Microsoft aims to price itself into the open source market
A FAIR PRICE. What does that mean? If you ask most of us, abruptly, when we’re not expecting an economics exam, we’d say that a fair price is the cost of a good, plus a little on top for profit, writes DANNY O'BRIEN.
Ask an economist and they’ll tell you there’s no such thing: just a dot on a demand and supply chart. The fair price for a load of bread demands on how much bread is being made, and how badly you want bread.
But what’s a fair price for something that has no quantity and for which the demand is unclear? What’s the fair price for software? Right now, there doesn’t seem to be any consensus – even from a single supplier.
There’s some who would say that the fair price for software is approaching zero.
Open-source software, code freely written and freely distributed, has been doing an amazing job of inserting itself into markets where software had previously cost thousands.
But despite free software’s penetration into commercial markets, which has continued for over 10 years, Microsoft still profits even in a world where three of its key markets – operating systems, database servers and internet server and browser software – all compete with products produced by no company and distributed for no charge.
In some ways, that seems crazier than either of the two scenarios most pundits would have predicted a decade ago.
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