If anyone could explain the economic virtues of open source to the business and finance leaders of the U.S., writes Chris Preimesberger for eWeek, that person is Jonathan Schwartz, who did exactly that before the audience at the recent Stanford Institute for Economic Policy Research summit. Preimesberger reports that Schwartz used the experience of an African banker to explain why giving away product is the pathway to profit.

The banker, Schwartz told the audience, increased the business of his institution -- which had been suffering from a lack of depositers -- by giving away a free cellphone to everyone who opened a new account.

Many of those account holders were farmers, Schwartz continued, who had been used to accepting the first offer for their crops of the only broker ever to happen along in their villages. The result was the broker bought low and sold high at the marketplace in town.

Armed with their new cellphones, the farmers could now phone around, feel out the market, and get a better price for their crops, leaving them money to deposit in the bank that had given the phones in the first place. Open source...of a sort. "As a result, there's a lot more wealth being redistributed right now in certain parts of Africa, and that's certainly good for the entire economy," Schwartz said.

Preimesberger calls this "...just one story, but it is a microcosm of what open-source software and its worldwide community is all about. Schwartz explained it well — and in terms that other business people could easily understand."

Giving away intellectual property that interacts well with other open source technologies and with such proprietary solutions as Windows and UNIX, enables Sun to then sell its customers the hardware and services that put those open source solutions to work, Preimesberger notes. [...read more...]

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