Making Money by Giving Stuff Away

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Open source software is obviously extremely interesting to companies from a utilitarian viewpoint: it means they can reduce costs and – more significantly – decrease their dependence on single suppliers. But there's another reason why businesses should be following the evolution of this field: it offers important lessons about how the economics of a certain class of products is changing.

Free software licences recognise that it is dealing with a good that has vanishingly-small marginal cost; as classical economics teaches us, this means that the price for such goods tends to zero. This bold idea was accepted within the enterprise in a rather interesting way.

First, free software appeared among the hacker community, where price was irrelevant, since the culture was largely one of sharing.

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