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Torvalds: Software subscriptions doomed

Linus Torvalds tells CNET News.com that software subscriptions from Microsoft and others are a "horrible" idea that is doomed.

Tech Industry
Microsoft and a host of other software companies are trying to convince customers to buy software through subscription-like contracts. And the vast majority of them will fail, Linux creator Linus Torvalds said in an interview with CNET News.com.
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 Torvalds: The shy renegade
Linus Torvalds, father of Linux

"Everyone wants to go into this 'Let's not sell software. Let's license it,' but that's horrible," Torvalds said. "It is the most stupid thing because nobody wants it."

The subscription debate will likely emerge as one of the major flash points in the software industry. Although the exact terms vary, in most of these programs customers sign multiyear contracts that commit them to pay for new software on an ongoing basis.

Microsoft put an exclamation point on the movement Thursday when it announced a software assurance program, a licensing option under which corporate customers agree to purchase a steady stream of upgrades. The Redmond, Wash.-based giant also unveiled a subscription service in which customers rent software on an annual basis but don't get to keep it at the end of the contract.

These strategies are doomed to failure for a number of reasons, Torvalds said. Companies want to charge too much, and consumers don't need to upgrade their software as fast as they used to. Besides, human nature also abhors a rental.

"There's one and only one reason (subscriptions) is the perfect kind of business to be in," he said. "It is an infinite revenue stream."

"I don't think (subscriptions) will go away, but they will be much more rare, and you can't gouge people."

Although Microsoft charges more than many other companies, the software giant is likely one of the few that could succeed because of its large market share.

Torvalds, however, was quick to say he's not a Microsoft basher. Companies need to be able to make money selling their products, he said. Microsoft just happens to be more open about its plans.

"Most of the technology companies are like this. The only outspoken one is Microsoft," he said.

"I'm one of the few people in technology that doesn't hate Bill Gates," Torvalds added later. "I think it is strange how much people don't like Bill Gates."

A more tepid future
The expected failure of the subscription plans will indirectly usher in another cold reality for the technology industry: The future is not going to be nearly as much fun as the recent past.

The high-tech industry has graduated from a decade of wealth and growth that likely won't be repeated, Torvalds said. The technological sophistication of existing products has sapped the motive of many customers to get the latest and greatest as soon as it emerges. Upgrades will still occur, but at a less frenzied pace.

"There is less incentive to upgrade," he said. "The last 10 years...are not sustainable."

The increasing proliferation of open-source programming will also likely alter the value of patents. Currently, large companies wield patents like nuclear missiles, threatening to hit competitors with patent infringement suits to force them into deals. Established companies also browbeat start-ups. In the end, customers pay more for software because alternatives are limited.

The open-source system, though, creates a safe haven of alternative products. "Nukes don't go away, but at some point you get away from them," Torvalds said.

Microsoft, he pointed out, takes a completely different viewpoint, publicly portraying openly licensed intellectual property as dangerous and a threat to the industry.

"I think the whole Microsoft approach is complete crap," he said. "If you try to logically follow their arguments, you get completely lost."

I'm just a man
Finland's leading celebrity also pointed out that he's not the raving radical some people might wrongly assume him to be. He started writing open-source code because it was fun, not as part of a grand philosophy.

"To me, the most interesting thing about open source is not ideology," he said. "I'm more of a focal point for a lot of ideas."

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