The old school types constantly complain that FLOSS and */Linux cannot possibly succeed because there’s no profit to be made selling software licences. That argument is irrational because it assumes selling licence is the only way to make money from software.
I have made part of my living just using FLOSS. That’s huge. There are lots of businesses making money other ways:
- selling support for FREE software like RedHat,
- selling hardware that uses FLOSS, like most OEMs lots of specialists, and
- selling some other good or service with FLOSS in the mix somewhere.
The latter is what Amazon does, selling Kindle “e-book readers” (and flash-lights now), including FLOSS in order to facilitate the rest of its business selling paper book, e-books and everything else. If you as a consumer have a personal computer with some defaults pointing to Amazon that you bought at a reasonable price, wouldn’t you? Of course some might not but many do. Enough to provide the return on investment separate from the price of the software licence ($0) and the device (at cost).
“We sell the hardware at our cost, so it is break-even on the hardware”
The Kindle made up about 22% of unit sales of tablets in USA. Amazon is selling a lot of books both paper and electronically. So many that Walmart and Target have stopped selling Kindles because they are too strong a competition for their trade in books.
Call it advertising or “cost of selling” but the return must be good enough that Amazon continues. In the meantime you and I get a great price for a useful gadget and other hardware/software makers have some pretty stiff competition. Wake up OEMs and retailers. If you won’t supply the products the world needs someone else will. Selling high-priced Wintel stuff cannot compete against rock-bottom prices of devices like the Kindle. The market understands this for smart thingies of all kinds. This year the market will understand that Wintel cannot compete on price/performance also. There have been three quarters of disappointing sales of Wintel. Someone would have to be pretty thick not to get the message.