[Discuss] OSHW & Economics

Javier Serrano Javier.Serrano at cern.ch
Mon Nov 25 10:28:21 UTC 2013


I can see the rationale in what you say, and since you seem to have done
quite some thinking about this, I'd like to ask:

- How do you explain that FOSS companies like Red Hat can become huge? I
guess there are some lessons to be learnt here in terms of capital raising.

- Do you think that publicly funded institutions and projects fall
within or outside the scope of your analysis? And do you think they can
play a significant role in global economics, maybe by seeding the
Free/Open Source machinery?

Thanks,

Javier

On 11/25/2013 03:02 AM, Chris Church wrote:
> Open Source Hardware, or Free Hardware, or Freed Hardware - any name by
> which you want to call it, is no more separate from market and economic
> forces than closed hardware, or any other finite resource.  Its nature
> of sharing schematics, designs, or otherwise does not free it from the
> fact that someone must put labor or capital in to produce every instance
> that is sold to a consumer, variables costs for finite goods may be
> driven down, but never to zero.  That someone may choose to disrupt
> existing players by undercutting current market price, either by
> reducing cost of labor (producing in a cheaper market), reducing
> margins, through subsidizing, or by simply dumping on the market at a
> loss, remains true whether or open or closed. Moving labor to the
> cheapest markets may temporarily increase the availability of a product,
> but it doesn't increase the amount of Tantalum mined in the Congo, nor
> does it reduce the bloodshed involved in doing so, and it certainly
> doesn't cause China to sell more rare-earths on the open market. 
> 
> What I mean to get at here, is that if we think sharing schematics for
> hooking up lots of closed-source blobs will dramatically change how the
> whole world works, we're largely fooling ourselves.  We might change the
> speed at which new products are developed, but the best OSHW companies
> will work with and against the same market forces as closed hardware
> companies - they will play the same game with a slightly different
> strategy for success, like any closed hardware company.  No, I do not
> believe that services are the only answer for the OSHW companies: for
> many of the companies of today, there are few viable, profitable
> services which can offer enough upside to counter the sunk cost and
> capital risk, and the majority of people with large amounts of capital
> to risk want to see a reasonable ROI. Why invest it into an OSHW company
> to make returns lower than inflation? Admittedly, many OSHW projects
> don't require much capital, they can have manufacturing runs in the
> hundreds, with capital outlays of a few thousand USD.  They can, with
> some services and brand-loyalty make a living wage for a handful of
> people - but it doesn't scale to the level required to make the next
> generation of great technology.  The best in breed will have to think
> like the giants of today: they will have to raise and leverage very
> large sums of capital to achieve a scale that will be difficult to
> disrupt, they will have to convince investors that their returns will be
> on-par with or better than their closed-source competitors, and they
> will have to look ahead, take risks, and make markets - not just reduce
> the cost of what is already out there.  In short, they have to operate
> in the world where their schematics are far less valuable than their
> organization, and they can operate at scales that enable them to share
> far more than just schematics.
> 
> 
> 
> On Sun, Nov 24, 2013 at 4:53 PM, Matt Maier <blueback09 at gmail.com
> <mailto:blueback09 at gmail.com>> wrote:
> 
> 
> 
> 
>     On Sun, Nov 24, 2013 at 2:16 PM, Michael Shiloh
>     <michaelshiloh1010 at gmail.com <mailto:michaelshiloh1010 at gmail.com>>
>     wrote:
> 
> 
> 
>         On 11/24/2013 01:07 PM, Matt Maier wrote:
> 
>             On Wed, Nov 20, 2013 at 3:49 PM, Javier Serrano
>             <Javier.Serrano at cern.ch <mailto:Javier.Serrano at cern.ch>>wrote:
> 
>                 On 20.11.2013 21:48, Matt Maier wrote:
> 
>                     If someone is "free" to
>                     do something, but can't afford to, they don't
>                     consider the freedom
> 
>                 relevant.
> 
>                 Let's agree to disagree on that. I do consider the
>                 freedom relevant, and
>                 I am not the only one.
> 
> 
> 
>             I finally found this thing where Richard Stallman talked
>             about "free
>             hardware" specifically. As you can see, his impression of
>             "free as in
>             speech" hardware is that the freedom isn't relevant since
>             it's so hard to
>             exercise the freedom.
> 
>             http://www.linuxtoday.com/__infrastructure/__1999062200505NWLF
>             <http://www.linuxtoday.com/infrastructure/1999062200505NWLF>
> 
>             "*Because copying hardware is so hard, the question of
>             whether we're
> 
>             allowed to do it is not vitally important. I see no social
>             imperative for
>             free hardware designs like the imperative for free software.*"
> 
> 
>         But he wrote that in 1999. The reason that OSHW is an issue now
>         is that the cost and difficulty of copying hardware has
>         plummeted, and will continue to do so.
> 
>         I wonder if Richard Stallman feels his statement above needs to
>         be revised.
> 
>     Me too.
> 
>     This is the only thing I can find that's recent and it implies that
>     his perspective hasn't changed in 10 years.
> 
>     http://www.processmakerblog.com/uncategorized/the-processmaker-developers-meet-with-richard-stallman/
> 
>     "/All in all, the conversation was very interesting for all
>     involved, but Stallman was pressed to keep up with his email, so he
>     pulled out his famous Lemote Yeeloong
>     <http://www.lemote.com/english/yeeloong.html> laptop, a small-screen
>     portable whose entire specs and firmware code are available for free
>     download on the internet.  The appearance of the legendary device
>     provoked a rumination about what this new type of hardware should be
>     termed. Reacting to our use of the term “free hardware”, Stallman
>     observed that it wasn’t really “free” in the same way as software
>     since only companies with access to sophisticated equipment have the
>     ability to create the hardware from the specs. Perhaps in 20 years
>     Stallman mused that the average person would be able to create
>     hardware from the specs, but at the current time it wasn’t in the
>     same category as free software from the point of view of the user.
>     Even thought hardware increasingly is developed as software
>     with Verilog and otherhardware description languages, *Stallman
>     argued that that fact didn’t make much difference for the average
>     user of the hardware*. Therefore, he suggested that we use the term
>     “hardware with published specifications”–certainly a mouthful
>     compared to “free hardware” (or the taboo term “open hardware
>     <http://www.openhardware.net/>//“), but useful for provoking thought
>     about the future of hardware development./"  [emphasis added]
> 
>     Although the Free Software Foundation has certified some hardware as
>     "respecting your freedom." So there's that.
>     http://www.fsf.org/resources/hw/endorsement/respects-your-freedom
> 
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> 
> 
> 
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