Matt Asay has written another entertaining blog piece on his particular theories of open source economics, and Red Hat’s Michael Tiemann and he have engaged in what is superficially a bit of “Is not!” “Is too!“. Looking a bit deeper, though, it’s not really the pragmatics vs. the Stallmanites, even though that’s how Asay frames it.

Fundamentally, Tiemann is right on the money: a simplistic “supply and demand” view of how prices are set in a market place completely ignores the value that Red Hat offers to its customers. “Subscription” versus “box price” is not simply a semantic difference – indeed, that’s essentially labelling their customers as brand tarts unwilling to risk CentOS / Scientific Linux, and reduces the business decision to a simple money figure. That’s not how business works; the difference between “cheapest” and “best value” is huge.

Asay also bizarrely labels Red Hat a “distant second to Canonical” in the purity stakes. This is Canonical with the proprietary server management, proprietary file sharing, proprietary application store, etc.? I don’t even vaguely understand the argument here: either Matt is badly misinformed, or is just being very selective – the only thing I can think that Red Hat withholds is permission for others to use its trade marks. Which Canonical also does.

Then comes the claim that “The bulk of the best, most widely used open source is funded by proprietary dollars.” – followed by a call of thanks for the likes of IBM, HP, Intel. No doubt those companies do contribute a reasonable amount, but to credit them with the bulk of the best: that’s really stretching it. If you look at the actual factual information of who contributes what to projects like Linux, corporate interest is large, but “funded by proprietary dollars” – haha. What Asay is basically implying is “proprietary sales are underwriting the development of open source” – presumably some kind of mass corporate hallucination that has turned these businesses into charities, and pragmatism be damned.

Of course, the reality is these businesses would never underwrite development of software which wouldn’t make the money back, and indeed IBM’s vaunted “$1 billion investment” was apparently recouped in a single year. According to Matt, we should be thanking IBM for doing this: to my mind, IBM should be thanking the community for the contribution that has enabled it to recoup its investment so quickly (since 2002 presumably it has been making good money, too).

What Matt doesn’t seem to get is that this split-personality marketing of “we do all this open stuff, except for this scarce bit we’re charging you for!” is a prize example of a house divided unto itself. You can’t sensibly talk about the benefits of open source without contradicting yourself completely when it comes to the paywall behind which your proprietary software sits: basically you have to fess up that the open source bits are the bait.

What Michael’s post illustrates nicely is not just a clarity of purpose, but a 100% commitment to what they tell their customers: no ifs, no buts, but a single compelling story. Customers understand the value they offer, and that’s why they make money.

[Edit 20:24: just for clarity, my comparison of Canonical to Red Hat is not to denigrate Canonical: merely to illustrate that claiming Red Hat are a ‘distant second’ to Canonical in the purity stakes is utter nonsense. Also, my reference in the comments to “proprietary application store” should be parsed as “a store that hosts proprietary applications”, not “an application store that is proprietary”]