Thursday, November 13, 2008

Proprietary software and "Lipstick on a pig"

Mark Taylor of Sirius Corporation has written a very interesting article that explains in economic terms why proprietary software is doomed.

Is proprietary software simply a pig skilfully dressed up to make the unwitting think it has intrinsic value?

The answer is 'yes', and here's why.

In any free market, the price of a commodity, over time, falls close to that of its marginal cost of production. A number of things can interfere with this process, the most damaging being the existence of a monopoly, but in the absence of market distortion this rule always holds true.