Protectionism in the software market

No other market is quite like software. General Motors isn't forced to contend with a "free car" movement, which has a goal of undermining sales-based automakers. Dell isn't faced with a grass roots PC hardware movement, which says PCs should be free--and then hands out samples at no cost.

Of course, software is unique as its production relies purely on the mind. Even if a renegade group wanted to offer free cars, it would not be feasible as long as raw materials carry a cost. In software, all it takes to challenge established proprietary software vendors is to convince enough developers to donate their time, or more specifically, their brainpower.

Free software, however, is only a problem if you hope to sell software. Free certainly doesn't cause complaints among consumers, although it might lead to fewer choices due to fewer competitors entering the market (profits attract competition). Retailers such as Wal-Mart can benefit if consumers flock to products made cheaper through the use of open source software.

Even developers can benefit, as there is ample room for custom software, which fills the gap between general-purpose open source product and tailored software designed for a particular business (often of the proprietary sort which generates revenue as long as it doesn't grow big enough to attract the attention of free software developers).

These good things, however, in no way justify forcing people to use open source products. I have no problem with companies that choose to use open-source software. I also have no problem with governments that choose it. I have a very big problem with groups that try to force governments to favor open source software exclusively.

Mandating that governments only procure open source software would be a form of government protection, allowing open source to avoid competition from proprietary alternatives. The irony is rich indeed when proponents of open source decry on one hand a "monopoly" whose dominance is built entirely on consumer choice, and on the other promote a government-protected one of the sort Adam Smith explicitly warned against.

I think Tim O'Reilly put it best when he said, in a recent weblog: "...any victory for open source achieved through deprivation of the user's right to choose would indeed be a betrayal of the principles that free software and open source have stood for."

Some say that the "Digital Software Security Act," as the California proposal is disingenuously called, isn't true protection. Proprietary companies just have to open their source code in order to compete for government contracts. Well, America just has to stop growing GM (Genetically Modified) food to gain access to European markets, even though all scientific evidence indicates that GM food is not harmful.

E-Commerce sites in the US just have to adhere to European VAT rules to be allowed to sell to Europeans. Europeans just have to buy struggling American steel companies to avoid getting hit by George W's recent steel tariffs.

In other words, the fact that companies can alter their business structure in order to get around a "non-trade" barrier doesn't make it any less of a trade barrier. There are a number of important reasons why proprietary software companies might not want to open their source code, chief among them that revenue models based around the sale of an open source product aren't exactly known for their profits. The trade barrier, in this case, operates through the fact that most companies currently making proprietary software would sooner replace their executive team with orangutans than discard a revenue model with a proven track record.

Of course, who says anyone should care about the plight of proprietary software companies? Open source code is free, and that's a good thing as stated at the beginning of this article. Why shouldn't government get the most bang for its buck from our tax dollars?

If you accept that argument, however, you are trapped in a logical conundrum. If you truly believe that government should get the most bang for its buck, then you must reject a policy that would prevent the government from doing a proper cost-benefit analysis to determine what, truly, provides the most bang for the buck.

As I mentioned in a past article, good ideas aren't the exclusive domain of open source programmers. What if a particular government agency would benefit the most from standardizing on Oracle databases? Perhaps its personnel are trained on Oracle, or Oracle developers are easier to find than MySQL developers. Perhaps Oracle works better with existing systems, or other products in the marketplace. Perhaps there are more development tools available, or more add-on software that the agency finds useful. Perhaps, horror of horrors, Oracle is just BETTER than the open source alternative, at least with respect to the features that matter to the agency in question.

All that MIGHT just add up to making Oracle worth the money some government agency spends on it. A policy that mandates that government not be allowed to make that calculation is a policy that will result in less efficient usage of tax dollars, as government is forced to favor an open source option even if, in the aggregate, a proprietary solution was more cost effective.

Over time, things can only get worse. Protectionism impoverishes a country, which is why nations around the world are busy opening their markets to foreign competition. What applies at the macroeconomic level applies at the microeconomic level. Protectionism won't help the progress of open source any more than it boosts the efficiency of protected industries in Chile (or steel companies in the United States).

Open source is supposed to be about freedom. Unfortunately, certain advocates have lost sight of that goal. People should be free to use software which best fits their needs, whether or not it adheres to a particular programming philosophy. I suggest that open source proponents spend their time crafting interoperability guidelines rather than creating a protected environment, which artificially boosts open-source adoption while hiding it from the full rigors of competition.

John Carroll is a software engineer who lives in Switzerland. He specializes in the design and development of distributed systems using Java and .Net. Tell him what you think of his ideas through Talk Back

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