NetworkWorld nails it with an article describing how proprietary licensing encourages companies to spend time protecting their past investments, rather than focusing on the future. While the article deals with Microsoft's ongoing legal battles with Novell over WordPerfect (Remember that?), the principle is broadly applicable:
Software vendors and their customers are better served when vendors concentrate on the Next Big Thing rather than protecting their aging (or even dead) technological turf. Let's hope that open source software licensing makes that happen.
How does open source apply? Open source, after all, doesn't change a company's desires to protect its intellectual property. It does, however, significantly change what "protecting intellectual property" means, and it dramatically changes how open-source vendors get paid vis-a-vis their proprietary counterparts.
People forget that software can be a multi-round game. Most software companies get customers locked in and they're stuck. Eighty percent of commercial software functionality is created to drive an upgrade cycle; in other words, to serve vendor needs, not customer needs.
We turned the model on its ear with our subscription model. Red Hat's subscription model provides continuous value to the customer: the day we stop delivering value that customers want, they stop renewing. Dramatically reduced lock-in. We've aligned economic incentives with our customers. We add the features that customers want, not those that artificially create an upgrade cycle. We completely change the value proposition for customers.
Red Hat and other open-source companies, in other words, are focused on the future, because that's what their model requires in order to earn renewals from customers. The proprietary model is more about "build once, charge everywhere...and as long as you can." It's a great model for the vendor, when it works, but it encourages stasis in markets and silly lawsuits designed to horde, not grow customer value.