Typically it is not the software being sold. It is support. Just look at
Red Hat. You can go grab CentOS and it is totally free and virtually
Sometimes you'll see someone selling USB thumb drives with the bootable
distro on it. The service of making the image bootable and the thumb
drive itself are for sale.
Imagine you are the CEO of a large corporation with tens of thousands
of employees. Your CFO is once again sharing the cost this company
pays to license software critical to each of the tens of thousands of
employees. At 50,000 users each requiring a modest $35 in licensing fees
your annual cost reaches $1,750,000.
The cost of licensing is somewhat one-sided. The more you use these
applications the more dependent your company are on this third party
which licenses the software to you. In fact, sometimes you feel like you
are being lead around and somewhat forced to upgrade when you'd rather
not. But what recourse do you have? Your employees have used the software
for years and they know the application well.
You know your business well and you're friends with your competitors. You
go to trade shows and you discuss your issues with those in similar
circumstances as you. Together you feel that perhaps there is a better
what to deal with software you ultimately rely on.
Your tech people do a bit of digging and find that there are open source
alternatives but these applications don't offer all the features your
employees have come to rely on. If you are to adopt this open source
software you're going to need to have a voice on the direction this
software takes such that you have a say in new features and functions.
Knowing that you already spend $1.75 million annually for software
licensing you realize that those same dollars could be spent on developing
the open source application in such a way that the features your staff
requires are added to the software which is open source.
Ideally you'd rather spend less on this development than you
currently spend on licensing. After all, you are giving something
up initially. However, you are also gaining something in the long
run. Eventually you'll have all the features you need and since the
software is open source, you will not need to commit to the same funds
You take this idea to your competitors and together you decide that
all of you have something to gain by participating in developing this
software in a direction in which all of you benefit.
So you create a foundation. The dollars you contribute to the foundation
translates into your voting power. If you contribute 90% of the monies
the foundation collects overall, then you have 90% of the vote on how
those dollars are spent. So if all these founding members wish to have an
equal vote, they will all need to contribute an equal amount. And by doing
that each participant contributes to the cost of developing features and
functions their staff requires. Because you and others have contributed
funds, the funds collected are substantial allowing many developers to
be hired full-time. Within the first year many of the features which
didn't exist now do exist. You're well on your way to replacing the
proprietary software with the open source software you helped develop
through your joint involvement in the open source community.
Because the software is open source, some who are content with the
features as they are and can download and use the software at no cost to
them. The more people that use the software the more of an industry
standard it becomes.
Over the years other companies join the foundation and contribute as
well. They want a vote because they have features they need and feel it
is the smarter way to get what they need without being confined to the
proprietary aspects of Microsoft. Instead of being walled in they would
rather be free.
As the founding members become content with the software they may drop
their funding and their vote while others whom want to add features
increase their own funding and vote to obtain what they want.
This is an example of why and how voting power is tied to
contribution. The direction software takes is a direct result of those
that contribute to its development. Without contributors the software
cannot be maintained. Make no mistake, everyone benefits. The question
is who sets the direction of the development? And the answer; those whom
contribute to its development. It doesn't have to be money. I can also
be a developer who simply develops the app to further his or her own
agenda. Maybe they wish to put their involvement in their resume. Maybe
they simply want to stay sharp and like to code and contribute. They're
not mindless morons. They have their reasons for contributing.