Does software licensing equate to theft?

Published on the 19/01/2017 | Written by Donovan Jackson

Software licensing

Software vendors perpetuating a billion-dollar heist (or are they?)…

Economics, the so-called ‘dismal science’, is essentially about just two things: scarcity and choice. But is software, which can be made once and then sold or given away an unlimited number of times, scarce? In a lengthy article published on LinkedIn with the provocative title of ‘All software licensing is theft’, Westpac engineering manager Gary Elmes argues that not only is software not in any way scarce, but that licensing it is the equivalent of ‘stealing from us all’. The very fabric of society is, if not being ripped, then at the very least getting a serious wedgie.

That thievery, writes Elmes, is down to the artificial restrictions which software licensing imposes on its use, driving up cost enormously, while also limiting the value it can add (and which can be added to it).

Instead, he posits that free open source software (FOSS) holds the keys to greater prosperity for all.

In between various trips down memory lane, Elmes’ engaging piece covers aspects of economic theory, property rights, the notion, historical roots and evolution of copyright, the creation and genesis of the software industry, and the emergence of open source software as a viable alternative to the stuff the companies want to sell to us (and tell us how we can, and can not, use it).

The meaty bit relating to how software licensing is theft (and what is stolen from whom) is paraphrased here: ‘You are not free to use licensed software as you wish. If you want to install it on a second or third machine at home, you’ll need to buy it again. You’re not allowed to study how it works, including for the purposes of formal comparisons. And you most certainly aren’t free to redistribute copies and nor are you allowed to improve it’.

Apparently, even though you willingly signed up for it, you’re being done over.

Serious destruction
Elmes describes the prohibition on studying and improving proprietary software as ‘a seriously destructive force’, because, in the proprietary software world, making better products depends on reinventing multiple wheels, rather than reusing existing components. That drives up cost and the time taken for innovation. And then Elmes points to the raw cost of proprietary licensed software, describing it as ‘sheer dead-weight’ which adds up to above US$400 billion per annum, extracted from businesses and governments alone. There is also the cost of compliance to factor in.

By contrast, Elmes points out four ways how FOSS is free:

  • You are free to use it for any purpose.
  • You are free to study how it works, and change it to make it do what you want.
  • You are free to make and redistribute copies, so that more people can get the benefit of it.
  • You are free to try to improve it, and release your improvements (and modified versions in general) to the public, so that the whole community benefits.

Good points to be sure, and Elmes’ is at the very least, an interesting take which forcefully makes the case for FOSS.

However, it also tends to see the (software) world in black and white rather than the various shades of grey which combine to create a working whole.

Microsoft, for example, the great Beast of Redmond which is built upon sturdy foundations of proprietary software, has itself acknowledged and, dare we say it, embraced open source software as an essential component within a larger machine. IBM, which also gains a less than favourable mention in Elmes’ piece, has long held Linux in its tight, blue embrace.

Property rights (including those of an author)
In any event, we approached Elmes with a request to edit down and publish a version of his 7800-word treatise. While he said ‘OK but I need to approve the revision’, ultimately, he didn’t care for the edit. We left it there.

This is salient to today’s tale because had we approached Elmes’ article as he suggests creators of software should approach licensing, there may have been no need to ask permission for editing and reusing his work in the first instance.

But iStart is a bit of a fence-sitter where property rights are concerned. When someone creates something, be it software or a collection of written words, we like to think it is the creator’s prerogative to exercise some control over their work as they see fit (after all, we spend a fair amount of time stringing sentences together ourselves). We also think that when suitably enlightened parties enter into agreements, they really aren’t being robbed. As far as we are aware, nobody is actively coerced into signing up for these agreements (although that is a potentially moot point).

Here’s the fence-sittery bit. We’re OK with software licensing and we’re also OK with FOSS (but by no means rabid in either direction). Like anyone else, we prefer free stuff, but, for example, when it comes to productivity software, we happily pay the Beast for Office 365. Sure, we could get OpenOffice or use Google’s stuff, but we see the value in good old Office so we pay for it. If Microsoft and Oracle and SAP want to make software and charge heaps for it, all power to them, particularly if the market is OK with signing up to those agreements. Not for us or even society/their clients to dictate the business models.

What we do like about FOSS is that it provides alternatives and plenty of them. This is the ‘choice’ bit which economists (and the market) generally tend to like.

It is quite possible today to put together a complete enterprise technology stack using little else, as Elmes himself notes in his piece: ‘There are many…groups and companies developing free software – the Document Foundation, MariaDB Corporation, the PostgreSQL Global Development Group, the GIMP Development Team, the Open Source Software Institute, the Adempiere Community, the Mozilla Foundation, the OpenVPN project, the GNOME Project; hundreds of teams of varying shapes, sizes, and motivations.’

Despite this thriving free software industry, the proprietary boys appear to be doing just fine, by and large. In a relatively free and competitive environment, their customers still choose to spend their money as they please – and a good deal of that cash apparently willingly goes to software licensing.

Questions or comments...

  1. Robin Vessey

    Sure, open source is good and for those who can afford to spend their days writing it.
    But for the majority of software developers (along with every other working person), they like to get paid.

    More importantly for businesses, the results developers produce can be insanely valuable.
    It can free businesses of their primary constraints, enable or support economies of scale never seen before, create entire new industries or replace less efficient, higher cost or broken industries.

    Companies need to pay people, who understand not just computers but also the business environment around them.
    It is these rare people who can interpret the human and business worlds in a way that computers can operate.
    This resource is not a normal programmer and it is a scarcity, especially given the emerging potential of automating everything across every industry.

    Nobody is going to pay millions to have holes dug if there is no gold, and they aren’t going to pay for highly skilled teams to automate our lives and then continue to improve on that work without a return.

    The majority of all software projects still fail these days. Who is going to take that sort of risk if there isn’t going to be a carrot at the other end?

    Open source is great, it helps our industry move forward but its not the only piece of the puzzle.
    All of the example open source companies are “software for technical people”.
    This is because they are solving their own problems, not yours.

    The rest of the world “software for *your* industry” isn’t going to be open source because your industry can’t solve their own problems. You have to employ techies and focus them on solving your problems, you have to accept the risk (and you will want to take the rewards as well).


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