"Olson Johnson" <> wrote in message
news

Uf6b.4830$...
>
> "Patrick Bold" <> wrote in message
> news:3f58223a$...
> >
> > "IBM, perhaps better known for its hardware and software, has been a
> > leader in landing large-scale IT services contracts. Last year, it
> > garnered the highest number of IT infrastructure outsourcing deals
worth
> > $1 billion or more, according to research company Gartner."
> >
> > You're right, it's clearly in the interest of IBM to support
open-source
> > software alternatives to Microsoft. But only to the extent that
there is
> > a lucrative IBM service contract involved. Lots of little Linux
wannabes
> > are betting on IBM's strategy to pay off for them as well in the
form
> > of new business -- and that's fine. But masking one's ambitions in
this
> > regard as some kind of anti-monopoly crusade is pathetic -- at the
very
> > least you need a less conspicuous monopolist for a partner than IBM.
> >
> >
>
> How does this make IBM any different to any other bigcorp.
> They are all welcome to use free software.
> And how does this make IBM a monopolist in the context of free
software ?
Any company that is awarded an exclusive contract to service the
critical software applications that a business depends on has gained a
significant degree of monopolistic power in the bargain. Indeed, if you
read the history of IBM, you will discover that this is precisely the
economic fact that turned IBM from a contender into a giant in the first
place. Whether the software is proprietary in origin (as much of IBM's
software has been), licensed (like Windows) or free (like Linux), the
principle is the same -- knowledge about the BUSINESS being serviced is
much more valuable than knowledge about coding. Sure, anyone can look at
the pieces of OSS code that get written and stash them in their own
libraries if they wish -- but any developer who has ever actually rolled
out a substantial software project for a substantial business knows that
good code is just a small part of the puzzle that has to be solved.
Businesses know this when they negotiate a service contract -- next to
the bank, the software maintenance team you hire is likely to end up
knowing more about your business than most of your own managers, and so
the incentive is to pay a non-competitive, monopolistic premium to some
outfit you hope will get the job done for a long time to come.
>
> IBM will pay for good people to work on the kernel and journalling
file
> systems which is beneficial to me as a debian user, even though IBM
use Suse
> and Redhat.
Granted, there are some collateral benefits here for all OS users. No
doubt about it....
> Its definitely not a monopoply position.
.....but no, you're wrong about that. The exact term economists use to
describe the phenomenon is "monopolistic competition". Ideally, this
entails free entry into the software servicing market on the supply side
(expected globally to be worth $16.5 billion by 2005, according to
IDC) -- no Microsoft domination here, so any developer theoretically
stands an equal chance of getting their product adopted. But significant
enough differentiation of end products -- through quality of service,
reputation, or some other form of branding -- that end users are
sufficiently committed to one service provider or another to pay a
non-competitive, monopolistic premium.
>
> And if IBM helps the wider recognition and credibility of Linux, thats
good
> for other people who service Linux users too.
>
That appears to be the conviction of many small Linux developers. But
then you could also make a credible case that just the opposite is
true -- that IBM is in fact encouraging small developers to take on as
large a share of the risk of developing Linux into a credible product
as possible, with the expectation that many will fail and that the best
can simply be bought out at some point down the road (some small
developers would undoubtedly welcome this eventually as well, but that's
a different story). IBM's monopoly power here is unquestionable -- its
cash assets alone dwarf all competitors combined except for Microsoft --
and so it can afford to invest heavily in R&D that will place its
products at the cutting edge, to extract great economies of scale, and
to outbid competitors for the most lucrative business.