YOU!" Why should it be any other way?
                  [ Parent ]
    • by TheRaven64 (641858) on Wednesday October 04 2006, @08:09PM (#16315151) Homepage Journal
      The depends on excellent documentation which isn't enforced in the open source community.

      That depends on the project. In OpenBSD, for example, you are not allowed to commit any code without also committing a corresponding update to the documentation (and your code must be commented according to the OpenBSD KNF guidelines; see man style for more information). Other projects have less strict commit rules.

      [ Parent ]
    • by MouseR (3264) on Wednesday October 04 2006, @11:28PM (#16316933) Homepage
      Why are commercial ports of OSS software so expensive [...] ?

      well, it's takes a lot of beer to get customers to buy free stuff.
      [ Parent ]
      • by djcinsb (169909) on Wednesday October 04 2006, @07:05PM (#16314519) Homepage
        The $140 (for XP Pro) is the cost of the OS without other software. Red Hat comes with a compiler suite and a lot of other useful items, so the direct comparison of the costs of the packages is not really a valid measure.
        [ Parent ]
            • Why not GPL version? (Score:4, Insightful)

              by CustomDesigned (250089) on Wednesday October 04 2006, @08:25PM (#16315317) Homepage Journal
              Because a key requirement was commercial support == you call someone to fix bugs for you, not fix them your self. I think the main problem was not shopping around for the required support.
              [ Parent ]
              • Re:Why not GPL version? (Score:5, Insightful)

                by Mr. Jaggers (167308) <jaggerz@gma[ ]com ['il.' in gap]> on Wednesday October 04 2006, @11:39PM (#16317021) Homepage
                Agreed. The vendor is not always the best support provider. For example, one of the reasons that microsoft is so successful in providing "support" is that they have so many "certified" solution providers. Commercial software houses that try to rely on microsoft for software dev support (in my experience) end up sorely disappointed. Being able to contract out the support/bug fixing in a bid process can bring better prices. There's not reason that a third party couldn't provide adequate development support for an open source product.

                The OP also seemed to be rolling all of support in the enterprise into the same support goal; like why waste money at all on vendor support for the dev workstations? That's ludicrous. You know they'll eventually need an IT person to maintain their windows workstations, even if microsoft is providing security patches. That person can do desktop support, and if they are competent, likely get better results faster than a commercial support vendor.

                It sounds to me that the problem for this startup was more an issue of lack of leadership at the executive level with strong personal experience in open source embedded development. From the pricing, I'm pretty sure I know which RT linux vendor they went with, and if so, "reputable" was likely not evaluated from a developer standpoint. I would probably say that the "not want to spend time for any OSS bug fixing" attitude is the problem. I'd rather a platform with *all* the code PLUS noncommercial support any day over code+commercial support, or (worse) just the support. It's making a big assumption that somehow the commercial product is going to come bug free and that support is going to snap a patch out to you by the end of the week (or sooner).

                I would say a shop running less than 10 devs is probably not going to get that level of attention from a commercial vendor, but who knows? Maybe they will. I'm sure that the OP will come back in six months and tell us all about how csharp, visual studio, and windows ce saved the day. ROI! TCO! Rah rah rah!
                [ Parent ]
            • Re:He required support (Score:5, Informative)

              by killjoe (766577) on Wednesday October 04 2006, @10:02PM (#16316245)
              So is it your point that no human being can ever buy support for any other open source toolkit other then QT?

              He says that QT costs too much so we goes to VS for around 700 dollars. Does that 700 dollars include support? No it does not. He just threw that out because he is a troll. He is comparing the cost of QT + support to VS without support and picking a solution that only works on windows. C# + GTK is available for free from mono which he also completely ignores.

              The guy decides to drop QT because it costs more and moves to C# without once considering java with swing or swt or anything else? He never considers Mono and goes directly to paying for VS while not buying support from MS.

              The guy is either an idiot, shill, astro turfer or a troll.

              [ Parent ]
              • Re:He required support (Score:5, Insightful)

                by Tim C (15259) on Thursday October 05 2006, @02:03AM (#16317721)
                Does that 700 dollars include support? No it does not.

                Actually, yes it does: [microsoft.com]

                Depending on product and how it is purchased, you may be eligible for two support incidents at no-charge. These incidents apply to Full Packaged Products only and broadly speaking the following groups of products are covered - consumer products, desktop applications, desktop operating systems and developer tools.

                Also, while at $700 he wasn't talking about an MSDN subscription, were he to go with that instead the following would apply:

                No-charge Support Incidents as a Program Benefit or Microsoft License Type
                Click on the appropriate link to find out whether you are entitled to no-charge telephone or online support incidents if:

                        * You have a Multi Year Open license or an Open Subscription licence
                        * You are a member of the MSDN Programme
                        * You are a member of TechNet Programme
                        * You are a Microsoft Registered Partner
                        * You are a member of the Microsoft Certified Partner Programme

                (Note that I can't be bothered to reconstruct the links)

                So no, you don't get as much support (I assume - I actually don't know what TrollTech's support is like), but it's incorrect to say that you don't get any, even if you just buy VS.NET. (And any company serious about developing with/for MS products ought to buy at least one MSDN subscription, if only for the support...)

                On top of that, community support resources for MS are at least as plentiful as those of the OSS community. Programmers working with MS tech are not fundamentally any different from those of us working with Java, or with OSS tools; we're all human, and most of us are more than happy to help out a fellow programmer in need from time to time.
                [ Parent ]
  • Commercial versions vs. "based on" (Score:5, Insightful)

    by Southpaw018 (793465) * on Wednesday October 04 2006, @06:06PM (#16313657) Homepage Journal
    Let's draw an extremely fine line here: commercial parts/versions of OSS products, and products built on OSS.

    Commercial versions of OSS products aren't worth it, anywhere, almost ever. Just look at the prices above. In almost every case, go with the closed soruce version, and you'll save yourself a hell of a lot of money.

    Now, look at two highly successful products built on open source: Fonality PBX (Asterisk) and Barracuda Spam firewall (Spamassassin). We use 'em both. I'm our entire IT department - just me. I already have too much on my plate, and when we were in the market for a new antispam solution, the natural pick was a Linux-Exim-Spamassassin/RBL frontend to our Exchange 2003 server. Powerful, effective, free (aside from hardware).
    Problem: I'm already working tons of overtime - do we pay a contractor $120/hour to come in and try to set a system up, then rely on me to support it when I already don't have time? Or, do we pay a company like Barracuda Networks $1300 for their itty bitty model of the spam firewall and get a system that's guaranteed, backed up by all the time they've spent developing their hardware and frontends, 24/7 support, automatic updates, and license-free monitoring and filtering? I don't have the numbers with me, but the cost in staff + contractor time + hardware vs. the Barracuda system (which is overkill for our little network) was something like 3:1.
      • Re:Commercial versions vs. "based on" (Score:5, Interesting)

        by Pharmboy (216950) on Wednesday October 04 2006, @07:33PM (#16314839) Homepage Journal
        Another reason it makes sense is that you can strip a box down for one task, like a web server or mail server, and reduce the amount of maintenance on that box much easier with FOSS, due to the reasons you state. This is difficult with MS, but very easy with Linux or BSD. Adding other features is pretty easy later on if you want. It is the flexibility that makes FOSS so popular on the server side.

        Need a domain server? I can take a spare box, install a base Fedora and bind in about 20 minutes. Or add bind to an underutilized server in about 2 minutes. MS just can't compare when it comes to small to mid size business servers. FOSS installs faster, has fewer issues when hardening, and in general is easier to secure, particularly when we are talking about using only one or two services. (block every damn port but 53 and move ssh to an unused high port and open that one up.)

        On the desktop, however, it has been another issue. I can't even get my USB wireless ethernet cards to work in Linux, and there are virtually no apps for small to midsized businesses. Most of the solutions that I have looked at on Linux cost about 20 to 50 times more than similar products on Windows (yes, really 20 to 50 times more) so we can't AFFORD to move to "free" software on the desktop yet. I know this will change, but I was convinced 10 years ago that it would have changed within 10 years....
        [ Parent ]
          • Re:Commercial versions vs. "based on" (Score:5, Interesting)

            by skiflyer (716312) on Wednesday October 04 2006, @08:23PM (#16315291)
            Like what? I am not being a smartass, I am truly curious what you business folks need.

            I run a small business... so let me answer your question, but I disagree with the grandparent, so I'll also include some answers, though he's right that there are big gaps.
            • Accounting: GnuCash is good, I can't use it because my accountant doesn't support it.
            • Some kind of basic organization ala MS Project... dunno personally, but MSProject sucks too.
            • Visio equivalent... dunno
            • Defect tracking: Bugzilla
            • Source Control: SVN Obliterates some of the 6 figure competitors IMHO
            • Email: Thunderbird
            • Contact management: Yes, we have choices, but the propertiary ones are better IMHO
            • Inventory: Dunno, can't say the commercial ones are any good either, guess that's why I'm writing one right now
            • Scheduler... sorry Sunbird & the like aren't up to part yet... still gotta give Evolution an install, but I'm busy
            • Backup solutions: OSS is way ahead of the commercial ones here IMHO
            • Databases: PostgreSQL is a winner for me
            • An OS that supports my eight monitor setup easily, stuck on windows
            • Remoting software: Putty is the best CLI one I've ever seen, TightVNC is good for most of my stuff, but I prefer to use RemoteDesktop when appropriate (when I can lock the screen.. yes I know rdesktop is great, not a server tho)
            • Internal chat network: OSS slaughters propertiary
            List goes on and on I imagine, every small business needs something a little different, that's why the economy loves us so much, we put a huge percentage of our income back into operating costs. But, as you might have determined from my disjointed comments, my customers love me because I employ the best tool for the job philosophy... I ask two questions, and in this order: Can it do the job well? What's it cost? Often OSS is better, often it's not.
            [ Parent ]
            • Re:Commercial versions vs. "based on" (Score:5, Interesting)

              by Pharmboy (216950) on Wednesday October 04 2006, @08:54PM (#16315591) Homepage Journal
              I think I am talking about something very different than you. To me, our business is a small to mid size biz. We do $10 mil a year, and generate close to 100,000 purchase orders, invoices and to a lesser degree quotes, per year. With 15 people. GnuCash can't do that. And yes, the accountant doesn't support it anyway.

              We are not a technology company, we sell stuff. Our software needs are about inventory, manufacturing, distribution, wholesale, retail, ecommerce, and include 3 basic product catagories, 5 different price levels, 2 methods of sales, 3 locations, importing products from different countries, UPS, FedEx, LTL trucking, dedicated trucking, tracking, dropshipping, contract manufacturing, marketing, and a lot of other things that most companies with 15 people don't do. I have been here 13 years, and no one does it like us. Then again, most of the companies in my industry from 13 years ago are now out of business.

              We are stuck in the middle and have unique needs, which is why I have spent the last several years kludging stuff together with Perl and doing most things with my 2nd or 3rd choice of methods. We are not a traditional small business, but we are not a full blown enterprise, and there is a complete dirth of products available for companies like us, both on the WinTel platform, but particularly in the FOSS arena, because there are not many companies like us to write for.

              We dont use schedulers or calenders, source control, chat networks, bug tracking, etc. Not every Slashdotter works for a tech company. Some of us sell the stuff you guys buy with your extra money. I dual boot linux and MS so I can game and get work done. On the server side, we have used Linux for many years (think RH 5.x), including samba, bind, apache, etc. but for the heavy apps, they just simply do not exist for mid sized companies. Yet.
              [ Parent ]
          • Re:Commercial versions vs. "based on" (Score:4, Informative)

            by Pharmboy (216950) on Wednesday October 04 2006, @08:24PM (#16315299) Homepage Journal
            Inventory management, purchase order, customer record keeping, invoicing, for a company that needs more than 5 seats, but less than 50. Very few users accessing, but ungodly amount of records added daily. 30k+ P.O.s per year alone. (We have very efficient employees) Most software available on FOSS is for individuals, or large corps are writting their own, or you go SAP, etc. and end up paying $100k for a complete solution when you only have 15 people accessing the data. AND it wouldn't do what my current software does, so I would have to pay a programmer to modify stuff.

            Or I can buy cheap Dell computers and about $1000 to $3000 worth of Sage/Peachtree products which suck but get the job done. I even have to pay more for Dell's without Windows. It was a most frustrating time, and no matter how much I wanted to migrate completely over to FOSS, it is pointless if it costs more and does less.

            We still use Linux on all servers, and when the market has products that are cost effective and work for us, we will migrate, but it doesn't look like it will happen soon. I have talked to several people at companies that make software we DO like, and they say they will never port over to Linux. Ever.
            [ Parent ]
  • Some Theories... (Score:4, Insightful)

    by pen (7191) <slashdot3@digdug.cx> on Wednesday October 04 2006, @06:06PM (#16313659)

    Three reasons come to mind:

    • Quality and reliability: These products may cost you less in the long run. I couldn't begin to say how many hours I've wasted tracking down stupid issues in every Microsoft environment I've ever used, from Visual Basic 3 to today's Visual Studio.NET
    • Support: I would guess that most of these licenses come with some kind of support contract.
    • Relative obscurity: If you have hundreds of thousands of customers, you can afford to spread the load between them. When you only have a few thousands, you need more money per customer to support the same level of development.

    Of course, these are all hypothetical and general. YMMV.

    • Re:Some Theories... (Score:5, Interesting)

      by dedazo (737510) on Wednesday October 04 2006, @06:24PM (#16313907) Journal
      If you have hundreds of thousands of customers, you can afford to spread the load between them. When you only have a few thousands, you need more money per customer to support the same level of development.

      Which would mean that all software begins life as insanely expensive and then comes down in price? My experience sez that's not the case.

      Quality and reliability

      Yeah, I've never had to track down stupid issues in open source software. Never!

      Support

      Since the common wisdom seems to be that Microsoft charges a lot of money for nothing and it's super-easy to replace "propietary" software with FLOSS equivalents (MySQL vs. Oracle, GiMP vs. Photoshop, etc) I'd say that's about the only thing you could conceivably be charging for, other than packaging and/or integration. So I suppose the issue here is really "why are support contracts so expensive?" rather than "why is the software so expensive?".

      Either way, my (relatively limited) experience with FLOSS vendors is that they tend to be a bit arrogant in the sense that they'll tell you that whatever you're using right now is "shit" and they have the solution to all of mankind's problems (including yours), and then they have absolutely no idea how to create things like tiered pricings and segment/volume discounts for different types of customers. That's something commercial software vendors do very well. The commercial ones will also tell you that they'll get you off the "shit", but then they can walk the walk. FLOSS vendors seem to be all talk.

      In our case we ended up going without a support contract (insanely expensive) and hired a guy that was an expert with the software. He did all the customization work we needed for about a year and he made a good $50K with virtually guaranteed future contract work. The "vendor" (if one can call them that) ended up losing out to the hacker kid in mom's basement - literally.

      [ Parent ]
            • Re:Some Theories... (Score:4, Insightful)

              by Sancho (17056) on Wednesday October 04 2006, @07:11PM (#16314583) Homepage
              Indeed. That was my (poorly illustrated) point. If I was paying for support, it would be someone else's problem. Failure to support that hardware device which the webpage claims is supported would probably be breach of contract. With OSS, I'm just screwed if I'm unable to fix it and no one else is willing to.

              Granted, with closed source software, there are far fewer people capable of fixing it, but if you've paid for the software and it doesn't work, I feel like you should be able to demand that the manufacturer fix it. At least there should be some entitlement there, whereas with OSS, there is none.
              [ Parent ]
                  • Re:Some Theories... (Score:4, Interesting)

                    by swillden (191260) * <shawn-sd@willden.org> on Wednesday October 04 2006, @07:36PM (#16314873) Homepage Journal
                    I see. Yeah, I'm sure it's easier to buy a new NIC or whatever than fight with the one that's broken. Until manufacturers care about drivers for OSS operating systems, that's going to be an issue. On which subject, by the by, I have a nice anecdote: When I got my IBM Thinkpad T40, with an Intel WiFi chip, there was a problem with the WiFi driver. A small percentage of packets were being corrupted. I sent an e-mail to the driver project mailing list and in less than an hour the driver developer at Intel sent me a patch to test. When manufacturers do care, support for OSS can be very good, indeed.
                    [ Parent ]
            • Re:Some Theories... (Score:5, Informative)

              by swillden (191260) * <shawn-sd@willden.org> on Wednesday October 04 2006, @07:19PM (#16314685) Homepage Journal

              If he did submit a bug and has an open case with Microsoft for it, it is free. Bugs, hotfixes and licensing cases are (and always have been) free.

              Admittedly it's been a few years since I dealt much with MS software, but back around 2000 or so, I found some bugs in VC++ and it cost us $199 per incident to report them. I guess they called it "support" because an MS engineer looked at the problem for a while before deciding it was a bug, but it still seemed like paying money to report bugs to me.

              [ Parent ]
  • Support (Score:5, Informative)

    by radish (98371) on Wednesday October 04 2006, @06:14PM (#16313775) Homepage
    But you say you want support, that's why you're paying. Hate to break it to you, but an OEM license of XP doesn't buy you any useful support. Neither does a $700 VS license. Microsoft, like everyone else, charges for support contracts.
    • Actually, ya it does (Score:5, Interesting)

      by Sycraft-fu (314770) on Wednesday October 04 2006, @06:42PM (#16314181)
      What a Windows license buys you in terms of support is two major things:

      1) Patches. MS releases patches for Windows and everything associated with it, and tests those patches to make sure they work. If an incompatibility is found (it's rare one survives the initial testing) it gets fixed. Now of course there is OSS that does that, but there's no guarantee. With MS it's not really a question of if the software will be patched during it's supported life. Same deal with supported OSS software like RHEL. Sure, Fedora also does patches, but they aren't tested like the RHEL ones are, and if the developers of the component don't release a patch, they aren't likely to patch it for them.

      2) The knowledge base. MS has a massive knowledge base that is really very good. I use it all the time at work. When a Windows system bluescreens do I start a debugger? Hell no, I'm not a programmer. I write down the details and look it up in the knowledge base. The answers tend to be just want I needed. If some weird problems comes up, again I go looking in the knowledge base. It is a central, easy to search, repository of solutions tested by MS themselves. You don't get that with a no-charge OSS product. Sure there are news group posts, and IRC logs and such out there but man, tracking down the answer can be hell, if anyone has found an answer at all.

      3) Vendor support. When a vendor sells you a system with Windows, they are guaranteeing hardware support (at least if they aren't shady). When Gateway sells me a rackmount server with Windows installed, I know that it will be working, and I know that it will have drivers for all it's hardware. However when I try and install FC4 on it, maybe it doesn't work. In fact what does happen is it kernel panics on install (we still have never figured out why). Should it not work, I can call them and get it fixed, if it's a Windows problem they'll call MS and get it fixed. You can get the same thing with Linux, but only buying a system with a supported Linux distro on it, which is usually an enterprise Linux.

      Those are not at all worthless support resources. Support doesn't necessarily mean holding your hand through configuration, it just means ensuring that all the resources you need are available. You get that with commercial solutions, be they OSS based or not. It's not the same as a support contract, but often is what people need.
      [ Parent ]
      • Re:Actually, ya it does (Score:4, Interesting)

        by killmenow (184444) on Thursday October 05 2006, @12:04AM (#16317139) Homepage
        MS releases patches for Windows and everything associated with it, and tests those patches to make sure they work.
        For varying definitions of the word "work".

        I'm not joking and I'm not sure what you're smoking. Rarely, if ever, are production boxes patched with Microsoft patches without some due diligence. Best practices dictate patching test boxes first to see what the patches break before patching production boxes...because -- consistently -- Microsoft patches break existing software. I cannot stress this enough: Microsoft patches break shit all the time. Right now, I'm dealing with a situation where the latest 2003 service pack wreaks havoc on Terminal Services and causes some of the wierdest crap I've ever seen happen on a system (completely hosing opening shortcuts to URLs in IE [their own software, I might add])...and Microsoft's answer? "Uninstall that last service pack." Yeah, they test their patches to make sure they work, as in, they fix the bug they were patching. But they do a shit job of testing what the patches break.
        [ Parent ]
          • Re:Support (Score:5, Informative)

            by swillden (191260) * <shawn-sd@willden.org> on Wednesday October 04 2006, @07:09PM (#16314553) Homepage Journal

            The only way that they can charge more for the "commercial" version AND enforce their right to limit how you use the software is for them to build a completely proprietary project that runs on Linux, then they can license their complete, compiled (with or without source), and wholy owned product however they chose, but if they choose to license under the GPL then they cannot impose the use restrictions.

            Nonsense.

            Qt is licensed under two licenses: The GPL and Trolltech's commercial development license.

            If you use the GPL version, which you acquire from wherever you like, then your application must also be licensed under the GPL, or you have no legal right to distributed it. Technically, you had no legal right to create it, except by accepting the terms of the GPL, because your application is a derived work and creation of derived works is reserved to the copyright holder.

            If you buy the commercial license, you can sell your software as closed source, and you can redistribute the run-time files that Trolltech provides you, or that you build from the copy of the code that Trolltech provides you.

            Code which was originally written under the GPL is not eligible for integration into a work under the commercial license. Not because Trolltech is adding requirements to the GPL, but because Trolltech's commercial license excludes such software from being linked to and distributed with their commercial version of Qt. You can't do it under the commercial license, and you obviously can't do it under the GPL.

            There's no weird copyright theory here, just a couple of different licenses.

            In practice, of course, lots of people start commercial Qt projects prior to purchasing development licenses. I've never heard of Trolltech making any attempt at all to curb this, beyond simply saying that it's not permitted.

            [ Parent ]
  • It's the support costs. (Score:5, Informative)

    by SarekOfVulcan (133772) on Wednesday October 04 2006, @06:15PM (#16313787) Homepage