The Google way

Suppose I build a program, a database of drinks.
The software contains thousands of cocktail “recipes”, and one of the product’s innovative tricks is that you enter the liquor you have in your bar and the program suggests drinks you could make with what you have (okay, now I’m thirsty).

I can do several things with this product.

1. Put the “Coctelera” program on a CD-ROM and sell it through traditional channels, get paid licenses for it, deal with a big distributor and get filthy rich off the thousands of copies I’ll sell. This is the Microsoft model, closed, proprietary (or “privative”, as some say). I call it the traditional model of selling software.

2. Release the program’s source, coctelera.sourceforge.net, but not the database, which is sold through subscriptions that let you keep it up to date. This model is interesting: open source for the programs, but not for the data. I haven’t seen this model; if anyone knows an example of this kind, I’d like to hear about it.

3. Release the program’s source and the contents of the database (coctelera.gnu.org). In this case there are no barriers to entry, so what’s left for me is to build a services structure around it, providing database maintenance services, for example. If you’re interested in getting filthy rich, this won’t do; stick with option 0. In this case the program is free and so is the data, so everyone can enjoy the drinks, cheers! It’s what the FSF and open source do. Can you make money? Yes, you could make decent money tailoring the program to restaurants and bars and charging them licenses for that commercial version. Or you could package it on a CD-ROM and sell it in supermarkets at a low price.

4. The third way (yes, I cheated by numbering from zero ;).
   Put the system on a website, www.coctelera.com, charge for advertising, and everybody has access to it. They can even get access via WAP, and I sign a contract with the phone companies. In this case whether the code is released or not makes no difference, because my business is in the service I’m providing on top of the program and the database. This is Google’s case.

You get filthy rich all the same, but you have a better image, and you take care to keep that image polished by offering new and innovative services (Coctelera Bar, Coctelera Desktop, Coctelera Appliance, Coctelera Mail, etc.)

And here comes the paradigm shift in the software business that is happening before our eyes.
A shift that Microsoft doesn’t understand, and that they don’t understand much on the other side either.