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Bursting the proprietary-software bubble
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| In any free market, the price of a commodity, over time, falls close to that
| of its marginal cost of production. A number of things can interfere with
| this process, the most damaging being the existence of a monopoly, but in the
| absence of market distortion this rule always holds true.
|
| And what is the marginal cost of production of software? The marginal cost of
| any product is the cost of making the next copy.
|
| If you stop for a moment and consider it, you'll see the cost of making the
| next copy of any piece of software is almost zero--with perhaps a vanishingly
| small amount for electricity.
|
| That phenomenon is precisely the same as the one challenging the business
| models of the music and film industries. The equilibrium, free-market price
| of software is nothing.
|
| A matter of survival
|
| Free software acknowledges that truth. Proprietary software does not.
| Instead, like the banks, proprietary-software vendors have had to justify the
| cost of their wares by constructing complex arguments about value.
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http://www.zdnetasia.com/insight/software/0,39044822,62048114,00.htm?scid=rss_z_eti
"R&D..."
"Patents..."
"INNOVA~1..."
All bubbles...
Recent:
The Patent Bubble... Still Growing
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| The brainchild of former Microsoft CTO, Nathan Myrhvold, Intellectual
| Ventures has reportedly amassed $5 billion in capital and a portfolio of over
| 20,000 acquired patents -- and it's looking for more. From the perspective of
| the tech sector, Intellectual Ventures combines two questionable business
| models, the patent troll and the pyramid scheme, in a form that evokes Wall
| St.'s cleverness in designing glitzy vehicles for esoteric assets.
|
| IV does not create or market products, so it is invulnerable to the patents
| of others. It looks like a patent troll, because it makes money from "being
| infringed." But IV has a new twist: The companies that settle not only pay
| license fees but are induced to invest in IV, thereby providing the capital
| to acquire more patents, set up new licensing funds, and pursue other
| companies.
|
| [...]
|
| There you have it: Arbitrage in exotic assets. A system that values legal
| instruments over real products. And a context-dependent and uncertain value
| for the legal instrument itself. No better than mortgage-backed derivatives.
| And maybe a lot worse.
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http://www.huffingtonpost.com/brian-kahin/the-patent-bubble-still-g_b_129232.html
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