Okay, I think I understand better now. There's only physically so much gold on the planet. Barring alchemy, we can't make more of it, so it has a natural scarcity.
From that, I gather that we can't use the traditional economics of Supply and Demand to allow a market to decide the value of software. Because the denominator in the equation demand divided by supply is infinite, essentially, it doesn't matter what value demand has in the numerator, because anything divided by infinity is zero.
But my initial impression of this model is that it is doomed to failure. It is doomed to failure, because the artificially scarce product being produced itself requires the consumption of naturally scarce products that are subject to the laws of supply and demand. The developers that produce the software for example need to eat, the need to live in a house, they need to consume energy to drive to work, etc...
So how do we find a balance? Do we find a new way to value software or will software just go away? Will software be relegated to a charitable organization like in the article you linked to, which was quite interesting by the way, so thanks for that. Will the only valuable software be that software which is paid for in advance to be developed at the risk of the consumer? "If you pay me, I'll build it, otherwise, I won't" sort of scenario?
It's like the software only has value if it doesn't exist. If the mechanism to produce the software exists only in the minds of a scarce few who can implement the solution or who have the ability to control access to it, perhaps through SaaS or some other monthly subscription mechanism like WoW or battle.net.
Perhaps we can value software based on how much additional revenue it helps you generate or how much savings it generates through optimizations or automations.
How are we going to strike that balance? Is the gold rush for software over? If there is no carrot, who will run those wheels and invest in our future? Who will take the time to solve the problems before the problems arise? Take Oracle vs. MySQL. Oracle has solved a lot of the problems MySQL has. Over time, as people contribute to the MySQL code base, those problems can be resolved, but consumers of MySQL have to wait for someone else to implement the solution, or they have to pay for a computer programmer to find a work around or implement some solution outside MySQL.
It feels like it will slow us down. Corporations like Oracle and Microsoft will survive a little while longer, but if MySQL ever actually does become as good as Oracle, then people will stop paying for Oracle. If people stop paying for Oracle, Oracle can't hire the best and the brightest.
Well, I appreciate the answer, I do understand better, but that just leaves me with more questions, so I'm thinking out loud.
All I can think of right now is that software will all move to aaS models or be embedded in physical devices so that we can attach a natural scarcity to them. There are only so many factories that can produce microchips. The article you linked to suggested selling plastic figurines with the software, which is a similar idea. It harkens back to the age of dongles.
Perhaps we can value software based on how much additional revenue it helps you generate or how much savings it generates through optimizations or automations.
My former company tried to do this. People balk at this. "Why should I pay when there's 'free?'"
From that, I gather that we can't use the traditional economics of Supply and Demand to allow a market to decide the value of software. Because the denominator in the equation demand divided by supply is infinite, essentially, it doesn't matter what value demand has in the numerator, because anything divided by infinity is zero.
But my initial impression of this model is that it is doomed to failure. It is doomed to failure, because the artificially scarce product being produced itself requires the consumption of naturally scarce products that are subject to the laws of supply and demand. The developers that produce the software for example need to eat, the need to live in a house, they need to consume energy to drive to work, etc...
So how do we find a balance? Do we find a new way to value software or will software just go away? Will software be relegated to a charitable organization like in the article you linked to, which was quite interesting by the way, so thanks for that. Will the only valuable software be that software which is paid for in advance to be developed at the risk of the consumer? "If you pay me, I'll build it, otherwise, I won't" sort of scenario?
It's like the software only has value if it doesn't exist. If the mechanism to produce the software exists only in the minds of a scarce few who can implement the solution or who have the ability to control access to it, perhaps through SaaS or some other monthly subscription mechanism like WoW or battle.net.
Perhaps we can value software based on how much additional revenue it helps you generate or how much savings it generates through optimizations or automations.
How are we going to strike that balance? Is the gold rush for software over? If there is no carrot, who will run those wheels and invest in our future? Who will take the time to solve the problems before the problems arise? Take Oracle vs. MySQL. Oracle has solved a lot of the problems MySQL has. Over time, as people contribute to the MySQL code base, those problems can be resolved, but consumers of MySQL have to wait for someone else to implement the solution, or they have to pay for a computer programmer to find a work around or implement some solution outside MySQL.
It feels like it will slow us down. Corporations like Oracle and Microsoft will survive a little while longer, but if MySQL ever actually does become as good as Oracle, then people will stop paying for Oracle. If people stop paying for Oracle, Oracle can't hire the best and the brightest.
Well, I appreciate the answer, I do understand better, but that just leaves me with more questions, so I'm thinking out loud.
All I can think of right now is that software will all move to aaS models or be embedded in physical devices so that we can attach a natural scarcity to them. There are only so many factories that can produce microchips. The article you linked to suggested selling plastic figurines with the software, which is a similar idea. It harkens back to the age of dongles.