It's now a little less than a week until OSCON. I'm going to be there for the entire week, so if you want to get together, leave a comment or drop me a note.

Robert Love points to r0ml's articl on ONLamp:

r0ml has an incredibly interesting article up on O'Reilly's ONLamp, Calculating the True Price of Software, wherein he applies an options pricing model to software cost.

I'll include a larger excerpt than Robert did:

Those who have suggested that open source and free software is somehow not capitalistic, destroying the value of software and other such assertions, have missed this alternative explanation. It is just as likely that the free and open source software folk have stumbled across the financial engineering insight that a significant portion of the value of software is the embedded "derivatives"--options or warrants--on future maintenance and enhancement. Whether one believes that software has intrinsic value is related mostly to one's view on the correct value to use for volatility in calculating the option value. Larger values of volatility mean the software itself is worth less. Smaller values of volatility reduce the option price, and the software is intrinsically worth more.

Therefore, the major difference in worldview between open source advocates and proprietary software license advocates is explainable as a differing opinion on the correct value of the volatility of maintenance and upgrade pricing. People who believe that the pricing on maintenance is stable and unlikely to change see greater intrinsic value in the software. People who fear that the pricing is subject to large fluctuations see no intrinsic value in the up-front license; stripped of the options, the license value approaches $0.

For the open source movement, perhaps a better way to position the change that OSS is making is this: we're converting warrants on future maintenance and enhancements into options, which means that instead of having a sole supplier (warrants), we have created a third-party market (options) of these derivatives.

One of the biggest reasons that I became interested in open source was the "Raiders of the Lost Ark" problem, which is summarized like this. Company develops great software. Software is under-appreciated by the market. Company goes out of business. Future versions of the software are not forthcoming. Imagine the tapes/flopplies/hard drives/CD's/DVD's/whatever being wheeled into a huge warehouse (like at the end of Raiders) and having the doors slammed shut. How much is that great software worth now? Subscription pricing doesn't help, because you still can't guarantee that that the company won't go out of business.

As I've written before, I've no problem paying for software. But I'm not paying for the software that I got. I'm paying to make sure that there's a future for that software. That means supporting the authors/community/organization that developed that software.