An Alternate Software Industry

Making Profits

There's no harm in wanting to make a living from the software industry. But there's plenty of reasons to examine how you're making your living. It's my belief that many of current ways of making a living are based upon witholding useful tools and retarding progress in order to reap profits.

Profit Through Copyright

The way the current software industry is structured, the "accepted" method of making money is to write some software, and then use copyright law to restrict people from making copies of the software, or derivative works. You then make profit by charging well above cost to copy the software, and charging for future versions and upgrades. If people try to make their own copies or fix their own problems, you sue.

There are a few problems with this method of making money.

It relies on depriving people of tools they could otherwise use. The cost of copying the software is negligible, yet this is the primary service that a "traditional" software business offers. The only thing stopping many millions of people from benefitting from the software is the need for the authors to make a profit. This seems all wrong, we're charging people for something with negligible cost, and at the same time depriving people of something they could use.
It charges a fee to people to fix problems that many people could fix for themselves, if legally allowed. This means that you are once again restricting the benefit people can have from your program, in order to profit.
It forces all newcomers to start from scratch. Everybody re-invents the wheel.
The product isn't as good as it could be, because even the largest corporations have to budget their resources. Rather than make the best products, you have full control over something that's inferior.

So what are the results of these problems?

Progress is stifled. When everyone has to re-invent the wheel, when the tools people can use is limited by their finances and the "right" for others to make profits, rather than the technology available, things progress more slowly.
Programmers are bored. Re-inventing wheels isn't much fun. Bored programmers don't work as hard. Bored programmers don't care much about quality. Bored programmers look for other jobs.
Software that is produced is more expensive than it should be. People pay over and over again for the same sort of code to be designed, developed, tested, and released.
Quality is lower. Bugs are only fixed if it's considered cost effective. Users with technical skills, who could easily fix things, are forced to wait for an upgrade. Users without technical skills are forced to wait longer for upgrades than necessary.

Why not let everyone benefit from software and charge people for the services we provide that cost money to provide, or charge for real value?

I outline here a few ideas for ways to make money while still allowing people to benefit from the software.

Distribution

Just because people can copy the software, doesn't mean you can't sell it. Freely redistributable software is already sold for profit, simply because the people who sell it are taking advantage of economies of scale and access to equipment that isn't readily available.

When you buy a piece of proprietry software from a shop, you get an attractive box, the media, some manuals, the convenience of not having to download the software, a full copy of the software on hand for use whenever you need it, the advice of the storeperson, and the range to choose from in the store. So you can make profit by providing all these services, without stopping people from redistributing the software.

Indeed, since you have the "official" distribution, you can put it together in a nice package that you can sell to the re-sellers, including the necessary data files to typeset the documentation, box design, mastered CDs, etc. For them, this may be a lot easier than putting it all together themselves.

To further the sales of your media, you can offer extras (such as large graphics files, digital tutorial videos, etc) that would be prohibitively expensive for people to download, but can be easily included in your distribution.

Support

When shown a useful, but non-proprietry software solution, many companies would like to use it, but need someone to support the package, like many proprietry packages are supported. They need custom changes, enhancements, bug fixes, ports to new platforms, etc, to be available. The contracts for such support can be very lucrative - the company can get a lot of value from of the software, particularly if it is tailored to their needs. This can range from providing consultants, to 24 hour help hotlines.

You might set up a software workshop, that will perform custom modifications on software. Any modifications you perform can be incorportated into new versions for everyone else, which futher increase the usefulness of the software and therefore your market for future modifications and support contracts.

Creating a new software package can simply be thought of as an initial investment in your software workshop, to help create demand, and create an area where you have particular expertise.

Training

Most software needs it's users to be trained in how to use it. If you have the expertise with the software, you can provide the training that companies need.

Also, even if a company is planning on modifying the software in-house, their developers can support and training from those who know the software well. (You should encourage them to feed their developments back up to you, so that you can jointly benefit from the effort).

Companies may also need rollout plans and advice on configuration, which they will be quite willing to plan on.

Packaging and Preconfiguring

Sometimes companies need sytems that they can turn on, and will automatically start doing their job (turnkey systems). They are willing to pay whatever value the system has to them, and they're not really interested in modifying the system of customizing in advance.

If you produced such systems with proprietry software, you'd be hard pressed to customize the systems sufficiently to meet all requirements, and the cost of the software licenses will squeeze your profit margins. If you're in a small market, you might not be able to have your voice heard enough to have bugs fixed for you by a proprietry vendor, rendering any choices a real gamble.

If you're a vendor, you can profit from doing modifications for system packagers.

Provide Online Services

If you provide online content, games, news, banking, or some other service for which you charge a usage fee, or simply cover with advertising, there's absolutely no reason to try to make the clients you provide proprietry. It works against people using your services.

If people can't copy the client for their friend, their friend probably won't use your service (they'll certainly compare it against your competitors first).
If people can't modify your client to customize it for their environment, it won't be included in larger packages, and it won't have as large usage base.
If people can't see your security code, they won't have any confidence that it's truly secure (as opposed to being just "secret" which is only secure for as long as the secret is kept).

What you may want to do is provide "official" channels for obtaining the code, so people can be reasonably sure they are getting the client from a reputable source. And you can, of course, still make money from packaging the client

Conclusions

I'd admit, making profit may not be as simple in the alternate model than it is just making money from being the only one allowed to make copies. But only a mediocre resturant relies on banning people from cooking at home to drum up more business.

If you're good at what you do, there's little reason why you wouldn't be able to command a high price for providing services such as support, training, consultants, advice, modifications, customization and distribution.

If all you're good at is copying disks, sooner or later someone or something is going to come and take all the profit out of that for you. It could be another vendor dumping products to establish market share, it could be an established free software product that eclipses your offering.