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Standing on the shoulders of giants

Geoff Riley

25th September 2008

It strikes me that we have probably already reached a critical mass for a wide and ever-growing range of open source software products. The BBC’s iPlayer is now cross-platform. Google is based almost entirely on open source software. And Specsavers, one of Britain’s largest private companies with a network of over 1,000 stores (growing at two a week) has built its entire infrastructure on open source. What is true for Specsavers also holds for Pepsi Co and Pixar. Mozilla Firefox, Linux, Moodle and Apache web servers have come of age and are sympotmatic of an age of collaborration and rapid innovation within the open source community.

Mark’s talk was geared to an incredibly knowledgeable and enthusiastic audience of teenage computer experts! Little did they know that they were learning a lot of economics along the way. Questions considered included the following.

The incentives to use open source rather than proprietory systems - users face a classic economic choice - factoring in variables such as speed reliability, security, richness of features, meeting industry standards, speed of product development, cost of customer support and overall price! If you download Mozilla Firefox and then it becomes your web broswer of choice, you have effectively undertaken a cost-benefit analysis.

The economic rationale of firms devolving their research projects to open source coders

The impact of the recession on the market demand for open source and proprietory products - especially given the huge squeeze on corporate IT budgets. An economic slump is likely to provide another huge fillip for the open source industry.

The commoditisation of computer hardware as prices have collapsed (if a bit breaks, throw it away and replace it) and a similar process underway in most software markets with the possible exception of computer games

The marginal cost of producing one extra copy of a new software product - close to zero in a weightless economy!

The knowledge spillover effects that result from collaborrative work - Wikinomics is a great read in this respect

Traditional software licences are effectively a form of rental payment for the use of the software and the intellectual property built into it. But with hardware prices collapsing - a new lightwight computer can cost as little as £200 - adding a standard operating system could add 50% to the price, the incentives to do this are slipping away.

Further background on open source is available from the Open Source Consortium

I really enjoyed this talk, Mark Taylor is a gifted communicator and superb at handling questions from his eager audience. Many of the questions were tough nuts to crack - he did it really well. But quick memo to BECTA. Please accredit Moodle - not to do so is an act of crass stupidity.

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

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