The Economics of Open-Source Software

The problem with open source is that the only good customers are the Fortune-500-type companies, and they all have an internal IT department. If you are a dollar cheaper and a day faster than the internal IT department of these various companies you have a potential market in the billions of dollars. If your costs go up to the customer by $2 so that you’re now a dollar more expensive, and your delivery time goes up by two days so that you are now a day later than they could get it done internally, your potential market goes to zero. You go from potentially billions of dollars, because they can save a little money and a little time — there are a lot of big companies out there — to a product that nobody wants.

— Philp Greenspun, ITconversations

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