Dan Griffin's Blog
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Software Licensing is Such a Cluster Fcuk
July 19, 2007
Although I’ve admittedly been away from the OSS game for a while (remember Slackware 1.1?), the advent of GPLv3 and the ruckus it’s visiting on some unwitting community-based software companies is irresistible. To wit, check out the following back-and-forth between Martin Roesch, founder of the open source Intrusion Detection X Snort, and various other contributors and licensees, including Alan Shimel of StillSecure.
After skimming that, read this, both because it’s witty and also because it’s a nice summary of the issues at play:
http://www.matasano.com/log/858/alan-shimel-should-stop-talking-about-snorts-licensing/.
I have to admit that I have had contempt for GPL, because it’s always said to me, of its contributors, "I can’t figure out how to make licensing profit from this software, but I don’t want to feel as though I’ve wasted my time, therefore I’ll make it public but try to prevent other potentially more clever people from profiting." Of course, people, clever or otherwise, are constantly seeking new and old ways to make money.
But, as observed in the Matasano post above - and this is something that I had not fully grasped until now - GPL has been an opportunity to build an intellectual property based business around community-developed software.
Okay - now for part two of this post - lest you think that non-community based software is being spared the licensing drama: eminent software business researcher and MIT professor Michael Cusumano has an article entitled "The Changing Labyrinth of Software Pricing" in the July 2007 Communications of the ACM (amazingly, there appears to be a link here - http://delivery.acm.org/10.1145/1280000/1272531/p19-cusumano.pdf?key1=1272531&key2=2761884811&coll=GUIDE&dl=&CFID=15151515&CFTOKEN=6184618).
Before reading the CACM article, I was under the impression that the software-as-a-service (SAS) licensing model - wherein applications are hosted, pricing is month-to-month, and if you stop paying then you no longer have access to the app - was slowly overcoming the perpetual license model (a la Microsoft Word; you pay for it once and you get to keep it). But no - Cusumano cites a recent study showing that "subscription pricing was actually declining, though vendors expected it to rise in the next several years."
Why is (was) subscription pricing declining? I don’t know; that finding is pretty surprising (although I haven’t read the study). Maybe IT purchasing managers just don’t understand it yet. Or, more likely, ISVs haven’t found the right formula.
The SAS model is actually attractive to me as a consumer. That said, I must admit that all of the software I currently use is based on the familiar one-time license fee pricing model. Would I go to a subscription model for Office (as long as I felt it was priced fairly)? Yes. Would I do so for development tools? Maybe not: one tends to want to have more control over upgrades to that type of tool, for compatibility reasons.
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