why put money into R&D when your
competitor can just take your product and sell it cheaper
This line of reasoning rests on a fundamental assumption: that of software as product. That's the business model that Bill Gates built Microsoft upon, so it's no wonder they're scared of open source software. But why does software have to come from a company that just writes software, boxes it, shrink-wraps it, and puts it on a shelf as a product in and of itself? Why, indeed?
Open source software makes sense outside of the software-as-product framework, in companies that don't make their money from software. The best description I can give of the way software can work is through the example of Apache. It began when a number of Web server administrators across the Internet patched up the NCSA httpd to create "a patch-y server." (Nyuk nyuk!) They gave away their work, because they were in the business of providing Web service, not selling Web server software. Each one contributed just a little bit, but all the little bits put together made a pretty good server. Apache continues to grow to this day. People or companies add the features they need, and everybody benefits from each addition. In this way, everybody gets back far more than they put in, and nobody loses.
This model could work for all sorts of software. People and businesses the world oven often need the same sorts of software. If each user of an open-source project contributes back the features he/she/it needed to add, that project becomes very powerful. This could even work for the humble word processor, as I have yet to meet a business that doesn't need one. Furthermore, this model answers the question of how programmers can make money in an open-source world: by contracting their services to businesses or people who need specific features added to an open-source project, or a new project started.
No, it doesn't make much sense for a software company to put R&D money into developing open-source software, because with open-source software, a software company doesn't make much sense.
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