The Magic Cauldron

• Difference between use-value, and sales-value of software:
  • Most software has zero sales-value, as it is customized for some specific use.
  • Maintenance accounts for about 75% of the cost of a piece of software.
• Economic models:
  • Use-value funding models
    • Cost-Sharing (Apache)
    • Risk-Spreading (Cisco)
  • Indirect sale-value models
    • Loss-Leader/Market Positioner
    • Widget Frosting
    • Give Away the Recipe, Open a Restaurant
    • Accessorizing
    • Free the Future, Sell the Present
    • Free the Software, Sell the Brand
    • Free the Software, Sell the Content
• Towards a Free infrastructure, and new niches constantly opening up at the upper (application) end.