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The needed resources are provided by people and organizations that in some way profit (though not necessary in monetary terms) from free software. The following table summarizes some of the funding sources for open source development and their motivations.
= Economical Efficiency of the Production of Open Source Software = Is open source software efficiently produced? By definition, it is Economically Efficient to invest in the production of a certain good up to the point where benefits exceed its cost. If the costs or the benefits are incorrectly calculated then a non-optimal quantity of the good will be produced. It is relatively straightforward to calculate benefits and costs of commercial software:
In the case of open source software both costs and benefits are much harder to calculate, and so answering the question of economic efficiency is more difficult. Furthermore, for many free software activists such as Richard Stallman , producing free software is not about economical efficiency but about philosophical claims.
Both open source and commercial developers, if they are rational according to the economics definition, will fund the development of a product only up to the point where their income is greater than their costs. As previously mentioned, however, many developers of free software contribute due to philosophical reasons, so they may continue contributing well beyond the point of income matching, or even if they never receive income from their contributions. According to traditional economics, the income generated by a product acts as a feedback signal that tells the producer how useful its product is and therefore how many resources should be invested in it. Again, this is an area when free or open-source software introduces different metrics: for example, a product's market share may be a more meaningful indications of its usefulness than its income. The Apache Web Server , for instance, is used by more than 70% of the Internet's sites, but the vast majority of users do not pay for the product, and therefore income from the product is not an accurate measure of its usefulness. From a purely economic perspective, then, one difference between commercial and open source software developers is that commercial producer can get an income by selling the product while for most open source developers the only income is the benefits that they directly derive from using the product itself. Accordingly, the feedback that an open source developer gets on the benefits of its product is therefore weaker than for a commercial developer. At the aggregate or societal level, therefore, the benefits of open source software are systematically underestimated. The consequence is that a less-than-optimal quantity of open source is actually produced, to the detriment of society. SPECIALIZED MARKETS There have been some attempts at making the funding, and therefore the production, of open source development more efficient by organizing specialized markets. This idea has not yet met with success. Markets for Open Source Software is an index of some (failed) attempts. SourceForge 's recently introduced donation system can also be seen as an attempt of building such a market. PRIVATE ORGANISATIONS PROVIDING FUNDING FOR OPEN SOURCE DEVELOPMENT Omidyar Net SEE ALSO REFERENCES
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