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The Magic Cauldron

by Eric S. Raymond

June 1999

This paper analyzes the evolving economic substrate of the open-source phenomenon. We first explode some prevalent myths about the funding of program development and the price structure of software. We present a game-theory analysis of the stability of open-source cooperation. We present nine models for sustainable funding of open-source development; two non-profit, seven for-profit. We continue to develop a qualitative theory of when it is economically rational to be closed. We then examine some novel additional mechanisms the market is now inventing to fund for-profit open-source development, including the reinvention of the patronage system and task markets. We conclude with some tentative predictions of the future.

1. Indistinguishable From Magic

2. Beyond Geeks Bearing Gifts

3. The Manufacturing Delusion

4. The ``information wants to be free'' Myth

5. The Inverse Commons

6. Reasons for Closing Source

7. Use-Value Funding Models

8. Why Sale Value is Problematic

9. Indirect Sale-Value Models

10. When To Be Open, When To Be Closed

11. The Business Ecology of Open Source

12. Coping With Success

13. Open R&D and the Reinvention of Patronage

14. Getting There From Here

15. Conclusion: Life After The Revolution

16. Bibliography and Acknowledgements

17. Appendix: Why Closing Drivers Loses A Vendor Money

18. History

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